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BUSINESS INTERRUPTION INSURANCE THAT KEEPS ALUMINIUM MANUFACTURERS FINANCIALLY RESILIENT
Why Business Interruption Cover Matters in Aluminium Manufacturing
Aluminium manufacturing is capital intensive and time sensitive. If your melting furnace, extrusion press, CNC cell, paint line, anodising line, compressor plant or extraction system fails — or if a fire, flood or major incident damages your site — the immediate repair bill is only part of the problem.
The bigger risk is lost income: delayed customer deliveries, missed slots, cancelled orders, contract penalties, overtime costs, expedited freight, subcontracting, and the cashflow squeeze that follows when output drops but fixed costs keep running.
Business Interruption & Loss of Income Insurance is designed to protect your profitability and cashflow after an insured event disrupts your operations, helping you survive and recover faster.
What Does Business Interruption & Loss of Income Insurance Cover?
Business Interruption (BI) insurance typically sits alongside your property and/or machinery breakdown policy. It is triggered following insured damage (such as fire or flood) — and in some cases, by insured breakdown — and it can replace lost profit while also covering extra costs you incur to keep trading.
The aim is simple: protect your business during recovery so you can keep paying wages, meet obligations, and retain customers.
- Loss of Gross Profit / Revenue — replacement of lost trading profit after an insured event disrupts production.
- Increased Cost of Working (ICOW) — overtime, temporary labour, subcontracting, alternative premises and expedited freight to reduce loss.
- Wages & salaries protection — subject to basis of settlement and policy terms.
- Claims preparation costs — accountants and specialists to quantify the BI loss (policy dependent).
- Supplier / Customer Dependency — optional cover where you rely on key suppliers or customers (contingent BI).
- Denial of Access — where access to your site is prevented due to an insured event nearby (policy dependent).
- Utilities interruption — loss following failure of power, gas or water supply (extensions vary).
- Engineering / machinery breakdown BI — optional cover for loss following insured plant failure.
Common Business Interruption Scenarios in Aluminium Manufacturing
Aluminium businesses face specific “choke points” that can stop production quickly. BI insurance is most effective when it’s built around how your site actually operates — and how quickly you can restore capacity after a loss.
- Fire in extraction / ducting — smoke damage and shutdown of furnaces or welding bays while systems are repaired and inspected.
- Flood or water ingress — damage to electrics, CNC controls, compressors and stored stock, causing extended downtime.
- Machinery breakdown — extrusion press failure, furnace breakdown, CNC spindle failure, chiller failure or robot cell outage.
- Power supply issues — surge damage to controls, downtime while waiting for specialists and replacement parts.
- Major stock loss — destruction of high-value aluminium billets, castings or finished parts, leading to missed deliveries and rework.
- Supplier disruption — key alloy, billet or chemical supplier suffers a loss, leaving you unable to meet orders.
- Customer site incident — an OEM shuts down and halts your call-offs, impacting revenue and planning (dependent extensions may apply).
- Denial of access — emergency services cordon restricts site entry after nearby fire or incident.
Setting Business Interruption Correctly: The Big 3
BI claims often become contentious not because a loss isn’t covered, but because the policy wasn’t set up to reflect the real time and cost of recovery. Three settings matter most:
1) Indemnity Period
This is how long the policy will pay for loss following an interruption. Many manufacturers choose 12 months by default, but aluminium operations with long lead times, bespoke tooling, or specialist plant may require 18, 24 or even 36 months — particularly where replacement machinery, installation and commissioning can take time.
2) Sum Insured / Gross Profit Basis
Your declared gross profit (or revenue-based sum insured) must reflect true exposure, including expected growth. Under-insurance can reduce claim payments. A robust basis of settlement aligned to your accounts is crucial.
3) Increased Cost of Working (ICOW)
Manufacturers often spend heavily to keep production moving: subcontract machining, hire temporary equipment, pay overtime, or ship parts by air. ICOW cover can fund these measures, but it needs to be adequate and properly structured.
