FOUNDRIES–FERROUS
SIC CODE: All codes starting with 332
NAICS CODE: 331511 Iron Foundries
Description of operations: Foundry or casting operations make castings by pouring molten metal into molds and letting it solidify. Ferrous foundries handle iron, steel, and iron-based alloys. The process begins with raw pig iron bricks melted in a furnace at temperatures up to 3000 degrees. Depending on the type of furnace, the fuel source may be coke, electricity, natural gas, or propane. The molten iron or steel may be refined to remove impurities such as hydrogen gases, or have other ingredients added to produce alloys. This mixture is poured into molds covered with wax or refractory slurry, a paste of fine sand, clay, or similar material. Once cooled, the casting is removed from the mold and finished by deburring, grinding, sand blasting, and often some type of heat treating or tempering. The castings may be painted to prevent corrosion. The molds are cleaned to remove any residue before being reused. Some products are made from a single mold, while others are made from two molds joined by soldering or welding. All along the way, testing and monitoring must be conducted to ascertain quality and purity of casting. Products include cast iron pipe, cast iron skillets, engine blocks, and many other products.
Property exposures consist of office, production plant, and warehouse operations or yard to store raw materials and finished goods. Ignition sources include heat from the foundry, production machinery, electrical panels, and sparks from grinding or welding operations. The furnaces and crucibles for a foundry are constantly burning. If the fire escapes from the designated area, damage can be extensive. Molten metal can leak or spill, and wax for product patterns can melt. Welding and refueling of forklifts should be done in a well-ventilated area away from combustibles. Flammable lubricants, fuels, and other chemicals should be stored away from other operations in approved containers. The types of metals used in producing alloys may contribute to fire load and cause an explosion. Wet metals placed in the furnace can generate steam and explode. Unless there are dust collection systems and adequate ventilation, dust from the cutting and sanding operations can cause fire and explosion. The stock itself is not usually susceptible to fire or water damage and is not a target item for theft. Fire suppression systems are difficult to design for these operations. Business income and extra expense exposure are high due to a lack of backup facilities. A large loss can result in a lengthy downtime to restore operations.
Equipment breakdown exposures include malfunctioning production equipment, ventilation systems, electrical control panels, and other apparatus. A lengthy breakdown to production machinery could result in a severe loss, both direct and under time element.
Inland marine exposures include accounts receivable if the foundry offers credit, computers (which may include computer-run production equipment), contractors’ equipment, goods in transit, and valuable papers and records for product designs and customers' and suppliers' information. Backup copies of all records should be made and stored off premises. Contractors’ equipment, which is used to transport raw materials to the furnace, may be stored in the open, and susceptible to damage by weather-related causes of loss or vandals. Stock in transit is not highly susceptible to damage, but some may be oversized and subject to collision or overturn unless properly loaded, tied down, and unloaded. Some castings may be brittle and break due to heating (fire) and sudden cooling (water).
Crime exposures are chiefly from employee dishonesty. Employees may act alone or in collusion with outsiders in stealing money, raw materials, or finished stock. Background checks should be conducted on all employees. There must be a separation of duties between persons handling deposits and disbursements and reconciling bank statements.
