Engineering Inspection Insurance: LOLER, PUWER & PSSR
Why is engineering inspection a legal duty, not an optional extra?
If your business operates lifting equipment, pressure systems or many kinds of powered work equipment, having them thoroughly examined by a competent person is not a recommendation — it is the law. The duty sits in health and safety regulation, it applies whatever the size of your business, and the penalties for getting it wrong run from prohibition notices to unlimited fines and, in the gravest cases, imprisonment.
This is where engineering inspection insurance comes in — and where a lot of confusion lives. "Engineering inspection" and "statutory inspection" are the same thing: the traditional name insurers and older industrial businesses used, and the modern regulatory name, both describing the legally required thorough examination of plant. Historically, insurers provided this service through their own engineer surveyors, which is why the inspection contract and the plant insurance so often sit together. This guide separates the legal duty from the insurance, and shows how the two fit.
It matters because the two failures compound. Skip the statutory examination and you breach the law; suffer a breakdown of uninspected plant and your commercial property and machinery cover may decline the claim for non-compliance. At Miller & Partner we structure plant and inspection programmes through The Insurability Framework™ — underwriter intelligence, difficult-risk expertise, risk assessment and claims advocacy — so the inspection regime and the insurance reinforce each other instead of leaving a gap.
Engineering inspection: key facts at a glance
- Statutory thorough examination of lifting equipment, pressure systems and work equipment is a legal requirement, not optional.
- "Engineering inspection" and "statutory inspection" are the same thing — the insurer's traditional name and the modern regulatory name.
- The competent person must be independent — your own maintenance engineer who services the kit cannot also examine it.
- Lifting equipment that lifts people is examined every 6 months; other lifting equipment every 12 months, unless an examination scheme specifies otherwise.
- Pressure systems are examined to a written scheme of examination under PSSR 2000.
- Non-compliance risks prohibition notices, unlimited fines and imprisonment under HSE enforcement.
- Engineering inspection cover bundles the competent-person service with optional machinery breakdown (sudden and unforeseen damage) cover.
What is engineering inspection insurance, and what does it include?
Engineering inspection insurance is really two things sold together. The first is a statutory inspection service: the insurer's (or an accredited body's) qualified engineer surveyor visits your site, carries out the thorough examination required by law, and issues the written report that proves compliance. The second is optional machinery breakdown (engineering) cover: insurance for the sudden and unforeseen failure of the plant itself, and the costs that flow from it.
A well-structured programme typically provides:
- The thorough examination service — competent-person inspection of lifting equipment, pressure systems, lifts, power presses, LEV and more, with statutory reports.
- Machinery breakdown / sudden & unforeseen damage — repair or replacement of insured plant after an internal mechanical or electrical failure.
- Resultant damage and consequential cover — damage to surrounding property, deterioration of stock, and business interruption following an insured breakdown.
- Record-keeping and audit trail — the inspection reports lenders, buyers, solicitors and the HSE will all ask to see.
Inspection vs servicing vs machinery breakdown — what's the difference?
These three get blurred constantly, and the confusion is expensive — businesses assume their service contract or their property policy has them covered when it does not. Here is the clean distinction:
| What it is | What it is NOT | |
|---|---|---|
| Statutory thorough examination | A formal, independent legal assessment of whether equipment is safe to remain in service, producing a written legal record. | Not a service or repair. The competent person assesses; they don't fix. |
| Servicing / maintenance | Routine upkeep and repair by your maintenance provider to keep equipment in working order. | Not a substitute for the independent examination — the same engineer can't do both. |
| Machinery breakdown insurance | Cover that pays to repair or replace plant after a sudden, accidental internal failure. | Not the inspection, and not for wear and tear or gradual deterioration. |
| Property / plant "all risks" | Cover for external events — fire, theft, flood, impact damage to the plant. | Not internal breakdown, which is the machinery section's job. |
The takeaway: the law requires the examination; the insurance pays for the breakdown; and your property policy covers external damage. You usually need all three, and a key reason to place plant through a specialist commercial broker is to make sure they line up without gaps or double cover.
