Precision Parts, Costly Tooling, and Failures That Travel Downstream.
Protecting tool and die makers and CNC machining shops
Tool and die makers and precision-machining and CNC shops produce tooling, molds, dies, and precision parts to tight tolerances — and their defining exposure is products and completed operations on that work. A defective part, die, or mold used in a customer's production can cause a downstream product failure or a costly production loss far larger than the piece itself, and the shop also runs high-value machinery and holds customer-owned tooling and molds under its roof. A machining business needs coverage built around completed operations, heavy machinery, and property of others. This is a specialized corner of manufacturing insurance built for how precision shops actually get sued.
Properly structured coverage protects the shop, its equipment, and the parts and tooling it builds for others.
The Precision Machinist's Signature Exposures
Completed operations on precision work is the first defining exposure — a part, die, or mold that is out of tolerance or fails in a customer's process can halt a production line, scrap a run, or feed a downstream product failure, and the resulting business-interruption and consequential-loss claims from the customer dwarf the value of the piece itself, with aerospace, medical, and automotive end uses carrying the highest weight. The second is the convergence of heavy machinery and property of others: CNC machining centers, EDM, and presses drive amputation and crush injuries and represent high equipment and tooling values, while the customer-owned molds, dies, and raw stock sitting in the shop create a bailee exposure that a standard property policy does not reach.
Key Risks in Tool & Die / Precision Machining
Tool and die makers and precision-machining shops face exposure related to:
A defective precision part, die, or mold causing downstream product failure or production loss
Amputation and crush injuries from CNC, EDM, and presses
High-value CNC equipment and tooling exposed to property loss and breakdown
Customer-owned materials, molds, and tooling held in the shop (bailee)
Fire from cutting oils, metal dust, and coolant
Coolant and fluid pollution releases
Export-control exposure on defense- or aerospace-bound parts
The downstream completed-operations failure and the bailee exposure on customer tooling are what most define the shop.
Core Coverages for Tool & Die / Precision Machining
A properly built machining program typically includes:
Products Liability & Completed Operations — Covers claims that a defective part, die, or mold caused downstream product failure or production loss — often the most consequential and most under-limited line.
General Liability — Covers premises and ongoing operations exposure.
Commercial Property & Equipment — Covers the building, high-value CNC and EDM equipment, and tooling against covered loss.
Equipment Breakdown — Covers sudden mechanical or electrical failure of CNC, EDM, and precision machinery.
Bailee / Property of Others — Covers customer-owned molds, dies, tooling, and materials while in the shop's care, custody, and control.
Workers' Compensation — Provides legally required coverage for machinery injuries — usually the largest line.
Pollution Liability — Addresses coolant, cutting-fluid, and solvent releases.
Commercial Auto & Inland Marine — Cover vehicles and the transit of tooling and finished parts.
Umbrella / Excess Liability — Adds higher limits above the primary program given downstream-failure severity.
What's Commonly Overlooked
Precision-machining programs are most often weakened by:
Completed-operations limits too low for parts bound for aerospace, medical, or automotive use
No bailee coverage for customer-owned molds, dies, and tooling in the shop
Equipment and tooling values that understate real replacement cost
No pollution coverage for coolant and cutting-fluid releases
No recognition that end use, not shop size, drives product severity
The gap that hurts most is a completed-operations limit and bailee coverage too thin for the customer property and downstream loss the shop actually handles.
Real-World Claim Examples
An out-of-tolerance die scraps a customer's production run and triggers a consequential-loss claim
A defective precision part feeds a downstream product failure in the customer's finished goods
A CNC or press amputation occurs during a setup without lockout
A fire caused by cutting oils and metal dust spreads to customer-owned tooling in the shop
A coolant or solvent release reaches soil or drains
Any one of these can be severe, and the downstream production-loss claim can far exceed the value of the part.
