Brakes, Airbags, and Parts the Whole Vehicle Rides On.
Protecting OEM and aftermarket component makers
Auto parts manufacturers supply the components that vehicles are built from — OEM and aftermarket, from fasteners to brakes, steering, airbags, and fuel systems — and their defining risk is product liability on safety-critical parts. When a part that controls stopping, steering, or crash protection fails, the result is a crash, and the injury and wrongful-death claims that follow are catastrophic. Riding alongside is recall exposure on a scale few industries face: a NHTSA campaign can reach millions of vehicles, and OEM supply contracts routinely push that recall and warranty cost down onto the supplier. This is a specialized corner of manufacturing insurance built for how parts makers actually get sued and pursued.
Properly structured coverage protects the company, its plant, and the vehicles its parts ride in.
The Auto Parts Manufacturer's Signature Exposures
Product liability on safety-critical components is the dominant exposure — a brake, steering, airbag, or fuel-system part that fails can directly cause a crash, and those claims carry the highest severity in the product world, with multi-plaintiff and wrongful-death litigation the realistic worst case. Recall exposure is the twin peril: NHTSA can mandate a recall across an enormous vehicle population, and automotive recall expense and campaign management are costs that dwarf most product lines. What makes auto-parts risk distinct is contractual risk-transfer — OEM and tier-1 supply agreements frequently obligate the supplier to indemnify the automaker and absorb recall, warranty, and PPAP-related costs, so the contract can matter as much as the defect. Heavy stamping, molding, and assembly machinery drives amputation and crush injuries, and parts installed in vehicles sold globally create export and foreign-jurisdiction exposure.
Key Risks in Auto Parts Manufacturing
Auto parts manufacturers face exposure related to:
A safety-critical part fails and causes a crash, injury, or death
A massive NHTSA recall campaign across a large vehicle population
OEM supply contracts pushing recall and warranty costs onto the supplier
Stamping and molding machinery amputation and crush injuries
Parts installed in vehicles sold globally creating export exposure
Tier-1 and tier-2 contractual indemnity obligations
Warranty, PPAP, and production-part approval obligations
The safety-critical part failure and the NHTSA recall are what most define the company.
Core Coverages for Auto Parts Manufacturers
A properly built auto-parts program typically includes:
Product Liability & Completed Operations — Covers components that fail in service and cause crash injury, written at high limits because safety-critical parts carry the worst severity.
Product Recall — Responds to recall campaigns including automotive recall expense, notification, and replacement across the vehicle population.
Commercial Property — Covers the building, stamping and molding equipment, tooling, and inventory.
Equipment Breakdown — Repairs or replaces presses, molding machines, and robotics after sudden mechanical or electrical failure.
General Liability — Covers premises and ongoing operations exposure at the plant.
Commercial Auto — Covers the company's vehicles and the transit of parts to assembly plants and distributors.
Workers' Compensation — Provides legally required coverage for amputation, crush, and line-injury exposure — typically a major line in a heavy-machinery plant.
Umbrella / Excess Liability — Adds the high excess limits that safety-critical severity and recall exposure demand.
What's Commonly Overlooked
Auto-parts programs are most often weakened by:
Product-liability and excess limits too low for safety-critical crash claims
OEM and tier-1 contracts assuming recall and indemnity obligations never reviewed against the policy
Recall limits inadequate for a NHTSA campaign across millions of vehicles
No equipment-breakdown coverage for presses, molders, and robotics
Export and foreign-jurisdiction exposure for parts in globally sold vehicles
The gap that hurts most is inadequate product-liability and recall limits against OEM contracts that transfer the cost downstream.
Real-World Claim Examples
A brake, steering, or airbag component fails and causes a crash with serious injury
NHTSA mandates a recall and the supplier absorbs campaign and replacement costs
An OEM invokes an indemnity clause and pushes defect liability onto the supplier
A stamping press amputation occurs during a die change without lockout
A part installed in vehicles sold abroad triggers foreign litigation
Any one of these can be catastrophic, and a safety-critical crash or OEM-driven recall claim can reach well into eight figures.
