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OEM & CONTRACT ALUMINIUM MANUFACTURING INSURANCE BUILT FOR SUPPLY CHAINS
Insurance for OEM Suppliers, Contract Manufacturers & Tier Supply
OEM and contract aluminium manufacturing is different from “general manufacturing”. Your risk sits inside other people’s products, projects and delivery schedules. You may be producing aluminium components, assemblies, sheet/coil conversions, machined parts, extrusions, castings, fabricated frames, housings, brackets, heat sinks, architectural components, packaging materials or bespoke aluminium sub-assemblies for customers who expect consistent quality, traceability and on-time delivery.
When you supply into OEM, Tier 1 / Tier 2 or framework environments, the consequences of a loss can travel fast: missed delivery windows, line stoppages at the customer, chargebacks, expedited freight, rework costs, and disputes about responsibility. Traditional “off-the-shelf” policies often don’t reflect how these contracts work, which is why Insure24 structures OEM & contract aluminium manufacturing insurance around the realities of supply-chain manufacturing: quality control, contractual liability, recall exposure, dependency on key machines, and the operational technology that keeps automated production stable.
Whether you operate a dedicated OEM production cell, run contract conversion lines, supply aluminium components under private label arrangements, or manufacture to customer drawings/specifications, we help you present your risk clearly to underwriters and secure cover that is fit for purpose.
What Makes OEM & Contract Aluminium Manufacturing High-Risk?
OEM and contract environments amplify the impact of incidents. A minor defect can become a major dispute once parts are assembled into a finished product or installed on-site. A short production stoppage can trigger contractual penalties if your customer’s line is waiting for your components. And because you are one node in a chain, you may face multiple parties, multiple contracts and competing definitions of what “failure” looks like.
Underwriters will typically focus on: (1) quality systems and traceability, (2) your contractual terms (including limitation of liability clauses), (3) how defects are detected and contained, (4) how you manage changes to drawings/specifications, (5) how dependent you are on key machinery and utilities, and (6) the sectors you supply (automotive/aerospace/construction/electronics/packaging) and the criticality of your parts.
The right insurance programme supports confidence: it protects your balance sheet if something goes wrong, and it can also help you win work where customers require evidence of robust insurance limits and risk management.
- Contractual Exposure – Chargebacks, liquidated damages, and strict delivery KPIs (policy cover varies).
- Quality & Specification Risk – Incorrect alloy/temper, dimensional drift, surface finish failures, coating/anodising issues.
- Traceability & Batch Control – Coil/lot-level traceability, certification, material test reporting, retention periods.
- Customer Line-Stop Risk – Knock-on losses where your component causes a stoppage downstream.
- Change Control – Drawing revisions, engineering changes, process modifications, tooling updates.
- Supplier Dependency – Slabs/billets, coatings, fasteners, packaging, specialist treatments and outsourced processes.
Core Covers for OEM & Contract Aluminium Manufacturing
Most OEM and contract aluminium manufacturers need a combined insurance programme that protects: your site (buildings/stock/plant), your people (employers’ liability), your legal liability (public & products), and your trading continuity (business interruption). Where your contracts and sectors demand it, we can also explore specialist extensions for recall, cyber/OT, environmental exposures, and transit.
The key is alignment: policy wordings, limits and indemnity periods should match how your contracts are written and how your production and delivery really work. That’s where specialist broking makes the difference.
- Property & Fire – Buildings, production areas, tooling stores, racking, stock and ancillary areas.
- Plant, Tooling & Machinery – CNC, presses, rolling/conversion lines, furnaces, anodising/coating kit, test equipment.
- Machinery Breakdown – Sudden mechanical/electrical failure of critical kit causing downtime.
- Business Interruption – Loss of gross profit and increased cost of working after insured damage.
- Public & Products Liability – Third-party injury/property damage from your operations/products.
- Employers’ Liability – UK mandatory cover in most cases for employee injury/illness.
Products Liability, Defects & Downstream Consequences
In OEM supply, product liability is not just “nice to have”. If a defective aluminium component causes damage, injury or a failure in the end product, you can face expensive legal claims and complex investigations. Even where the immediate issue is minor (e.g., tolerance drift, incorrect coating thickness, mis-machined hole patterns, wrong temper/alloy, surface contamination), the downstream costs can be significant once parts are assembled, installed or shipped internationally.
Products liability typically responds to third-party injury or third-party property damage. It does not replace warranty, and it does not automatically cover pure “cost of replacing your own product”. That’s why we help you map your risk: what could happen if a defect escapes? What property damage scenarios are realistic? What sectors do you supply? What jurisdictions apply? What are your contract terms? Underwriters price this based on clarity and control.
If recall/withdrawal exposure is relevant, we can explore options. Recall cover availability depends heavily on sector, quality systems, traceability, and historic loss experience. We’ll tell you candidly what is realistic and how to present it.
- OEM/Tier supply: higher expectations on quality documentation and traceability
- Defects scenarios: alloy/temper mismatch, dimensional non-conformance, coating/anodising failures
- Surface contamination and corrosion issues leading to damage
- Tool wear and calibration drift creating repeat non-conformance
- Worldwide territories where you export or supply global OEMs
- Optional recall/withdrawal discussions (subject to underwriting)
Business Interruption for Contract Manufacturing
Contract manufacturers often run tight schedules, limited spare capacity and just-in-time dispatch. When a key machine fails or property damage interrupts production, the impact can be immediate: late deliveries, expedited freight, subcontracting costs, overtime, and potential loss of contracts.