Which regulations require statutory inspection (LOLER, PUWER, PSSR)?
Several overlapping regimes apply depending on the equipment. The main ones:
- LOLER 1998 — the Lifting Operations and Lifting Equipment Regulations 1998 govern lifting equipment: cranes, hoists, passenger and goods lifts, forklift trucks, vehicle lifts, slings and accessories. Regulation 9 requires the thorough examination.
- PUWER 1998 — the Provision and Use of Work Equipment Regulations 1998 cast a wider net over all work equipment, requiring it to be suitable, maintained and, where risk demands, inspected. Power presses have specific examination duties.
- PSSR 2000 — the Pressure Systems Safety Regulations 2000 require a written scheme of examination for pressure systems — boilers, compressors, air receivers, steam plant.
- COSHH 2002 (LEV) — local exhaust ventilation systems require thorough examination and testing, typically at least every 14 months.
- Electricity at Work Regulations 1989 — fixed wiring requires periodic inspection and testing (the EICR).
Where equipment both lifts and does something else, LOLER and PUWER can both apply; when in doubt, the more specific LOLER duties take precedence. The HSE opened a Call for Evidence on LOLER in October 2025 (closed November 2025), with outcomes expected during 2026 — so it is worth keeping an eye on any change to inspection requirements.
What is a thorough examination, and how often is it needed?
A thorough examination is a formal, independent assessment of whether equipment is safe to continue in service — not a visual once-over and not a service visit. It results in a written legal record. The standard frequencies are:
- Every 6 months — lifting equipment used to lift people, and any lifting accessories.
- Every 12 months — other lifting equipment.
- To a written scheme — pressure systems under PSSR, with the interval set by the competent person.
- Or per an examination scheme — where a competent person has drawn one up, it can vary the default intervals.
New equipment generally still needs examination unless it carries a declaration of conformity issued within the last 12 months. If an examination reveals a defect presenting a serious, imminent risk, the competent person must notify both you and the enforcing authority (usually the HSE) — so a failed examination is not a private matter you can quietly fix.
Who counts as a competent person?
This is the rule businesses most often get wrong. A competent person has the practical and theoretical knowledge and experience to examine the specific equipment — and, crucially, must be sufficiently independent and impartial. Your own maintenance engineer who services a crane cannot also be the competent person who examines it, because they cannot impartially judge their own work. In practice the competent person is usually a UKAS-accredited inspection body working to ISO 17020 — which is exactly what an insurer's engineering inspection service provides.
From recent placement conversations
"The assumption I unpick most often is 'our maintenance company looks after all that.' Maintenance and statutory examination are two different jobs, and the law deliberately won't let the same person do both. A business can have a spotless service record and still be in breach because no independent thorough examination was ever done."
"The second gap is timing. The examination report has an expiry date, and equipment used past it is unexamined in the eyes of the law. After any incident, the first document an HSE inspector or a loss adjuster asks for is the in-date report — and if it isn't there, the conversation changes completely."
What does machinery breakdown cover, and what does it exclude?
Machinery breakdown (the engineering section) responds to sudden, accidental internal failure — mechanical or electrical — of insured plant. It is the cover that pays when a motor burns out, a gearbox seizes or a control system fails without warning. Typical inclusions and exclusions:
- Covered: sudden mechanical and electrical breakdown; resultant damage to surrounding property; deterioration of stock following breakdown; increased cost of working and loss of income via a machinery business interruption section.
- Usually excluded: wear and tear and gradual deterioration; the cost of remedying the original defect (resultant damage may still be covered); external perils like fire, theft and flood (those sit under property/plant cover); damage from using equipment outside manufacturer limits — for example lifting beyond the safe working load.
Hired-in plant usually needs its breakdown exposure specifically declared, and high-value or complex plant may require an engineering survey and evidence of maintenance and statutory inspections before cover is offered.
Which equipment in your business needs statutory inspection?