Regulatory & Safety Context
Auto parts makers operate under NHTSA, which sets the Federal Motor Vehicle Safety Standards (FMVSS), administers recalls, and enforces early-warning and defect reporting under the TREAD Act. The industry quality system is IATF 16949, and OEM supply relationships run on PPAP (Production Part Approval Process) submissions that document that a part meets specification before volume production. DOT rules govern transport of finished parts. Underwriters expect this framework in place, and OEM contract terms — not just the quality system — are central to how the risk is evaluated.
Why Proper Placement Matters
Underwriters weigh revenue, part type and criticality — safety-critical brake, steering, airbag, and fuel-system parts rate hardest, non-critical trim and fasteners far easier — OEM versus aftermarket channel, export exposure, IATF 16949 certification, machinery and guarding, and loss history, and they pay close attention to the OEM and tier contracts that transfer recall and indemnity risk. Safety-critical auto parts are generally an E&S class, where carriers can tailor high limits and recall terms, and reviewing the supply contracts is essential before binding so the coverage matches what the supplier has actually agreed to absorb. Presenting the part criticality, the contracts, and the quality system clearly is what drives appetite and price.
Our Approach
At Cory Washington & Co., we insure parts makers around safety-critical liability, recall, and OEM contract risk. We size product-liability and excess limits to part criticality, structure recall for automotive campaign costs, review the OEM and tier agreements that transfer liability downstream, and coordinate property, equipment breakdown, and workers' compensation around the plant's heavy machinery. We also insure related manufacturers, including metal fabrication and plastics manufacturing, and structure standalone product liability and product recall and contamination coverage, within the broader manufacturing category.
When your part controls whether a vehicle stops, steers, or protects, product-liability, recall, and contract coverage are everything — we build them to the severity of the part and the terms of the contract.
All insurance descriptions on this website are provided by Cory Washington & Co. LLC strictly for general informational purposes. They are not intended to be, and should not be relied upon as, legal, financial, or insurance advice. The information presented is general in nature and does not guarantee the availability, terms, conditions, or scope of any insurance coverage. Actual coverage is determined solely by the specific policy language issued by the insurer and remains subject to underwriting approval. Nothing on this website creates or implies an agent-client relationship, binds coverage, or alters any existing policy. Cory Washington & Co. LLC expressly disclaims any liability for actions taken, or not taken, based on the content provided here. For advice regarding your particular situation, please consult directly with a licensed insurance professional at Cory Washington & Co. LLC or another qualified insurance professional, and always review your policy documents in full.
See the coverages an auto parts manufacturing business may carry — core, prevalent, and situational — plus the gap most often missed, in the Auto Parts Manufacturing Coverage Checklist.
Complete the Auto Parts Manufacturing Supplemental online in a few guided steps, download the fillable PDF, or browse all applications.
Frequently Asked Questions
How do I get auto parts manufacturing insurance through Cory Washington & Co.?
Request a quote or contact our team. We start with a short conversation about your operations, analyze your exposures, then negotiate auto parts manufacturing insurance across multiple carriers that compete for your account and present options with the trade-offs explained. Cory Washington & Co. LLC is licensed in all 50 states.
How much does auto parts manufacturing insurance cost?
It depends on your exposure. Auto parts manufacturing insurance is priced on factors like your industry, size, prior claims, and the limits and deductibles you select — so two businesses rarely pay the same. We shop your account across competing carriers and present the trade-offs in plain English.
Who needs auto parts manufacturing insurance?
It depends on your situation. Some coverage is required by law; more often, auto parts manufacturing insurance is required by a contract, lease, lender, or client before they will do business with you — and even when it is not mandated, it guards against exposures that can be severe. We review your operations and obligations and tell you plainly what you need and why.
What if another agency has already declined or non-renewed my coverage?
Difficult, specialty, and previously-declined placements are a core part of our work. We access excess & surplus (E&S) and specialty markets that many generalist agencies cannot, and we explain the trade-offs clearly so you can decide with confidence.
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