Our Welded Seam Failed, Structure Collapsed: Metal Fab Insurance Paid $XM Claim!
The Weld That Cost a Million Dollars
My company fabricated the steel support beams for a new commercial building. A year after it was built, one of our key welds failed, causing a partial roof collapse. The damage was over $1 million. The investigation proved our welder had made a critical error. This is the ultimate nightmare for a fabricator. Our “Completed Operations” coverage, a key part of our liability insurance, was the only thing that saved our business. It paid for the massive property damage caused by our faulty workmanship long after we had left the job site.
Forging Protection: Essential Insurance for Metal Fabricators
We Turn Raw Steel Into Risk Every Day
The owner of the metal fabrication shop where I work says, “We take raw, stable steel and we cut it, bend it, and weld it. Every step adds value, but it also adds risk. A bad cut, a weak weld, a sharp edge—we’re literally forging risk.” He explained that his insurance program is like a tempering process for the business. It takes that raw, brittle business risk and, through financial protection, makes the company strong, resilient, and able to withstand the intense heat of a major lawsuit or accident.
Metal Fabrication Insurance Needs: Product Liab, CGL (Completed Ops!), WC, Property, Inland Marine!
The Five Metals of Our Financial Armor
A metal fabricator’s insurance is like a suit of armor made from five essential metals. Product Liability and Completed Operations is the thick steel chest plate, for when our work fails in the field. Property insurance is the sturdy helmet, protecting our shop from fire. Workers’ Comp is the tough gauntlets, for our welders’ hands. And Inland Marine is the armored boots, protecting our tools when we go to a job site. You need the full suit to be protected from every angle of attack.
Product Liability for Failure of Fabricated Metal Components (Structural, Automotive, etc.)!
The Bracket That Snapped and the Machine That Fell
My shop fabricated a custom steel mounting bracket for a heavy piece of machinery in a factory. A microscopic flaw in the steel we used caused our bracket to snap. The multi-ton machine crashed to the floor, destroying itself and injuring the operator. The lawsuit against our shop was for millions. Our Product Liability insurance is designed for this catastrophic scenario. It protects us when a component we made fails and causes immense damage or bodily injury.
Completed Operations Liability: What if Your Work Fails AFTER Installation? CRITICAL!
The Railing We Installed Last Year Collapsed This Year
My company fabricated and installed a decorative iron railing for an apartment balcony. A year later, a weld on the railing failed, and it collapsed, seriously injuring a resident. This is a “Completed Operations” claim. Our work was finished and we were long gone, but our liability for that work is ongoing. This coverage, which is part of our General Liability policy, is one of the most critical protections for a fabricator. It protects us from the ticking time bombs of our past projects.
Workers’ Comp for Welders, Machinists, Fabricators (Burns, Cuts, Eye Injuries, Fumes!) High Risk!
The Most Dangerous Jobs in the Building
The floor of our metal fabrication shop is a symphony of hazards. Our welders face the constant risk of severe burns and “welder’s flash” in their eyes. Our machinists work with powerful cutting tools that can cause devastating injuries. And everyone is exposed to metal dust and fumes. Our Workers’ Compensation policy is the mandatory insurance that covers these high-risk industrial jobs. It pays for the medical care for a bad burn, an eye injury, or even a long-term respiratory illness, protecting our most valuable asset: our skilled tradespeople.
Property Insurance Covering Your Fab Shop, Welding Equipment, CNC Machines, Inventory! (Fire Risk!)
The Spark That Ignited a Disaster
A spark from a grinder in our metal shop landed in a trash can of oily rags, starting a fire that swept through our facility at night. The fire destroyed our expensive CNC plasma cutter, our welding machines, and a huge stock of raw steel. The total loss was over $500,000. Our Commercial Property insurance was our savior. It paid to replace all the damaged machinery and inventory, allowing us to rebuild and get back to work. For a metal shop, fire is a constant and massive threat.
Inland Marine Coverage for Your Tools & Equipment Used Off-Site or In Transit!
The Stolen Welder From the Job Site
My company does a lot of on-site welding and installation at construction sites. Our crew left a portable, high-end welding machine, worth over $10,000, on a job site overnight. In the morning, it was gone. Our standard property policy only covers our own shop. But our “Inland Marine” or “Tool Floater” policy did cover the loss. It’s the essential coverage that protects our valuable tools and equipment when they leave our property and are in transit or at a customer’s location.
