How Much Does Insurance Cost For Machine Shops? 2026 Rates

U.S. machine shops can expect to pay between $540 and $720 annually for comprehensive business insurance, averaging $45 to $60 per month. The primary cost drivers are business size, location, equipment value, number of employees, types of services offered, safety measures, coverage limits, and policy deductibles.

How Much Does Machine Shop Insurance Cost?

On average, a machine shop in the U.S. could expect to spend between $540 and $720 annually for a comprehensive business insurance plan. However, this is only a general estimate, your shop’s specific requirements may lead to different costs. 

If you run a machine shop, having the right insurance is an important part of protecting your business. But insurance prices can vary a lot, and many shop owners are not sure what to expect. 

The cost depends on things like the size of your shop, the equipment you use, and the type of work you do. 

Here are some of the biggest cost drivers:

• Number of employees (affects workers’ comp and liability)
• Property size and value (affects commercial property coverage)
• Type of machining work you perform (affects professional liability and general liability) 
• Location (affects property insurance)
• Annual revenue and production volume (affects product liability and general liability)
• Past claims history (insurers charge more if you’ve filed claims)
• Business interruption coverage and other add-ons

Understanding these factors can help you budget better and choose the coverage that fits your needs. 

Average Machine Shop Insurance Costs For Coverage Types

Machine shop insurance isn’t one single policy, it’s a combination of different types of coverage that protect your business in different ways. Each policy has its own price, and the cost depends on various factors. By understanding the average cost of each coverage type, you can plan your budget more accurately. 

• General liability insurance: $45 per month
• Business owner’s policy: $120 per month
• Workers’ compensation insurance: $149 per month
• Commercial auto insurance: $249 per month
• Commercial property insurance: $150 per month
• Commercial umbrella / excess liability insurance: $96 per month

General Liability Insurance

The average cost of general liability insurance for a machine shop is about $45 per month.

General liability insurance protects your machine shop if someone gets hurt, or if you accidentally damage someone else’s property. It is one of the most important policies for any machine shop because it handles common risks that can happen during everyday work. 

Several factors impact the cost including business size, location, customer traffic volume, and previous claims history.

General liability insurance usually includes product liability coverage, which protects you if someone claims they were harmed by a product you manufactured or sold. 

Policy limits: $1 million per occurrence and $2 million aggregate.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on average annual premiums for machine shop businesses, compiled from both national carriers and regional insurance agencies. They reflect typical coverage limits for small-to-medium operations, considering risks such as equipment use, employee injury, property damage, and liability tied to manufacturing processes. Actual premiums will vary depending on shop size, number of employees, claims history, type of machinery used, and whether additional coverages (like Workers’ Compensation or Product Liability) are bundled with General Liability.

Business Owner’s Policy (BOP)

The average cost of a business owner’s policy (BOP) is about $120 per month for a machine shop.

A business owner’s policy is a bundle of insurance policies sold together at a lower price. It usually includes general liability with commercial property insurance. 

A BOP is a good option for many machine shops because it provides important coverage in one package and is often cheaper than buying each policy separately. 

Several factors impact the cost including the machine shop’s property value, location risks, business revenue, number of employees, and any optional endorsements like business interruption insurance.

Policy limits: $1 million per occurrence and $2 million aggregate for liability.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates reflect average Business Owner’s Policy (BOP) premiums for machine shop businesses, which typically combine general liability and commercial property coverage. Figures account for industry-specific risks such as equipment damage, fire hazards from machinery, employee injury, and property coverage for tools and shop facilities. Actual premiums will vary depending on shop size, number of employees, services offered, location, coverage limits, and claims history.

Workers’ Compensation Insurance

The average cost of workers’ compensation insurance for a machine shop is around $149 per month.

Workers’ compensation insurance protects your employees and your business if someone gets sick or hurt because of their job. For a machine shop, where workers use heavy machinery and tools, this coverage is especially important because it helps keep both your team and your business safe. 

Premiums are influenced by the size of your payroll, the type of work employees perform , your claims history, and any implemented safety programs.

State rules decide the coverage limits, but workers compensation usually pays for medical care and part of an employee’s lost wages, with no fixed maximum amount. 

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates are based on average annual Workers’ Compensation premiums for machine shop businesses, incorporating state-specific base rates, employee classifications, and payroll ranges typical of both small independent shops and larger industrial operations. Actual premiums will vary depending on your shop’s size, claims history, number of employees, and insurer underwriting practices.

Commercial Auto Insurance

The average cost of commercial auto insurance for a machine shop is about $249 per month.

Commercial auto insurance protects any vehicles your machine shop uses for business, like vans, trucks, or service vehicles. This type of insurance helps pay for repairs, medical bills, and even legal fees if needed. 

