Lowering Your Machine Shop Insurance Cost Without Cutting Coverage
- Nate Jones, CPCU, ARM, CLCS, AU
- 1 day ago
- 2 min read
The insurance cost for a machine shop can be a major line item, especially for operations with CNC machining, laser cutting, welding, and metal fabrication. The good news: you can reduce premiums without stripping essential protection. By tightening risk controls and aligning your policy structure with how you operate, you can keep comprehensive machine shop business insurance while improving price.
Below are proven strategies to help you save smart.
1) Strengthen Safety Programs and Documentation
Carriers reward shops with robust safety culture. Highlight:
LOTO (lockout/tagout) procedures
Machine guarding and interlocks
Hot work permits for welding and cutting
PPE policies and training records
Material handling and lifting protocols
Quality control and inspection checklists
Well‑documented programs reduce workplace injuries and product liability risk, which can help lower your machine shop business insurance quote.
2) Improve Property and Equipment Risk Controls
Property losses (fires, electrical surges, mechanical breakdowns) drive premium. Consider:
Updated fire suppression and clearly marked extinguishers
Hot work areas with fire‑watch procedures
Electrical maintenance and surge protection for CNC/laser systems
Housekeeping: dust control, clear egress, labeled flammables
Preventive maintenance logs for critical machines
These controls can reduce property and equipment claims, improving rating over time.
3) Right‑Size Limits and Values, Don’t Over/Under insure
Overstating equipment or building values inflates premium; understating creates dangerous gaps. Provide:
Current replacement cost values for CNCs, lasers, welders, press brakes
Accurate business income limits and realistic period of restoration
True max on‑hand for raw materials, tooling, and customer property
If you transport tools or parts, ensure inland marine limits reflect off‑site exposure.
4) Use Deductibles Strategically (Without Reducing Coverage)
Raising deductibles modestly on property, inland marine, or equipment breakdown can lower premium while keeping limits intact. Choose deductibles aligned with cash flow so a single claim doesn’t disrupt operations.
5) Segment Operations for Better Pricing
When possible, break out low‑hazard vs. high‑hazard work (e.g., light CNC finishing vs. heavy welding/heat‑treat). Clear job descriptions and payroll splits can improve workers’ comp and liability pricing.
6) Work With a Specialist Who Shops Multiple Carriers
Machine shops aren’t “generic” manufacturers. A specialist understands:
Product liability for critical‑use parts
Customer property in your care, custody, control
Equipment breakdown nuances
Contractual/COI requirements for OEMs and primes
Wexford Insurance works with national carriers that specialise in machining and fabrication, helping you compare quotes, fine‑tune deductibles, and capture safety credits.
Get the Best Price, Without Sacrificing Protection
Not all insurers understand machining and fabrication risks, and pricing varies by safety programs, equipment values, operations mix, and claims history. Wexford Insurance partners with top‑rated carriers that specialise in machine shop coverage, helping owners secure the right limits, deductibles, and policy forms at competitive pricing.
👉 Request your Machine Shop business insurance quote from Wexford Insurance today and ensure your tools, equipment, and operations are fully protected.