Comparing Insurance Policies for Different Metal Fab Specialties (Structural vs. Sheet Metal vs. Machining)
A Steel Beam is Not a Surgical Tool
A fabricator who makes massive structural steel beams for skyscrapers has one risk profile—a catastrophic collapse. A shop that does precision CNC machining to make tiny, complex components for medical devices has another—a high-stakes product liability if their part fails. And a sheet metal shop that makes HVAC ducts has a third. The insurance policy for each is highly specialized. The structural steel fabricator needs massive liability limits. The medical component maker needs intense quality control and E&O coverage.
Does Your Policy Cover Damage Caused During Transport or Installation of Large Fabricated Pieces?
The Oversized Beam and the Overpass
Our shop was transporting a massive, oversized steel beam to a construction site. The driver misjudged the height of an overpass and the beam struck the bridge, causing major damage to both the beam and the bridge. Our insurance handled this in two ways. Our “Inland Marine” policy covered the damage to the beam we were transporting. And our “Commercial Auto” policy’s liability section covered the damage to the state-owned bridge. It was a complex claim that required multiple policies to work together.
Filing Claims Related to Product Failures, Worker injuries, or Installation Damage
Document, Isolate, Report
When a custom-welded part we installed at a client’s site failed, our foreman’s response was by the book. First, he secured the area and made sure no one else could get hurt. Second, he took detailed photos of the failed weld and the surrounding damage. Third, he carefully isolated the broken part as evidence. Finally, he called our office to report the incident so we could immediately notify our insurance company. That professional process is key to a successful liability claim.
Saw a Welded Balcony That Looked Shaky: Wondering About the Fabricator’s Insurance!
The Trust We Place in Invisible Welds
I was standing on the balcony of a new apartment building and looked closely at the welded joints on the railing. It made me think about the immense trust we place in the skill of the anonymous welder and the quality control of the fabrication shop that built it. If one of those welds were to fail, the result could be tragic. It also made me hope that the fabrication company has a massive “Completed Operations” liability policy to stand behind their work long after they’ve been paid.
Protecting Your Business from Costly Lawsuits Over Structural Integrity!
Our Weld is Our Bond (and Our Biggest Liability)
In our structural steel fabrication business, the integrity of a single weld can be the difference between a safe building and a catastrophic collapse. The lawsuits that arise from a structural failure are immense, often involving multiple deaths and millions in property damage. Our Product Liability insurance, with its critical “Completed Operations” coverage, is the most important policy we own. It is the financial guarantee that stands behind the structural integrity of every single piece of steel that leaves our shop.
Equipment Breakdown Coverage for Press Brakes, Lasers, Welding Machines?
The Day Our Laser Cutter Died
The sophisticated laser cutter in our fab shop—a $250,000 machine—suffered a major failure of its main power unit. It wasn’t a fire; the machine just died. The repair would take weeks. Our standard property policy doesn’t cover internal mechanical or electrical failure. But our separate Equipment Breakdown policy does. It paid for the expensive emergency repair of the laser and covered our lost income while our most critical machine was out of service.
Finding Insurers Who Understand Metal Fabrication Risks
Our Agent Knew the Difference Between TIG and MIG Welding
When our shop was getting insurance quotes, the first agent we talked to didn’t know anything about metal fabrication. The second broker we met, a specialist in manufacturing, asked to see our welders’ certifications and our quality control manual. He knew the difference between TIG and MIG welding and understood the unique risks of our business. For a skilled trade like metal fabrication, you need an insurance partner who understands what you do and can speak your language.
Coverage for Hot Work (Welding/Cutting) Operations: Strict Safety Protocols Required!
The Welding Permit That’s Part of Our Policy
Our property insurance policy has a specific “Hot Work Warranty.” It’s a clause that requires us to follow a strict safety protocol every time we do any welding or grinding. We have to issue an internal “hot work permit,” have a fire extinguisher on hand, and have someone stand as a “fire watch” for 30 minutes after the work is done. If we fail to follow these steps and have a fire, our insurer could deny the entire claim. Our safety procedures are a contractual requirement of our insurance.
Product Recall Exposure If Your Part is Used in a Larger Assembly?
