Industrial All-Risk Insurance (IAR) Policy

Manufacturers of the goods are always exposed to various business risks during their day to day operations. A major fire accident may devastate your business with huge expenses. Protecting your assets through proper insurance cover is regarded as a financial risk management tool.

Industrial All Risks Insurance policy is a comprehensive insurance / package policy during the operational phase than the traditional “ Standard Fire and Special Perils Insurance Policy’ of the Insured business which will offer protection for manufacturing units, buildings, accessories, goods including raw material, finished goods, machinery and equipment against fire and allied perils which is known as widest form of cover.

Presently, based on the requirements, the organisation takes separate policies against the specific risks. Alternatively, can there be one single policy aggregating all the separate policies covering various risks? This need gave birth to Industrial All Risk (IAR).

This is a comprehensive policy to cover damage to property (ies) from all unforeseen circumstances except for those excluded.

  • Section I – Material Damages
  • Section II – Business Interruptions (Fire Loss of Profit Insurance Policy) 

Section I Material Damages – The cover includes the following perils / covers:

  • Fire and Allied Perils – Read more: Under Standard Fire & Special Perils Policy (SFSP).
  • Burglary – Read more: Under Burglary Policy.
  • Machinery Breakdown – Read more: Under Machinery Breakdown (MBD) Policy.
  • Boiler Explosion – Read more: Under Boiler Explosion Policy.
  • Electronic Equipment – Read more: Under Electronic Equipment Policy (SFSP).

Section II – Business Interruptions (Fire Loss of Profit Insurance Policy)

The policy also protects your balance sheet from any adverse consequence arising out of such business interruption against Fire and Allied Perils.  

To overcome growing complexities and uncertainty, the policy can be further extended to include many more covers, some are illustrated below –

  • Earthquake (Fire and Shock only).
  • Removal of debris.
  • Architects Surveyors Consulting Engineers fees.
  • Impact Damage due to insured’s own rail, road Vehicles, forklifts, cranes, stackers and the like.
  • Omission to Insure additions, alteration or extensions.
  • Spontaneous Combustion.
  • Leakage and Contamination.
  • Spoilage Material Damage to plant & machineries and stocks.
  • Temporary removal of machinery & stocks.
  • Startup expenses & shutdown expenses.
  • Additional Custom Duty.
  • Fire fighting expenses.
  • Loss minimization expenses.
  • Documents/file reproduction cost.
  • Escalation.
  • Terrorism.

Highlights – Industrial All Risk (IAR) Insurance Policy

  • IAR provides comprehensive & seamless cover.
  • All risks are covered other than exclusions named in the policy.
  • The exclusions are specific & few.
  • All the plant & machineries & equipments are covered, not required to submit the list with identifications.
  • The policy is on reinstatement value.
  • The stocks are covered on market value basis, stock declaration facility is not available.
  • Under insurance up to 15% will be ignored.
  • Low premium for machinery breakdown, boiler explosion, electronic equipments.
  • Cost effective considering that the covers are comprehensive & wider.