Select your business type to see the equipment that typically needs thorough examination and the regime that applies. A starting point only — your competent person sets the definitive scheme.
Manufacturer / factory
Warehouse / logistics
Garage / MOT centre
Construction site
Care home / leisure
Office / commercial property
Is your statutory inspection compliance in order?
Tick each statement that's true of your business. Unticked items are where compliance — and cover — usually slips.
How exposed are you to an inspection failure right now?
A quick two-factor gauge of statutory inspection exposure. Indicative only.
Who is the duty holder, and what happens if you don't comply?
Statutory inspection duties fall on the duty holder — the person or business in control of the equipment. For most companies that is the employer who owns or operates the plant, but it can also be a landlord responsible for a building's lifts, or a contractor in control of hired equipment on site. You cannot contract the duty away: appointing a maintenance firm or an inspection body does not transfer legal responsibility, it only helps you discharge it.
The duties are enforced by the Health and Safety Executive (HSE), or by local authorities for some premises. An inspector who finds a problem has two principal tools. An improvement notice requires you to put a contravention right within a stated period. A prohibition notice is more serious: it orders you to stop using the equipment immediately, before anyone is hurt, and stays in force until the risk is removed — which for a single critical machine can halt production overnight.
Where a breach is prosecuted, the penalties are substantial. Since the 2016 sentencing guideline, fines for health and safety offences are unlimited and scaled to the organisation's turnover, so a serious failure at a mid-sized business can reach six figures even where no one was injured. Individuals — including directors — can face fines and, in the gravest cases, imprisonment. There is a separate cost too: a documented regulatory breach can complicate or reduce an employers' and public liability claim arising from the same incident.
How does an inspection failure feed into a liability claim?
This is where a missed examination becomes genuinely expensive, because one equipment failure rarely produces just one claim. A forklift, a lift or a pressure vessel that fails can injure an employee, injure a visitor, damage property and breach regulations all at once — and each of those triggers a different response, often against the same business at the same time.
The result is a compounding exposure that a single policy section never captures on its own:
- Employers' liability — an injured employee brings a claim, and the absence of an in-date thorough examination is powerful evidence of negligence.
- Public liability — an injured customer, visitor or member of the public claims separately under your business liability cover.
- HSE prosecution — the regulator pursues the breach itself, with fines scaled to turnover and, potentially, action against individuals.
- Director exposure — where personal failures in oversight are alleged, the spotlight can fall on individuals, which is precisely the territory directors' & officers insurance is built for.
What drives the cost of engineering inspection cover?
Engineering inspection and machinery breakdown cover is priced on the equipment itself — what it is, how old it is, how it's looked after and how much income depends on it. The factors below move the premium, and most can be influenced before renewal.
| Rating factor | Why it affects premium | How to improve it |
|---|---|---|
| Number and type of plant | Each item in scope adds examination work and breakdown exposure; complex plant costs more. | Keep an accurate asset list; decommission and remove redundant equipment formally. |
| Equipment age and condition | Older plant fails more often and is harder to source parts for. | Evidence overhauls, refurbishment and a planned replacement programme. |
| Trade / sector | Heavy manufacturing, food, foundry and process plant carry higher breakdown frequency. | Document sector-specific resilience and redundancy in critical plant. |
| Examination history | A clean, in-date record of thorough examinations reassures underwriters. | Keep every statutory report current and on file; never let one lapse. |
| Independence of inspection | Cover assumes a competent, independent examiner — not a maintenance firm marking its own work. | Use a UKAS-accredited inspection body or the insurer's engineer surveyors. |
| Machinery breakdown sum insured | Higher plant values mean more at risk if cover is on a reinstatement basis. | Insure to current replacement cost, not historic book value. |
| Hired-in plant | Hired equipment carries breakdown and continuing-hire exposure that must be declared. | Declare hired plant and check the hire contract's indemnity terms. |
| Maintenance regime | A planned, recorded maintenance schedule reduces the chance of sudden failure. | Maintain a written PPM schedule and retain service records. |
| Claims history | Prior breakdown or liability losses signal recurring exposure. | Show remediation and root-cause fixes since past losses. |
| Sums insured adequacy | Under-set plant and BI values trigger the average clause at claim — see underinsurance & the condition of average. | Review values annually against replacement cost and recovery time. |
| Quality of presentation | A clear submission with current reports and an accurate asset list earns better terms. | Use a specialist broker to present the risk fully under the Insurance Act 2015. |
Illustrative case studies: what do machinery and inspection claims look like?
