INSURANCE GUIDE Engineering Insurance UK - plant, machinery, and inspection cover |
TL;DR
- Engineering insurance (also called plant and machinery insurance) covers industrial plant, production machinery, and pressure systems against breakdown, explosion, and accidental damage.
- Statutory inspection of certain plant is legally required under the Pressure Systems Safety Regulations 2000, LOLER 1998, and PUWER 1998 - engineering insurers provide these inspections as part of the policy.
- Engineering insurance is most relevant for manufacturers, food processors, printers, construction firms, and other businesses with significant plant and machinery.
- Machinery breakdown is not covered by standard commercial property insurance which covers fire, flood, and theft but excludes mechanical or electrical breakdown.
- Annual premiums are typically 0.1% to 0.4% of the insured plant value depending on the type and age of machinery.
Last reviewed: June 2026
KEY FACTS | |
| What it covers | Breakdown, explosion, and accidental damage to plant and machinery; loss of business income following plant failure |
| Statutory inspection | Pressure systems (PSSR 2000), lifting equipment (LOLER 1998), and work equipment (PUWER 1998) must be inspected by a competent person - engineering insurers provide this |
| What property covers exclude | Standard commercial property insurance covers fire, flood, theft but excludes mechanical and electrical breakdown - engineering insurance fills this gap |
| Engineering BI | Loss of gross profit while plant is out of action following breakdown - available as extension to standard engineering cover |
| Who needs it | Manufacturers, food processors, commercial kitchens, printers, HVAC businesses, construction companies, hospitals |
| Annual premium range | 0.1% to 0.4% of insured plant value per year |
What Is Engineering Insurance?
Engineering insurance, also called plant and machinery insurance or boiler and machinery insurance, provides cover for industrial plant, production machinery, pressure vessels, and other engineering equipment against the risks of mechanical breakdown, explosion, electrical failure, and accidental damage. It fills a critical gap in standard commercial property insurance, which covers external perils (fire, flood, theft) but explicitly excludes the cost of repairing or replacing plant that fails due to internal mechanical or electrical causes.
Engineering insurance also has a unique statutory inspection dimension. UK health and safety legislation requires that certain types of plant - pressure systems, lifting equipment, and work equipment with specific hazards - must be examined and tested at prescribed intervals by a competent person. Engineering insurers provide these statutory inspections as part of their engineering inspection service, and the written schemes of examination required under the legislation are maintained by the insurer inspection team.
KEY FACTS
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What Engineering Insurance Covers
Plant breakdown: The cost of repairing or replacing plant and machinery that suffers a sudden mechanical or electrical breakdown, including internal component failure, short circuits, and operator error damage.
Pressure vessel explosion: Damage caused by the explosion or collapse of boilers, pressure vessels, steam pipes, and other pressurised plant. This is one of the most significant risks in food processing, paper, and industrial manufacturing and can cause catastrophic damage.
Business interruption (engineering BI): Loss of gross profit while production is halted following plant breakdown or explosion. For manufacturers where a single machine failure can stop an entire production line, engineering BI can be as important as the plant damage cover itself.
Deterioration of stock: Loss of perishable stock or production materials caused by breakdown of refrigeration or temperature control plant. Critical for food manufacturers and processors.
Statutory Inspection
The statutory inspection component of engineering insurance is an important practical benefit. Under PSSR 2000, an employer operating a pressure system must have a written scheme of examination prepared by a competent person and must have the plant examined at intervals specified in the scheme. Engineering insurers provide competent persons who prepare the written scheme and conduct the examinations. Similarly, LOLER requires thorough examination of lifting equipment - most engineering insurers can provide the examination service for cranes, hoists, forklift trucks, and passenger lifts as part of the engineering inspection contract.
How Much Does Engineering Insurance Cost?
Annual premiums are typically calculated as a rate on the reinstatement value of the insured plant. Indicative 2026 rates:
- Light manufacturing plant, good maintenance regime: 0.10% to 0.20% per year
- Heavy industrial plant, older equipment: 0.20% to 0.40% per year
- High-risk plant (pressure vessels, specialist machinery): rates at the higher end
Related Guides |
Disclaimer: This guide is for general information only. Kael Tripton Ltd is not authorised or regulated by the FCA. Always verify details with an FCA-authorised insurer or broker before purchasing. |
Frequently Asked Questions
Does my commercial property insurance cover machinery breakdown?
No. Standard commercial property insurance covers fire, flood, storm, theft, and similar external perils. It explicitly excludes mechanical and electrical breakdown of plant and machinery. Engineering insurance fills this gap by covering the cost of repairing or replacing plant that fails due to internal causes.
What is a written scheme of examination under PSSR 2000?
A written scheme of examination is a document prepared by a competent person that specifies the nature of the examination to be carried out on a pressure system, the parts to be examined, the methods of examination, and the frequency of examination. It is a legal requirement under the Pressure Systems Safety Regulations 2000 for pressure systems above specified thresholds. Engineering insurers employ competent persons who prepare and maintain written schemes for client pressure systems as part of the engineering inspection service.
Does engineering insurance cover the cost of hiring replacement machinery?
Some engineering policies include a machinery hire extension that covers the cost of hiring a replacement machine while the insured machine is under repair following breakdown. This is particularly valuable for businesses with single-point-of-failure machinery where a breakdown stops production entirely. Check the policy schedule for this extension.
Is engineering insurance the same as machinery all risks?
Machinery all risks (MAR) is a broader cover that includes accidental damage from external causes (impact, collision, fire) as well as breakdown. Standard engineering insurance covers breakdown and explosion. MAR provides more comprehensive cover for mobile plant and equipment that is at risk of external damage as well as internal failure. Both are engineering insurance products but have different coverage scope.
Who carries out statutory inspections if I do not have engineering insurance?
Statutory inspections under PSSR, LOLER, and PUWER can be carried out by any competent person, not only insurance engineers. Independent inspection companies and specialist consultancies provide these services outside the engineering insurance framework. However, the engineering insurance route is generally the most cost-effective as the inspection service is included within the insurance premium.
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