Thanks Eddy, I think most of the encoders are incremental and some sort of homing is needed. As I understand, in the switch based homing, when the switch is triggered the encoder goes to Z which is one pulse per revolution. If one rev. =1.5mm movement, I assume that a switch repeatability of less than 0.75mm will do the job.

On my stepper based CNC the limit switches are wired in series with the e-stop and cuts the power to both spindle and steppers, not the electronics and triggers in mach3 an e-stop to pause the g-code. But with servos if both the drives and the controller have an e-stop input, which means double protection, is there any need to cut the power?