# Insurance for CNC machining, turning and subcontract manufacturing in Germany

> A machining centre costs as much as a house, and one spindle crash can put it out of action for weeks. Your parts also end up in other companies' machines, vehicles and plants, so a tolerance error in a batch gets expensive there, not in your shop. Here is how CNC machining, turning and subcontract manufacturing businesses in Germany protect themselves and what it roughly costs.

Quelle/Source: https://www.nammert.com/en/business-insurance-cnc-machining.php  
Updated: 2026-10-15

## Is it covered if my operator crashes the spindle into the workpiece?

Yes, that is the classic case for machinery breakdown insurance. It pays repair or replacement after operator error, clumsiness or short circuit, less your excess. Contents insurance alone does not cover this; it mainly pays for fire, water, storm and burglary.

## At a glance

- **Compulsory:** No compulsory insurance for the business itself. As a manufacturer you are liable under the German Product Liability Act for defective parts even without fault
- **Trade status:** Precision mechanics is listed in Annex A of the German Crafts Code; a craft business needs entry in the crafts register
- **Biggest risk:** Collisions or spindle damage on expensive machines and batch errors that cause costs at the customer
- **Basic cover from:** about €600 a year of business liability for a small job shop, a guide figure from our quoting work
- **Often forgotten:** The customer's removal and refitting costs, which only extended product liability covers

## What goes wrong in this trade

- **Machine crash:** Wrong zero point, a forgotten tool or a program error and the spindle collides. Repair and downtime quickly cost five figures.
- **Tolerance error in a batch:** A hole pattern is a tenth of a millimetre out and the customer only notices during assembly. Then it is about sorting, rework and line stoppages.
- **Chips and coolant:** Oily chips, oil mist and extraction units are typical fire starters, especially with magnesium and titanium.
- **Customer material:** Many subcontractors machine expensive stock or castings supplied by the customer. Scrap it and the customer wants it replaced.
- **Data and programs:** CAM files, drawings and machine programs sit on your network. Ransomware stops production just like a fire.
- **Hands near the machine:** Cuts, crush injuries and metal splinters in the eye are among the most common accidents in machining.

**Risk radar** (Compared with other trades, 1 low to 5 high.): Liability 4, Fire and water 5, Theft 3, Cyber 3, Downtime 5, Health 4

## The insurance you need

- **Business liability** (Essential): With extended product liability for removal and refitting, inspection and sorting costs, and processing damage to supplied material. https://www.nammert.com/en/insurance-broker-business-liability.php
- **Machinery breakdown** (Essential): Pays after collisions, operator error and short circuits on machining centres, lathes and measuring machines. https://www.nammert.com/en/insurance-broker-machinery-breakdown.php
- **Business contents** (Essential): Replaces machines, tools, fixtures and stock after fire, water, storm and burglary. https://www.nammert.com/en/insurance-broker-business-contents.php
- **Business interruption** (Strongly advised): Covers lost profit and fixed costs while production stands after fire or breakdown, ideally linked to the machinery and contents policies. https://www.nammert.com/en/insurance-broker-business-interruption.php
- **Cyber insurance** (Strongly advised): If CAM stations, machines and ERP are networked, an attack halts production. https://www.nammert.com/en/insurance-broker-cyber-insurance.php
- **Commercial buildings** (Depends on the business): If you own the hall, against fire, storm and snow load. https://www.nammert.com/en/insurance-broker-commercial-buildings.php
- **Group accident insurance** (Depends on the business): A lump sum for staff on top of statutory cover, for example after permanent hand injuries. https://www.nammert.com/en/insurance-broker-group-accident.php

## What it costs: example prices

Machine values, turnover, customer industries and fire protection decide the premium. Supplying the car or medical device industry makes product liability dearer than tool making or one off parts.

| Insurance | Example | Typical range |
| --- | --- | --- |
| Business liability | Small job shop, turnover up to €400,000, €3 million limit | about €600 to €1,500 a year |
| Business liability | Supplier with 20 staff, extended product liability | about €3,000 to €8,000 a year |
| Machinery breakdown | Three machining centres worth €900,000 in total, €2,500 excess | about €2,500 to €6,000 a year |
| Business contents | Machines, tools and stock worth €1.2 million | about €1,200 to €3,000 a year |
| Cyber insurance | Small business, €250,000 sum insured | about €700 to €1,800 a year |

For comparison: Machinery breakdown cover for one machining centre costs about as much a year as a good set of vices and clamps.

