Mid-market insurance

Insurance for materials handling equipment manufacturers

Reviewed by the Apex broking team · Last reviewed 2026-11-06

Materials handling equipment manufacturer insurance is the programme of liability, property and specialist covers a maker or distributor of conveyors, lifts, racking and lifting equipment needs. It matters because one failure can injure staff and stop a customer's whole operation.

Part of: Manufacturing insurance

In short

Makers and distributors of conveyors, hoists, racking and lifting equipment usually need products and public liability, employers' liability, property and business interruption, and often professional indemnity for system design. LOLER, PUWER and the Supply of Machinery (Safety) Regulations 2008 shape where liability falls after an accident. Installation work, hire fleets, inspection services and export sales all need to be declared. Products liability rarely covers throughput shortfalls or recall costs, so contract terms and extensions need checking at each renewal.

What insurance does a materials handling equipment business need?

A mid-sized maker or distributor of conveyors, hoists, lifting tables, racking, automated storage or forklift attachments usually needs a programme built around four things: products liability for equipment that fails in a customer's warehouse or factory, public liability for installation and service engineers working on customer sites, professional indemnity where the business designs layouts or systems, and property and business interruption cover for the fabrication shop, stock and any hire fleet.

On top of that sit employers' liability, which is compulsory, motor fleet for service vans and delivery vehicles, goods in transit or marine cargo for imported components and exported systems, cyber, and management liability. The detail that matters is how those covers meet. A conveyor that jams because the controls logic was wrong, injures an operative and stops a distribution centre can touch products liability, PI and the customer's own business interruption claim against you at once. Our manufacturing insurance guide explains the wider manufacturing programme; this page focuses on what is different for materials handling.

Main exposures and the cover that usually responds

Exposure	Typical example	Cover that usually responds
Equipment failure causing injury	Hoist or lifting table drops a load onto an operative	Products liability, subject to the policy terms
Damage to customer property	Conveyor fire or collapse damages stock and building	Products or public liability
Injury or damage during installation	Engineer drops a section of racking on a customer's vehicle	Public liability; contract works or erection all risks for the works
Faulty system design or throughput advice	Automated system never reaches the throughput promised	Professional indemnity, where design is declared
Fire or flood at the works	Paint shop fire stops fabrication for months	Property damage and business interruption
Breakdown of key plant	Press brake or laser cutter fails	Engineering and machinery breakdown cover
Hire fleet damaged or stolen	Hired-out pallet trucks or lifts lost at a customer site	Hired-out plant or equipment all risks
Staff injury	Welder or field engineer injured at work	Employers' liability (compulsory)
Goods moving between sites or abroad	Imported motors or exported systems damaged in transit	Goods in transit, marine cargo or stock throughput
Ransomware on design or ERP systems	Drawings and production schedules encrypted	Cyber
Claims against directors	HSE prosecution or investor dispute	Management liability or D&O

The rules that shape the risk: LOLER, PUWER and the machinery regulations

Three sets of regulations sit behind most materials handling claims, and they help explain where liability falls.

Supply of Machinery (Safety) Regulations 2008. The manufacturer, its authorised representative or the person placing machinery on the GB market must meet the essential health and safety requirements, carry out a risk assessment, compile a technical file and issue a declaration of conformity. Government guidance confirms that lifting accessories and partly completed machinery are within scope, that CE marking is recognised in Great Britain indefinitely alongside UKCA, and that the most serious offences can carry up to two years in prison.
LOLER 1998. The Lifting Operations and Lifting Equipment Regulations 1998 place duties on whoever owns, operates or controls lifting equipment. Under regulation 9, equipment whose safety depends on installation must be thoroughly examined after installation and before first use, and periodically: at least every six months for equipment lifting people and for lifting accessories, at least every 12 months for other lifting equipment, or under an examination scheme.
PUWER 1998. HSE explains that conveyors and simple pallet trucks fall outside LOLER but within the Provision and Use of Work Equipment Regulations 1998 (see our PUWER explainer). Most lifting equipment is covered by both.

Why this matters for insurance: the customer's employer carries the user duties, but when an accident happens the investigation usually reaches back to the design, the declaration of conformity, the installation and the last thorough examination. If your engineers carry out thorough examinations or racking inspections for customers, that is an inspection and advice service, and it needs to be declared so that it is clearly covered under liability or PI rather than falling between them. Under section 2 of the Consumer Protection Act 1987, a producer, own-brander or importer can be strictly liable for damage caused by a defective product, which is relevant if you import and rebadge equipment.

Illustrative examples

Illustrative example: the scissor lift

A manufacturer supplies lifting tables to a food distributor. A hydraulic hose fitting fails and a table drops while a worker is reaching underneath. The injured worker sues their employer, who brings a contribution claim against the manufacturer alleging a design defect. Products liability would usually respond to the injury claim and defence costs, subject to the policy terms. The cost of modifying the rest of the customer's tables would usually not be covered without a recall or rectification extension.

