Industrial All Risk Policy

This insurance policy protect your property like buildings, plant and machinery, stocks and other installation against losses or damage caused by fire, flood, storm, earthquake, terrorism, vandalism, theft, smoke, hail, the impact of snow and ice, lightning, accidental damage and breakdown and more. This policy cover the cost to replace or repair the property by providing monetary compensation.

Industrial All Risk Policy
Who can take this Policy?
Add on Covers
Basis of Sum lnsured

This policy is comprehensive cover for loss or damage to all industrial risks (other than risks ratable under the Petrochemical Tariff) with an overall Sum Insured of 100 Cr. and above in one or more locations in India.

The IAR Policy should be taken by Industries which is looking to cover all major risk in their plant in a single Policy.

The policy covers all risks/perils other than those which are specifically excluded. The cover in its widest form, referred to as “All Risk“ includes the following perils/covers:

Section I (Material Damage)

I. Fire and All Special Perils

  • Fire
  • Lightning
  • Explosion/Implosion
  • Aircraft Damage
  • Riot, Strike and Malicious Damage
  • Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation
  • Impact Damage
  • Subsidence and Landslide including Rock slide
  • Bursting and/or overflowing of Water Tanks, Apparatus and Pipes
  • Missile testing operations
  • Leakage from Automatic Sprinkler Installations
  • Bush Fire

II. Burglary including Theft
III. Machinery Breakdown/Boiler Explosion/Electronic Equipment Insurance

  • Explosion/ implosion due to its own working
  • Explosion due to smelt water reaction for waste heat boiler
  • Fuel gas explosion

Section II (Business Interruption)

  • FLOP (Fire Loss of Profit): Business interruption due to fire and all special perils
  • MLOP (Machinery Loss of Profit): Business interruption due to machinery breakdown.MLOP is an optional cover.

In addition to the perils/ expenses covered, the proposer can opt to seek cover in respect of the following perils/ expenses at inception or during currency of the policy on payment of additional premium: Perils Covered

  • Loss/ damage/ destruction of the property caused by Fire
  • Deterioration of Stocks in Cold Storage premises due to power failure following damage due to an insured peril
  • Forest Fire
  • Impact Damage due to Insured's own Vehicles, Fork lifts and the like and articles dropped therefrom
  • Spontaneous Combustion
  • Omission to insure additions, alterations or extensions
  • Earthquake (Fire and Shock)
  • Spoilage material damage cover
  • Leakage and contamination cover
  • Temporary removal of stocks
  • Terrorism

Expenses Covered

  • Architects , Surveyors and Consulting Engineer's Fees (in excess of 3% claim amount)
  • Debris Removal (in excess of 1% of claim amount)
  • Loss of Rent
  • Insurance of additional expenses of rent for alternative accommodation.
  • Start up Expenses

Material Damage Section

  • Building, plant, machinery and other fixed assets - on Reinstatement Value Basis
  • Stock and other current assets - at Market Value Basis

Business Interruption Section

  • Gross Profit (Net Profit + Standing Charges)

The IAR policy is an "All Risks" operational policy that covers all fortuitous mishaps barring a few named exclusions. These exclusions are:
Material Damage Section A) Excluded Causes

  • Faulty or defective design or workmanship
  • Inherent vice, latent defect
  • Gradual deterioration, wear and tear
  • Interruption of water supply, gas, electricity or fuel systems
  • Failure of effluent disposal systems
  • Collapse or cracking of building
  • Corrosion, rust, fungus, shrinkage, pollution or changes in temperature
  • Action of light, vermin, insects
  • Larceny
  • Acts of fraud and dishonesty
  • Inventory losses
  • Coastal and river erosion
  • Normal settlement or bedding down of new structures
  • Willful act or willful negligence
  • Cessation of work
  • War, invasion, mutiny, civil commotion
  • Permanent or temporary dispossession resulting from requisition by lawful authority
  • Destruction by order of public authority
  • Nuclear weapons material, ionizing radiations

B) Excluded Property

  • Money, cheques and other valuable documents unless specifically mentioned in the policy
  • Goods held in trust or on commission unless specifically mentioned in the policy
  • Vehicles licensed for road use
  • Property in transit other than that within the insured
  • Property in course of demolition, construction or erection
  • Land (including top soil) back fill, drainage or culverts, roads, runways, railway lines, reservoir, canals, tunnels, bridges, piers unless specially covered
  • Property damaged as a result of its undergoing any process
  • Property undergoing alteration, repair, testing, or servicing if damage thereto directly attributable to the operations of work performed thereon
  • Livestock growing crops or trees
  • Business Interruption Section The policy does not cover loss resulting from interruption of or interference with the business directly or indirectly from.
  • Any restriction or reconstruction or operation imposed by any public authority
  • Lack of sufficient capital to ensure timely restriction of normalcy
  • Suspension, lapse or cancellation of a lease license or order
  • Damage to boilers, economisers, turbines or other vessels where pressure is used resulting from their explosion implosion
  • Damage to electronic equipments, computers etc.


It is recommended to take MLOP Coverage

  • MLOP is an optional section but it is recommended to cover MLOP as Lead replacement time is many at times lengthier leading to large Business Interruption Losses.

No Need to take any additional Burglary Policy

  • Burglary is a inbuilt coverage that IAR Policy provides. Therefore it nullify  the need of separate Burglary Policy.

Risk Location/s should be properly mentioned

  • IAR is a location specific policy therefore.
  • Complete address with pin code should be clearly mentioned to avoide any ambiguity at the time of claim.

Key Documents at The Time Of Claims

General Claim
Intimation Format
Immediate Action Client
Should Take
Indicative General Documents
for Settlement of Claims
Peril Based Documents Required
for Settlement of

Why Choose Us?

Professional & Experienced Team
Professional & Experienced Team
Customized Solutions
Customized Solutions
Strong Relationship With Insurance Companies
Strong Relationship With Insurance Companies
Service Commitment ONTIME EVERYTIME
Service Commitment ONTIME EVERYTIME
Technological Edge
Technological Edge
Additional Services Offered
Additional Services Offered
Competitive Premium
Competitive Premium
Single Window Solution
Single Window Solution


Proposal Form  
Policy Wordings  
Claim Form  



Claim Case Study - 1




Claims amount get reduced proportionately In relation to Sum Insured/ Value at Risk


Properties or machineries should be insured for market value or replacement value to be considered as on the date of loss (Not on the date of insurance) to avoid average clause


Adequate Sum Insured to be taken after Valuation

Claim Case Study - 2


In a manufacturing plant short circuiting in a heavy machine due to which the claim was denied by the Insurance company


Asset in which the short circuiting has originated is not covered as per the domain clause provision under policy terms and conditions.


Exact smaller part from which the shortcircuiting had occurred was identified. This resulted in the increase in the claim amount because the cost of the smaller part was only disallowed.


Critical machines to be covered under both Fire and Machinery Break Down Policy so that this exclusion is not applicable and there is a resultant increase in the claim amount.



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