_Guide figures from our own quoting work, excluding German insurance premium tax, October 2026. We obtain the exact premium from several insurers. The sources below support the legal statements._

- [German Product Liability Act, § 1](https://www.gesetze-im-internet.de/prodhaftg/__1.html)
- [German Crafts Code, Annex A](https://www.gesetze-im-internet.de/hwo/anlage_a.html)

## Our suggestions: three packages

- **Workshop** (Small turning or milling shop with two to four machines): Business liability, Business contents, Machinery breakdown. Together: about €2,500 to €6,500 a year
- **Subcontractor** (Batch production for industrial customers, several shifts): Business liability, Business contents, Machinery breakdown, Business interruption, Cyber insurance. Together: about €8,000 to €20,000 a year
- **Supplier with own hall** (Machining for automotive or medical technology, own building): Business liability, Business contents, Machinery breakdown, Business interruption, Cyber insurance, Commercial buildings, Group accident insurance. Together: individual, usually from about €20,000 a year

## The worst day in a CNC shop

Six losses that happen in turning and milling shops, packed into one Tuesday. Tap through and see who pays.

- 06:20: After a tool change the five axis spindle drives into the fixture. (€38,000, Paid by: Machinery breakdown)
- 09:00: The customer reports 8,000 flanges with offset holes: sorting and replacement at his plant. (€46,000, Paid by: Business liability)
- 11:30: A titanium block supplied for an aerospace part is machined wrongly. (€9,000, Paid by: Business liability)
- 13:15: Ransomware locks the CAM stations and order data. (€28,000, Paid by: Cyber insurance)
- 15:50: Oily chips in the extraction catch fire, damaging two machines and the tool store. (€180,000, Paid by: Business contents)
- 16:30: Production stops for six weeks while wages and leases keep running. (€110,000, Paid by: Business interruption)

**Damage so far:** €411,000

## Practical tips from your broker

- Insure machines at replacement value and update the list whenever a new one arrives.
- Include processing damage to customer supplied material in your liability policy.
- If you produce in batches, add extended product liability with removal and refitting costs.
- A higher excess on machinery cover cuts the premium noticeably; many shops pay small losses themselves anyway.
- Back up CAM data and programs daily, separate from the network; it helps after an attack and the cyber proposal asks about it.
- Set the indemnity period for lost income by the delivery time of your most important machine.

## Why NAMMERT for your business

- **Machines and liability in one view:** Breakdown, lost income and product liability interlock. We align the parts and compare several insurers.
- **Claims experience of our own:** In boat insurance we handle claims ourselves and know which documents are needed after a machinery loss.
- **Independent broker:** Cover is arranged by Norman Nammert as an insurance broker, not tied to any insurer, and explained in English.
- **Family business since 1989:** Our work is free for you; the insurer pays our commission.

## FAQ

### What insurance does a CNC machining business in Germany need?

Business liability with extended product liability, machinery breakdown and contents insurance. Often also business interruption and cyber cover.

### What does insurance for a small turning shop cost?

For liability, contents and machinery small shops usually pay about €2,500 to €6,500 a year. That is a guide figure from our quoting work.

### Is a machine crash covered?

Under machinery breakdown insurance yes, including operator error. Without it you usually pay the repair yourself.

### Am I liable for my customer's follow on costs?

Under the Product Liability Act you are liable for injury and property damage caused by defective parts. For the customer's sorting, removal and refitting costs you need extended product liability.

### Do I need a master craftsman to run a CNC shop?

As a precision mechanics craft business yes, because the trade is in Annex A of the Crafts Code. Industrial firms belong to the chamber of industry and commerce instead.

### Is material supplied by my customers insured?

Against fire and burglary under contents insurance if third party property is included. For mistakes during machining you need processing damage in your liability policy.

## Request quotes

We obtain quotes and come back with a comparison, free of charge. You can write in English. https://www.nammert.com/en/business-insurance-cnc-machining.php#anfrage

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Your broker: Norman Nammert, trading as NAMMERT. Insurance broker licensed under section 34d(1) of the German Trade Regulation Act. Broker register no. D-C08Q-TOSD4-37. NAMMERT Assekuradeur GmbH is a separate company. It does not arrange your contract.

NAMMERT Assekuradeur GmbH, Karl-Marx-Straße 4, 15711 Königs Wusterhausen, +49 3375 29 12 77, info@nammert.com. Wikidata: Q141141479.