Illustrative composite based on the types of claims seen in this sector. Names and details are not those of a real business.
Three illustrative composite cases show how the presence — or absence — of an in-date thorough examination decides the outcome.
How do you handle a machinery breakdown claim?
If a critical machine fails, the steps below give the best chance of a full, fast settlement:
- Make the equipment safe and stop using it. Isolate and shut down the failed plant immediately — running damaged equipment risks injury, worsens the loss and can prejudice the claim.
- Notify your broker and insurer. Report the breakdown straight away; engineering claims often need an engineer surveyor to attend, so early notification speeds inspection and authorisation.
- Preserve the failed parts and the scene. Don't scrap or repair the failed components before the insurer has seen them — the cause of failure decides whether the claim is covered, and the parts are the evidence.
- Produce your inspection and maintenance records. Gather the in-date thorough examination report and the maintenance log; they prove the plant was compliant and maintained, which is central to acceptance.
- Let the engineer surveyor assess the cause. The surveyor establishes whether the failure was sudden and accidental (covered) or wear and tear (excluded). Cooperate fully and share the technical history.
- Quantify the full loss. Capture the repair or replacement cost, resultant damage to surrounding property, spoiled stock and any lost income under the machinery business interruption section.
- Arrange repair or replacement once authorised. Proceed only when the insurer confirms cover and scope; keep all invoices and document any temporary measures taken to keep trading.
- Re-examine before return to service. Repaired or replaced lifting and pressure plant must pass a fresh thorough examination before it goes back into use, restarting the statutory cycle.
John has 13+ years' specialist commercial insurance experience, including arranging engineering inspection and machinery breakdown cover for manufacturers, food producers, engineering firms and property owners with lifting and pressure plant. A former #1 Account Executive at Brown & Brown and #1 Salesperson at AXA, he has direct access to the Lloyd's market and specialist engineering schemes, and structures inspection programmes so statutory duties are met and plant claims pay in full. More about John.
Engineering inspection glossary
- Thorough examination
- The detailed, systematic statutory examination of lifting equipment, pressure systems or other plant by a competent person, ending in a written report.
- Competent person
- Someone with the knowledge and experience to examine the equipment, who is sufficiently independent and impartial — usually a UKAS-accredited inspection body.
- LOLER 1998
- The Lifting Operations and Lifting Equipment Regulations 1998, which require thorough examination of cranes, hoists, lifts, forklifts and lifting accessories.
- PUWER 1998
- The Provision and Use of Work Equipment Regulations 1998, requiring all work equipment to be suitable, maintained and, where needed, inspected.
- PSSR 2000
- The Pressure Systems Safety Regulations 2000, which require a written scheme of examination for pressure systems such as boilers and compressors.
- Written scheme of examination
- A document, drawn up by a competent person, specifying which parts of a pressure system are examined, how and how often.
- Lifting equipment
- Any work equipment for lifting or lowering loads, including the attachments used to anchor, fix or support it.
- Lifting accessory
- Equipment connecting a load to lifting machinery — slings, chains, hooks, eyebolts — examined every six months under LOLER.
- Safe working load (SWL)
- The maximum load equipment is certified to lift. Operating beyond it breaches duties and typically voids machinery cover for resulting damage.
- Machinery breakdown
- Engineering cover for sudden, accidental internal failure — mechanical or electrical — of insured plant, and the damage that flows from it.
- Engineer surveyor
- The qualified engineer who carries out thorough examinations and assesses the cause of a machinery breakdown claim.
