Industrial Fire Insurance

Industrial fire insurance is a type of general insurance policy in which the insurance provider agrees to cover the financial losses resulting from a fire accident for the insured business.

Such business insurance coverage is particularly crucial for SMEs due to their limited financial capacity and the high probability of significant losses due to fire.

Understanding the difference between industrial all-risk coverage and fire insurance coverage is crucial In the context of business insurance.
While industrial all-risk insurance covers a wide range of risks, including fire, accidental damage, burglary, business breakdown and business interruption, industrial fire insurance is specifically intended to cover fire-related damages.

However, it is important to note that the loss or damage to business assets due to a fire accident should have been caused by an actual fire as opposed to an intentional or wilful fire

Financial protection: Securing your Assets

In the event of a fire breakout, extensive damage can occur to business assets. Without an industrial fire insurance plan, the business organisation will have to manage the expenses for the reconstruction independently, potentially leading to financial inconsistency, disrupted operations and the possibility of bankruptcy.

Comprehensive Coverage: Repair and Replacement Assurance

An industrial fire insurance plan can cover for the repair and replacement costs for the movable and immovable properties, including plant and machinery, office buildings, furniture, stocks and fittings.

Ensuring Business Continuity: Swift Recovery

Industrial fire insurance plays a significant role in operational continuity by extending financial assistance to cover the costs of recovery, enabling the business organisation to resume its operations.

Building Trust: Instilling Confidence and Preserving Reputation

A fire breakout not only causes physical damage but also affects the visibility of the business organisation, creating a negative impact among the stakeholders. With industrial fire insurance, companies can recover from the losses swiftly, restoring confidence among investors and preserving the organisation’s reputation.

Fire accidents caused due to several reasons are covered under an industrial fire insurance plan. Some of the common reasons are listed as follows:

• Spontaneous combustion, fermentation or natural heating.

• Spontaneous fire due to forest fire or bushfire resulting from extreme weather conditions.

• Lightening, explosions or implosions.

• Landslides and missile testing operations of specified nature.

• Riots and strikes of a specified nature.

• Natural disasters such as earthquakes, cyclones, volcanic eruptions, etc.

• The exact coverage features can vary between insurance providers.

The type and extent of coverage can differ between insurers based on their policy conditions. Therefore, it is always important to read through the terms and conditions of the fire insurance policy to make valid claim requests later in an emergency.

Some of the common exclusions:

• Burning of business assets or premises by order of a Regulatory Authority.

• Landslides caused by defective designs.

• Leakage due to removal or extension of any sprinkler installation.

Careful Assessment

Assess the industrial premises to carefully examine the possible risks and the extent of damage to decide the sum insured.

Compare Policy Options

Compare the different policy options based on the features and benefits to decide on a suitable policy tailored to specific needs.

Understand Terms and Conditions

Read through the policy document to understand what is covered and not covered to evaluate whether the policy will serve the financial needs during a possible accident.

Determine Premium

Determine the applicable premium based on the sum insured and the coverage offered, check if it is affordable for the long term and make a wise decision. Business entities can focus on reducing the fire insurance premium by installing fire safety measures, conducting annual maintenance routines and avoiding unnecessary claims.

Inform the insurer

After informing the relevant authorities for the fire rescue, the first immediate step should be to inform the insurance provider.

Provide the necessary details

Take sufficient photographs and videos of the incident. Provide these and the additional supporting documents with the claim form.

Assist in Survey

The insurer will send a surveyor to investigate the incident and the damages to validate and approve the claim request

Fire accidents are the most impactful disasters for businesses. They can cause extensive damage to assets and lead to significant financial losses. Therefore, industrial fire insurance is imperative to cover these devastating financial impacts and ensure swift recovery and business continuity. By securing the business assets, the company also fosters confidence amongst the stakeholders, showcasing its commitment to long-term stability.

At Tata AIG, we offer a comprehensive solution with our fire and burglary insurance, which can cover the damages caused by fire accidents and burglary events.

Explore our fire and burglary insurance online to learn about the coverage details, inclusions and exclusions customised to your specific needs.