Illustrative example: the automated warehouse

A systems integrator designs and installs a shuttle storage system. Nothing is physically damaged, but the system runs at well below the contracted throughput and the customer claims for extra labour and lost sales. That is a pure financial loss arising from design, so products liability is unlikely to respond. Design and consultancy PI, if declared, is the policy built for it.

Illustrative example: hired-out equipment

A distributor hires out powered pallet trucks. One is damaged by the hirer's driver and another is stolen from an unsecured yard. Hired-out equipment cover, rather than the main property policy, usually deals with these losses, and the hire terms decide whether the cost can be recovered from the hirer.

What underwriters usually want to see

A split of turnover between manufacture, distribution of third-party products, installation, servicing and inspection, and hire.
Export split by territory, especially any sales to the USA or Canada, and whether you have assets or staff there.
How design is controlled: competent persons, design review, risk assessments, technical files and declarations of conformity.
Standard terms of sale and installation: liability caps, exclusion of consequential loss, and any indemnities you give to customers.
Subcontractor controls for installation, including their own insurance and method statements.
Fire protection at the works: paint and powder coating processes, hot work permits, battery charging areas and housekeeping.
Hire fleet values, tracking and the hire agreement used.
Five years of claims history across all classes, with any near misses that changed your procedures.

Common mistakes and misunderstandings

Assuming products liability covers everything a product does. It is usually limited to injury and physical damage. Throughput shortfalls, repair of your own product and recall costs are normally outside it.
Not declaring design or inspection work. Integrators and inspection teams often sit on a policy written for a fabricator.
Signing customer terms that go beyond what the policy covers. Liquidated damages, uncapped indemnities and acceptance of liability for downtime are common in warehouse projects. See our note on hold harmless and indemnity clauses.
Under-insuring work in progress at customer sites. Partly installed systems can be large values and may not sit within the main property sum insured.
Setting the business interruption indemnity period too short for the time it takes to replace specialist fabrication plant. Our guide to indemnity periods covers this.

When to review your programme

A growing materials handling business should review its programme when any of these happen:

You move from supplying equipment to designing and installing complete systems.
You win a framework or contract with a large logistics or retail operator whose terms set minimum limits or indemnities.
You start exporting, particularly to North America (see US jurisdiction risk).
You add an inspection, servicing or hire division.
You buy another business, which raises questions about its past products and product liability run-off.
Turnover or headcount has grown well beyond the figures on your last proposal.

A structured insurance programme review checks limits, extensions and contract terms against how the business now trades. Related reading: manufacturers insurance, insurance for industrial machinery manufacturers and lifting and rigging contractors.

Apex arranges insurance programmes for materials handling manufacturers and distributors; a broker reads every enquiry.

Sources

Frequently asked

Does products liability insurance cover a conveyor that stops a customer's warehouse?

Usually only if the stoppage follows injury or physical damage to property. If the conveyor simply underperforms or breaks down without damaging anything else, the customer's lost profit is usually treated as pure financial loss. That may be picked up by professional indemnity where you designed the system, or by a financial loss extension where one is agreed, subject to the policy terms.

Who is responsible for LOLER thorough examinations, the manufacturer or the user?

LOLER duties fall mainly on the employer or person who owns, operates or controls the lifting equipment, not the manufacturer. However, equipment whose safety depends on installation must be examined after installation and before first use, and many manufacturers offer examinations as a service. If you do, declare it to your insurers so the inspection work is clearly covered.

Do we need professional indemnity if we only manufacture equipment?

Possibly not, if you build to the customer's specification and give no design advice. Once you design layouts, specify systems, calculate loads or advise on throughput, a customer can claim for financial loss caused by that advice. Products liability policies commonly exclude professional advice given for a fee, so PI is worth considering at that point.

Is racking covered by LOLER?

Static storage racking is not lifting equipment, so LOLER does not usually apply to it, although stacker cranes and lifting devices that serve it may be. Racking damage and collapse claims still fall under products or public liability, and any inspection service you provide should be declared to insurers.

What employers' liability limit do we need?

The Employers' Liability (Compulsory Insurance) Regulations 1998 set a minimum of £5 million for any one occurrence, and a company with subsidiaries is treated as one employer for that purpose. Many mid-sized manufacturers choose a higher limit than the minimum, particularly where larger customers ask for one in their contract terms.

Mid-sized business? Have your programme reviewed

Send us your current schedules or renewal pack and we will review the whole programme and tell you plainly what to keep and what to change. No fee and no obligation. Or call 0117 325 0027.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.