Precision Requires Protection
Tool and die manufacturers are the backbone of modern production—designing the molds, dies, and jigs that shape nearly every manufactured product. But with tight tolerances comes tight risk. A single machine failure or liability claim can shut down your entire operation.
Tool and Die Manufacturing Insurance offers tailored protection for your tools, workforce, and bottom line—so you can keep building the components that build everything else.
What Does Tool and Die Manufacturing Insurance Cover?
The manufacturing process in this industry is complex, involving precision CNC machining, heat treating, and high-value materials. Typical coverage includes:
General Liability Insurance – Protects against third-party injuries or property damage caused by operations or faulty dies/tools
Product Liability Insurance – Covers claims if a defective mold or die causes production errors or product damage downstream
Commercial Property Insurance – Safeguards your building, machines, dies, jigs, and materials from fire, theft, and natural disasters
Workers’ Compensation Insurance – Required in California, this covers employee injuries from machinery, burns, or repetitive strain
Equipment Breakdown Insurance – Covers the cost to repair or replace CNC machines, EDMs, mills, and lathes due to electrical or mechanical failure
Business Interruption Insurance – Provides income replacement if a covered event halts production
Errors and Omissions (E&O) Insurance – Protects against financial losses stemming from engineering or design flaws in custom tooling
Cyber Liability Insurance – Shields your shop from digital threats to CAD/CAM files, customer data, or production schedules
Many shops opt for a Business Owner’s Policy (BOP), which bundles property and liability insurance into one cost-effective package.
Why Tool and Die Shops in California Need Insurance
Operating a tool and die shop in California means navigating not only tight tolerances in your work, but also tight regulatory and legal standards. Insurance coverage helps manage risks like:
Machine Downtime – Expensive equipment is critical to production. A breakdown could halt revenue for days or weeks
High Precision = High Liability – A misaligned die could cause entire batches of client products to be defective
Employee Safety Hazards – Your team works with high-speed machines, heavy metals, and hot surfaces
Client Contracts – Many require proof of General Liability Insurance and professional liability
Cyber Vulnerabilities – CAD/CAM software and proprietary designs must be protected from cyberattacks
Environmental Compliance – Proper disposal of cutting fluids and lubricants is essential under California regulations
Frequently Asked Questions
Is Tool and Die Insurance different from general manufacturer insurance?
Yes. It’s specifically tailored for risks in precision machining, mold making, and metal tooling. It includes coverages like E&O and machine breakdown that general manufacturer policies may not.
Do I need product liability even if I don’t sell consumer products?
Yes. If your die or mold contributes to a defect in your client’s product, your business can be held financially responsible.
What’s the most important insurance for a small tool and die shop?
While every shop is different, a combination of equipment breakdown, product liability, and workers’ compensation is essential.
Can I cover my CAD software and designs?
Yes. Cyber liability and professional liability policies can protect proprietary data, software, and technical errors.
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Still Have Questions?
Whether you’re expanding your floor space or integrating new robotic automation, let’s make sure your insurance grows with your operation. Our team works closely with manufacturers across California to deliver scalable coverage that protects your shop now—and into the future.