Business interruption insurance protects your gross profit (or agreed basis) following insured damage. For OEM suppliers, you need BI that reflects long lead times for parts, tooling and specialist repairs, as well as realistic time to regain quality approval. In some environments, getting the line physically running is only half the job — you may also need validation runs, inspection sign-off and customer approval before shipments resume.
We help you select appropriate indemnity periods and ensure your sums insured reflect peak exposure, including seasonal demand, planned shutdowns and contract ramp-ups.
- Loss of gross profit following insured damage
- Increased cost of working: subcontracting, overtime, alternative processing
- Utility interruption extensions (where available/needed)
- Stock/WIP protection considerations for in-process batches
- Long lead time parts, tooling and re-qualification impacts
Contractual Liability, Indemnities & Insurance Requirements
OEM and framework contracts often include detailed insurance obligations: minimum liability limits, named insured requirements, waiver of subrogation requests, specific wording requirements, and sometimes “additional insured” clauses. These terms can create gaps if your policy doesn’t align, or if you agree to contractual obligations that your insurer won’t accept.
We help you review common contractual issues that drive insurance outcomes: limitations of liability, hold harmless clauses, consequential loss provisions, delivery penalties, acceptance criteria, and dispute resolution terms. While insurance cannot fix a poor contract, the right programme can significantly reduce the financial impact when something goes wrong.
If you supply into higher-criticality sectors (e.g., automotive, aerospace, rail, safety components), underwriters will also look closely at your approvals, quality certifications, inspection regimes and change control process.
- Minimum liability limits aligned to customer requirements
- Territory/jurisdiction clarity for global OEM supply
- Contractual liability: what’s assumed vs what’s insured
- Subcontractor controls and flow-down requirements
- Evidence of insurance: certificates and contract-ready schedules
Quality Systems, Traceability & Risk Presentation
Quality is one of the biggest underwriting levers in OEM and contract manufacturing. Insurers want to know how defects are prevented, detected and contained. For aluminium manufacturing, “quality” can include material certification, alloy/temper verification, dimensional inspection, surface finish measurement, coating thickness checks, corrosion testing, mechanical property testing, and control of outsourced processes.
Strong risk presentation helps you secure better terms. We’ll guide you on the information underwriters typically value: your inspection stages, scrap rates, customer complaint history, CAPA (corrective and preventive action) processes, calibration schedules, and how you segregate non-conforming product. If you hold recognised certifications (e.g., ISO-based quality/EMS/OH&S), we’ll highlight them appropriately.
Where appropriate, we can also help you think about practical improvements that reduce risk and may reduce premium: enhanced incoming inspection, better traceability, tighter change control, and improved protection of critical control systems and maintenance regimes.
- Traceability: lot/coil/batch marking and record retention
- Calibration controls for gauges, CMMs, thickness testers and metrology
- Change control for drawings, routings, tooling and process parameters
- Segregation and containment of non-conforming product
- Supplier management and outsourced process oversight
Our OEM customer increased liability limits and required contract-ready certificates. Insure24 arranged terms that matched the contract and helped us present our quality systems properly.
Managing Director, UK Aluminium Contract ManufacturerPROTECT YOUR BUSINESS
- Cover aligned to OEM and framework contractual requirements
- Protection against product liability and downstream damage claims
- Business interruption support when production is interrupted
- Machinery breakdown cover for critical CNC/press/line equipment
- Clear risk presentation to underwriters to secure competitive terms
Compliance & Regulations
OEM and contract aluminium manufacturers often need insurance to support regulatory duties and supply-chain expectations, including:
- Employers’ Liability (legal requirement in most UK cases)
- Health & safety controls, contractor management and safe systems of work
- Customer contractual insurance limits and certificate requirements
- Quality, traceability and inspection frameworks expected by OEMs
- Environmental controls for oils, chemicals and waste handling (where relevant)
FREQUENTLY ASKED QUESTIONS
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What is OEM & contract aluminium manufacturing insurance?
It’s an insurance programme designed for aluminium manufacturers who supply OEMs or work under contract/private label arrangements. It typically combines property, machinery breakdown, business interruption, employers’ liability and public/products liability, with optional extensions (where appropriate) for recall, transit, cyber/OT and environmental exposures.
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Do OEM contracts require specific liability limits?
Often, yes. OEM and framework agreements may specify minimum public/products liability limits, territories, and certificate wording. We help align policy limits and documentation to contract requirements and explain any constraints underwriters may impose.
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Does products liability cover warranty claims or replacing defective parts?
Products liability is mainly designed to cover legal liability for third-party bodily injury or third-party property damage caused by a defective product. It is not the same as warranty cover and does not automatically cover the cost of replacing your own product. We’ll help you understand the practical claim scenarios and structure cover appropriately.
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Can you include business interruption for machine failure?
Yes. Where selected, business interruption can be arranged to respond following insured damage, and may be structured alongside machinery breakdown to reflect downtime caused by sudden equipment failure. The right indemnity period matters for contract manufacturers because re-qualification and approval can extend recovery time.
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What information do insurers need to quote OEM & contract manufacturing risks?
Insurers typically want turnover split, key customer/sector information, contract requirements, claims history, sums insured for buildings/plant/stock, details of critical machinery, fire protections, quality systems and traceability controls, and how you manage changes to drawings/specifications and non-conforming product.
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Can you cover exports and global OEM customers?
Yes. We can arrange appropriate territories/jurisdictions for liability cover and consider transit exposures where relevant. If you supply into regulated supply chains, we’ll structure limits and policy details to match contractual requirements, subject to underwriting.