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What insurance should a custom gear supplier have?

When selecting a custom gear supplier, you should verify that they carry adequate liability insurance and product liability coverage. A reputable shop will typically hold General Liability Insurance covering bodily injury and property damage on their premises, as well as Product Liability Insurance (also called “completed operations” coverage) that protects you if their gear fails and causes damage to your equipment, property, or personnel. Minimum recommended product liability coverage for industrial components is often $1–2 million per occurrence, though aerospace and defense applications may require $5 million or more. Additionally, many custom gear shops carry Errors & Omissions (E&O) insurance to cover design errors, material mis-specification, or manufacturing mistakes. You should also ask about their sub-supplier insurance—if they outsource heat treatment, grinding, or coating to third parties, those vendors must carry their own liability policies. Importantly, review the limitation of liability clause in their terms and conditions. Many shops limit their liability to the invoice value of the gear itself, meaning they will not cover consequential damages (e.g., production downtime, lost revenue, or damage to mating components). For mission-critical applications, negotiate to remove or raise this cap, or consider purchasing separate business interruption insurance on your side.