What Insurers Need to Quote Business Interruption for Aluminium Manufacturers
A strong risk presentation helps you access better cover and pricing. For BI, underwriters typically want to understand your production bottlenecks, dependence on key plant, and how quickly you can outsource or restart after a loss.
Key information to prepare
- Turnover and gross profit — plus expected growth over the policy period.
- Process overview — casting, extrusion, machining, finishing, assembly and testing.
- Critical machinery list — furnaces, presses, CNCs, robots, compressors, extraction, treatment lines.
- Maintenance regime — planned preventative maintenance, inspections, service contracts and spares strategy.
- Fire protections — detection, alarm monitoring, sprinklers, separation, housekeeping, hot works controls.
- Contingency plans — alternative suppliers, subcontractors, spare capacity and recovery plans.
- Customer concentration — reliance on one or two major customers and contract requirements.
- Utilities resilience — backup arrangements for power, compressed air, cooling and water where relevant.
How to Get a Business Interruption Quote
- 1. Describe your operation — what you make, key processes, markets and typical order lead times.
- 2. Identify critical bottlenecks — single points of failure such as a main furnace, press or specialist machine.
- 3. Choose an indemnity period — based on realistic worst-case recovery times.
- 4. Confirm sums insured — gross profit / revenue and extra cost of working limits.
- 5. Bind and document — receive policy wording and insurance certificate where needed.
“The fire wasn’t the biggest cost — it was the downtime. BI cover kept wages paid and funded subcontracting so we could keep customers supplied.”
Managing Director, UK Aluminium ManufacturerPROTECT YOUR BUSINESS
- Replace lost profit and protect cashflow after an insured interruption
- Cover extra costs like overtime, subcontracting and alternative premises
- Set indemnity periods aligned to realistic recovery times
- Optional cover for supplier dependency and utilities interruption (policy dependent)
- Specialist advice for aluminium manufacturing bottlenecks and plant risks
FREQUENTLY ASKED QUESTIONS
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What is business interruption insurance for an aluminium manufacturer?
Business interruption insurance helps replace lost profit or income after an insured event disrupts your operations. It can also cover extra costs you incur to keep trading, such as subcontracting, overtime and expedited freight, subject to policy terms.
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What triggers a business interruption claim?
BI usually triggers following insured damage under your property policy (e.g., fire, flood, storm). Some policies can also extend to machinery breakdown BI or other triggers, depending on the wording you select.
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How long should our indemnity period be?
It depends on realistic worst-case recovery times. Many manufacturers choose 12 months, but aluminium operations with specialist plant, long lead times and commissioning periods may require 18, 24 or 36 months to fully recover revenue.
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Does BI cover subcontracting and overtime?
Often, yes — this falls under Increased Cost of Working. The aim is to reduce your loss by funding reasonable additional expenditure, subject to policy limits and the requirement that the spend is economically justified.
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What is contingent business interruption?
Contingent BI (also called supplier/customer dependency) can provide cover if a key supplier or customer suffers an insured event that prevents them from supplying you or accepting your output, subject to policy terms and underwriting.
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Does BI cover contract penalties for late delivery?
Contract penalties are usually not covered as a standalone item. However, BI can cover the loss of gross profit resulting from an insured interruption, and Increased Cost of Working can fund measures to reduce delay. It’s important to review contracts and structure cover appropriately.
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What’s the most common BI mistake manufacturers make?
Underestimating recovery time and underinsuring gross profit are the most common issues. Another frequent gap is not insuring key bottlenecks properly (e.g., assuming property BI covers machinery breakdown downtime when it may not).
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How quickly can Insure24 arrange business interruption cover?
Many manufacturers can receive indicative terms quickly where sums insured and operations are clear. Complex sites and high-value plant may require deeper underwriting, but we’ll progress cover efficiently once key information is provided.