Our Bolt Was Recalled, and It Cost Us a Fortune
My company manufactures a specific type of high-strength bolt used in the suspension of a popular truck. The truck manufacturer discovered a flaw in our bolt and had to recall 50,000 trucks to replace it. Our Product Liability policy would cover us if the bolt failed and caused an accident. But it did not cover the truck company’s huge costs for the recall. For that, we needed a separate Product Recall insurance policy. It’s a critical coverage for any component part manufacturer.
Protecting Against Theft of Valuable Raw Materials (Steel, Aluminum, Copper)? Property/Crime.
The Copper That Walked Out the Door
Our fabrication shop had a large inventory of copper and aluminum, which have a high scrap value. We started noticing our inventory was consistently short. We installed new cameras and caught two of our own employees stealing the raw materials and selling them for scrap. The total theft was over $30,000. Our standard property policy didn’t cover this internal theft. We needed our separate Crime Insurance policy, with its “Employee Dishonesty” coverage, to be reimbursed for the loss.
How Quality Control (Welding Certs, ISO) Impacts Insurance Rates
Our Welders’ Certs Save Us 10% on Our Premium
My company requires every single one of our welders to be certified by the American Welding Society (AWS). It’s a major investment in training and testing. At our insurance renewal, we provide our insurer with a copy of every welder’s certification. Because the insurer knows our work is being done by certified professionals to a verifiable standard, they view us as a much lower risk for a product failure. This earns us a significant “quality control credit” on our liability insurance premium.
Metal Fabrication Insurance: Shielding Your Business from Liability Heat
The Financial Forge That Strengthens Your Company
The process of metal fabrication uses intense heat and pressure to shape raw steel into a strong, useful product. A great insurance program for a fabrication business does the same thing. It applies a layer of financial protection that allows your business to withstand the intense heat of a major lawsuit and the pressure of a catastrophic accident. It forges a stronger, more resilient company that is shielded from the dangers of its own powerful work.
Pollution Liability from Welding Fumes or Metal Finishing Chemicals?
The Fumes from Our Shop and the Lawsuit from Our Neighbors
Our metal fabrication shop uses various chemicals for metal finishing and cleaning. A group of residents in the neighborhood behind our shop filed a lawsuit against us, claiming that the fumes from our operation were causing them health problems and lowering their property values. Our General Liability policy specifically excludes pollution-related claims. We needed a separate Environmental Liability policy to defend us against this lawsuit, a crucial coverage for any industrial business that uses chemicals.
Understanding Your Deductible for Completed Operations Claims
The $25,000 Check We Had to Write First
A structural beam we fabricated a year ago failed, causing a major claim. Our “Completed Operations” liability policy covered the million-dollar loss. But first, we had to pay our deductible, which for this specific type of high-risk claim, was a whopping $25,000. Our deductible for a simple slip-and-fall in our shop is only $2,500. It’s a critical financial detail: the deductible for a failure of your finished work is often much, much higher, reflecting the greater severity of those claims.
Liability Arising from Errors in Shop Drawings or Specifications? E&O?
We Built It Perfectly, But the Drawing Was Wrong
My company fabricated a complex piece of equipment for a client, following their detailed engineering drawings exactly. After we installed it, we discovered there was a major error in the client’s drawing, and the part didn’t fit. The client refused to pay and claimed we should have caught the error. This is a complex dispute. To protect ourselves, we carry an Errors & Omissions (E&O) policy. It defends us in situations where our professional review of a client’s plans is called into question.
Coverage for Damage to Customer Materials While in Your Possession (Bailee)?
We Scratched Their Stainless Steel, We Bought It
A client supplied us with several sheets of very expensive, polished stainless steel to be fabricated into a custom countertop. One of our workers accidentally put a deep scratch in one of the sheets, ruining it. Because the material was owned by our customer, our standard property policy didn’t cover it. But our “Bailee’s Coverage” endorsement did. It’s special insurance that covers our liability for damage to our customers’ property while it is in our care.
Metal Fabrication Insurance: Welding Together Your Financial Security
The Strongest Joint in Your Business Plan
In metal fabrication, the weld is the most critical point. It’s the joint that holds everything together and gives the structure its strength. In the business of metal fabrication, a comprehensive insurance program is your most important weld. It’s the powerful financial joint that holds your assets, your employees, and your reputation together. It’s the seamless, expertly fused protection that gives your entire business the strength to stand tall against the immense pressures of liability and risk.