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Commercial Insurance Considerations for Machine Shops

Thursday, October 1st, 2020

Do you own a machine shop in the Fargo-Moorhead area? As you know, you have special insurance needs, and today we’re going to share some important commercial insurance considerations to keep in mind. 

What is a machine shop?

A machine shop is the location or business where machinists use machine tools and cutting tools to make parts out of metal or plastic for a number of purposes. 

A number of industries utilize machine shops, including oil and gas, agriculture, automotive, and aircraft. In some cases, machine shops are small entities, and other times, they’re large divisions within factories or companies. 

Machine shops can provide a number of important services, including:

  • Pattern manufacturing
  • Sheet metal work
  • Tool manufacturing
  • Live tooling
  • CNC turning and milling

Insurance risks at machine shops

There are a number of risks machine shop owners or employees may face on the job.

Here are just a few:

  • Equipment breakdowns
  • Third-party injuries
  • Employee injuries
  • Business interruption
  • Structural damage to the shop property

Choosing the best commercial insurance for machine shops

Depending on the specific services your machine shop provides, there are a number of commercial insurance options that might be right for you.

For example, it’s worth looking into tool and equipment insurance. Although some coverage for tools and equipment could be included in your business property insurance, it usually excludes equipment breakdowns or internal malfunctions.

In the event your tools or machinery need repairs or they’re out of service for an extended period of time, specialized equipment coverage will be a game-changer. 

Another type of commercial insurance machine shops should consider is product liability coverage. If a client claims your machine shop was negligent in the manufacturing of a particular product or did not meet their expectations, they could involve you in a lawsuit. With product liability insurance, it could help you cover the associated legal fees. 

Other useful types of commercial insurance could include workers compensation insurance, commercial vehicle insurance, commercial general liability (CGL), and property insurance. 
Would you like to talk more about the commercial insurance options for your machine shop? Call us today so we can help!