Factors influencing the cost include the number and type of vehicles, how often they are used, and the driving records of employees.

Most states require businesses to have this coverage for vehicles they own. If your business uses rented, personal, or leased vehicles, you’ll need hired and non-owned auto insurance (HNOA) instead. 

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates reflect average annual premiums for machine shop businesses that operate service vans, pickup trucks, or small box trucks used for transporting tools, fabricated parts, and raw materials. Rates are based on blended averages from both small and large agencies, incorporating regional risk exposure, liability coverage levels, and vehicle usage patterns unique to manufacturing operations. Actual premiums will vary depending on shop size, fleet composition, driving history, and insurer underwriting practices.

Commercial Umbrella Insurance

The average cost of commercial umbrella insurance for a machine shop is about $96 per month.

Commercial umbrella insurance is extra protection that goes beyond the limits of your regular business insurance policies, like general liability or commercial auto insurance. For example, if a customer is seriously injured in your machine shop and sues you for $2 million, but your general liability policy only covers $1 million, commercial umbrella insurance would step in to cover the remaining $1 million, helping protect your business from paying out of pocket.

Umbrella insurance is usually sold in amounts of $1 million at a time. The more coverage you choose, the more it will cost.

Here’s a look at the average annual premiums for 10 different states:

Note: These estimates reflect average annual premiums for Commercial Umbrella insurance tailored to machine shop operations, based on aggregated data from both small and large insurance agencies. Figures account for location-specific liability exposures, equipment-heavy environments, employee count, and claims history. Actual premiums will vary depending on your shop’s unique profile, coverage limits, and insurer underwriting criteria.

Machine Shop Business Insurance Costs By Provider

Machine shop business insurance costs will vary greatly depending on the insurance carrier. Use the table below to find average costs across different providers.

Note: These estimates are based on average annual premiums for machine shop businesses, considering both small and large agencies. Coverage typically includes general liability, workers’ compensation, commercial property, equipment breakdown, and product liability insurance. Actual premiums will vary depending on shop size, number of employees, equipment value, services offered (e.g., fabrication, repair, precision machining), claims history, and coverage limits.

What Factors Impact Your Machine Shop Insurance Costs?

The cost of insurance for your machine shop can vary a lot depending on several factors. By understanding what affects your insurance costs, you can make better decisions about coverage and budget for your machine shop. 

Type Of Machine Shop

Shops that do heavy-duty work like welding or CNC machining usually pay more than small repair or assembly shops. Riskier work means higher insurance.

Use Of Hazardous Materials Or Chemicals

If your shop uses oils, solvents, or flammable materials, that increases your fire and health risks, which can raise your premiums.

Location

Shops in areas with high crime, flooding, or in busy urban zones may pay more for coverage. If you’re in a low-risk, quiet area, your insurance could be cheaper.

Size Of Your Operation

A bigger shop with more machines, employees, or clients has a higher chance of accidents or claims. That usually means higher insurance costs.

Value Of Property And Equipment

If your shop has expensive machinery like CNC mills, lathes, or custom tools, your commercial property insurance will cost more. Many shops also add coverage for equipment breakdown or business interruption.

Production Output

Production output refers to how much work your machine shop produces, like the number of parts you make or the amount of work you complete in a certain time. If your shop produces a number of items or works on high-volume projects, your insurance costs may be higher. This is because a higher output means there’s more chance for accidents, damage, or errors, which can lead to more claims. 

How To Lower Your Machine Shop Insurance Costs

Machine shop insurance is important, but it can also get expensive. Luckily, there are several ways you can lower your insurance costs without cutting back on coverage. Here are some tips to help you save money while still protecting your business. 

1. Policy Bundling

Bundling means combining multiple types of insurance into one package with the same provider, like property insurance or general liability insurance. Insurance companies often give discounts for bundling, so it can lower your overall costs.

2. Shop Multiple Insurance Companies

Instead of sticking with the same insurance provider, it’s a good idea to compare prices and coverage options from different companies. This can help you find the best deal for your needs. 

3. Pay Annually Instead Of Monthly

Paying for your insurance all at once for the entire year is often cheaper than paying monthly. Insurance companies may charge extra fees if you choose to pay monthly, so paying annually can save you money in the long run. 

4. Review & Adjust Your Coverage Annually

Each year, take a look at your insurance to see if anything has changed in your business, like equipment, workers, or production levels. If something has changed, adjust your coverage to avoid overpaying for protection you no longer need. 

5. Increase Your Deductible

If you raise your deductible (meaning you pay more upfront in the event of a claim), your monthly or annual premiums may be lower. Just make sure you can afford the higher deductible if something happens.