- Resultant damage
- Damage to surrounding property or other plant caused by a machinery breakdown, usually covered even where the original defect is not.
- Improvement notice
- An HSE notice requiring a contravention to be put right within a stated period.
- Prohibition notice
- An HSE notice ordering the immediate stop of an activity or use of equipment that carries a risk of serious personal injury.
- Duty holder
- The person or business in control of the equipment, who carries the legal responsibility for statutory examination and cannot contract it away.
Engineering inspection insurance: frequently asked questions
Is engineering inspection a legal requirement?
The thorough examination is. LOLER, PUWER and PSSR require lifting equipment, work equipment and pressure systems to be examined by a competent person at set intervals — that duty is legal, not optional. The insurance that delivers the examination and adds machinery breakdown cover is not itself compulsory, but it is how most businesses meet the duty efficiently.
What's the difference between engineering inspection and machinery breakdown cover?
Engineering inspection is the statutory examination service — the qualified engineer who examines your plant and issues the legal report. Machinery breakdown is the insurance that pays when plant suddenly fails. They are usually sold together, but they answer different needs: one keeps you compliant, the other protects the asset and your income.
How often does lifting equipment need a thorough examination?
Under LOLER, equipment that lifts people and any lifting accessories must be examined every six months; other lifting equipment every twelve months. Those are the defaults — a competent person can set different intervals through a written examination scheme if the risk justifies it.
Can my own maintenance engineer do the thorough examination?
No. The competent person must be sufficiently independent and impartial, so someone who services the equipment cannot also be the one who examines their own work. This is the rule businesses most often get wrong — a perfect service record is not a substitute for an independent thorough examination.
Does my insurer have to provide the inspection service?
No — you can use any UKAS-accredited inspection body. But buying the examination service through your insurer is convenient, because the engineer surveyors who inspect your plant also inform the breakdown cover, and scheduling, reports and renewals sit in one place.
What happens if my equipment's examination has lapsed?
Equipment used past its examination date is unexamined in the eyes of the law. After any incident the first document an HSE inspector or loss adjuster asks for is the in-date report — and if it isn't there, you face both a likely regulatory breach and a much harder claim. Catch lapses before an incident does.
Does machinery breakdown cover wear and tear?
No. Machinery breakdown responds to sudden and accidental internal failure, not gradual wear, corrosion or deterioration. The resulting damage to surrounding plant may still be covered even when the original worn part is not — but a failure caused purely by ordinary wear and tear falls outside the cover.
What is a written scheme of examination?
Under PSSR, pressure systems must be examined to a written scheme drawn up by a competent person. The scheme specifies which parts are examined, by what method and how often. You must not operate the system until the scheme is in place and the examinations are up to date.
Who is the duty holder for statutory inspection?
The duty holder is the person or business in control of the equipment — usually the employer who owns or operates it, sometimes a landlord or a contractor controlling hired plant. Appointing a maintenance firm or inspection body helps you discharge the duty but does not transfer the legal responsibility.
What does engineering inspection insurance cost?
It depends on the number, type, age and value of your plant, your examination and maintenance history, and how much income depends on the equipment. There's no flat figure — but the examination element is modest relative to the cost of a prohibition notice, a turnover-scaled fine or an uninsured breakdown, so the real question is whether the programme is complete, not whether it's cheapest.
Is a passenger lift covered by LOLER or PSSR?
A passenger or goods lift is lifting equipment under LOLER, so as equipment that lifts people it needs a thorough examination every six months. Some associated components may engage other regimes, but the core duty is LOLER — an interval offices, hotels and care homes frequently overlook.
Why use a specialist broker for engineering inspection cover?
Because the gaps are easy to miss and expensive to find at claim — an overlooked asset, a lapsed report, a maintenance firm mistaken for an independent examiner. A specialist matches the examination programme to your full asset list, sets machinery and BI values correctly, and presents the risk so cover responds. Miller & Partner approaches every placement through The Insurability Framework — underwriter intelligence, difficult-risk expertise, risk assessment and claims advocacy. See our commercial insurance page.
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