Thank you for your concern. I wish I could share my cad here but I am afraid I am not allowed to do that as the content is confidential. But let me take you through the steps I followed:
1. I checked for interference in the model and found there are no intereferences other than few coincidences.
2. I applied a bonded component contact between 2 parts of my assembly as it is a metal insert in a plastic(compatible mesh option was checked while doing this)
3. I defined contact sets between other faces in the assembly as no penetration and bonded where ever applicable.
4. As the minimum radius of curvature calculated by me in whole assembly was 0.34mm, I decided to apply a curvature based mesh with minimum element size as 0.17mm, maximum as 10mm and meshed the model which was successful.
5. Now when I finally define the setup and run the model the error message which I previously posted pops up.
Can you please point out where I could have possibly gone wrong in my modelling and also I would be very happy if you can suggest me a better modelling approach.
Thanks for your valuable time and effort
Let's focus on step number 4. Change your mesh resolution. Apply mesh controls to the regions of interest as well as contact locations (specially no penetration ones). Last point, trust the curvature based mesh the most! use others only as the last point of hope.