Regulatory & Safety Context
OSHA governs the shop floor through machine-guarding, mechanical-power-press, and lockout/tagout rules along with hazard communication and metalworking-fluid exposure guidance. Shops serving the automotive supply chain work to ISO 9001 and IATF 16949 quality systems, and a quality-system or conformity failure can itself drive a completed-operations claim. EPA and local rules govern coolant, cutting-fluid, and solvent handling and disposal, and export controls apply where parts are bound for defense or aerospace programs. Carriers weigh guarding discipline and fluid handling when judging the account.
Why Proper Placement Matters
Most tool and die and precision-machining accounts are placeable in the standard market, but the end use of the parts drives everything — tooling and parts bound for aerospace, medical, and automotive applications raise product severity sharply and can push an account toward excess and surplus lines (E&S), while general industrial work sits comfortably in standard markets. Underwriters weigh equipment and tooling values, the bailee exposure for customer property, guarding and lockout discipline, coolant handling, and loss history. Presenting the true end use and the customer-property exposure accurately, and sizing completed-operations and bailee limits to them, is what keeps the coverage sound.
Our Approach
At Cory Washington & Co., we insure tool and die makers and precision-machining shops around completed operations, heavy machinery, and the customer property in their care. We size products and completed-operations limits to the real end use of your parts, add bailee coverage for customer-owned tooling, and coordinate property, equipment breakdown, pollution, and workers' compensation around the shop floor. We also insure related operations, including machine shops, metal fabrication, and the broader manufacturing category, and coordinate product liability and equipment breakdown.
A die you cut today runs in someone else's line tomorrow — we build coverage that follows the failure downstream.
All insurance descriptions on this website are provided by Cory Washington & Co. LLC strictly for general informational purposes. They are not intended to be, and should not be relied upon as, legal, financial, or insurance advice. The information presented is general in nature and does not guarantee the availability, terms, conditions, or scope of any insurance coverage. Actual coverage is determined solely by the specific policy language issued by the insurer and remains subject to underwriting approval. Nothing on this website creates or implies an agent-client relationship, binds coverage, or alters any existing policy. Cory Washington & Co. LLC expressly disclaims any liability for actions taken, or not taken, based on the content provided here. For advice regarding your particular situation, please consult directly with a licensed insurance professional at Cory Washington & Co. LLC or another qualified insurance professional, and always review your policy documents in full.
See the coverages a tool & die and precision machining business may carry — core, prevalent, and situational — plus the gap most often missed, in the Tool & Die and Precision Machining Coverage Checklist.
Complete the Tool & Die and Precision Machining Supplemental online in a few guided steps, download the fillable PDF, or browse all applications.
Frequently Asked Questions
How do I get tool & die / precision machining insurance through Cory Washington & Co.?
Request a quote or contact our team. We start with a short conversation about your operations, analyze your exposures, then negotiate tool & die / precision machining insurance across multiple carriers that compete for your account and present options with the trade-offs explained. Cory Washington & Co. LLC is licensed in all 50 states.
How are tool & die / precision machining insurance premiums priced?
Premiums vary from business to business. The main drivers of tool & die / precision machining insurance pricing are the nature of your operations, your revenue and payroll, your loss history, and the limits you carry. Rather than quote a flat figure, we negotiate across several markets and walk you through the options, so you only pay for the protection you actually need.
Is tool & die / precision machining insurance mandatory?
Requirements vary. Tool & die / precision machining insurance may be mandated by statute, or required under your contracts, leases, or loan agreements — and in many cases it is simply prudent given the risks involved. We look at your specific obligations and exposures, then recommend the coverage and limits that fit.
What if another agency has already declined or non-renewed my coverage?
Difficult, specialty, and previously-declined placements are a core part of our work. We access excess & surplus (E&S) and specialty markets that many generalist agencies cannot, and we explain the trade-offs clearly so you can decide with confidence.
Available in all 50 states. See how requirements differ in California, Texas, Florida, New York, or choose your state.