INSURANCE · RISK · ADVISORY

Industrial All Risk Policy (IAR).

Protection structured around real-world risk.

Comprehensive all-risk industrial insurance designed for large-scale manufacturing facilities and industrial estates with sum insured of ₹100 Crore and above, integrating Material Damage and Business Interruption under one unified policy.

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Thoughtful advice. Clear options. Support through the policy journey.

Large-scale industrial manufacturing plant, refinery and complex facility

GITVISHA · RISK ADVISORY

Risk, understood.Start with what matters

Cover that fitsSubject to policy terms

CRITICAL VULNERABILITIES & EXPOSURES

Real-world risks this policy is engineered to solve.

Commercial and personal risks rarely follow idealized assumptions. These are the critical financial pitfalls, claim traps, and operational vulnerabilities that proper policy structuring actively mitigates.

High-Impact Vulnerability01

The Underinsurance Average Clause Trap on Mega Plants

Insuring multi-crore imported industrial machinery and plant structures at historical balance-sheet book value rather than current replacement cost.

Impact: In a ₹40 Crore partial loss with 25% underinsurance, the insurer legally pays only ₹30 Crore, leaving a catastrophic ₹10 Crore shortfall.

Policy Solution: Annual certified replacement cost valuation combined with negotiated agreed margin clauses (waiving underinsurance up to 15%).

High-Impact Vulnerability02

Inadequate Indemnity Period in Business Interruption (FLOP)

Fixing a standard 12-month indemnity period for customized European or Japanese machinery that requires 18 to 24 months for fabrication and delivery.

Impact: Business interruption claim payouts expire at month 12 while the factory is still non-operational, forcing the enterprise to absorb fixed costs alone.

Policy Solution: Supply-chain lead-time modeling establishing 18 to 24-month indemnity periods with combined Fire and Machinery Loss of Profits (MLOP).

High-Impact Vulnerability03

Causation Ping-Pong Between Fire & Machinery Breakdown Insurers

A turbine bearing breakdown igniting high-pressure lubricating oil and destroying the generator hall under separate Fire and MBD policies.

Impact: Fire insurer claims loss originated from mechanical breakdown; MBD insurer claims extensive damage was caused by fire, stalling settlements indefinitely.

Policy Solution: Single comprehensive Industrial All Risk (IAR) policy uniting Material Damage, Machinery Breakdown, and Business Interruption under one underwriter.

UNDERSTAND YOUR OPTIONS

Protection begins with the right questions.

These are discussion points, not a promise that every risk is covered. Final cover depends on policy wording and insurer acceptance.

Section I – Material Damage (All Risk)

Accidental physical loss or damage to buildings, plant, machinery, electrical networks, and inventory from all causes not specifically excluded

Comprehensive Perils Integration

Unifies Fire & Special Perils (SFSP), Burglary, Accidental Damage, and Machinery Breakdown (MBD) under single-point coverage

Section II – Business Interruption (FLOP)

Loss of Gross Profit resulting from turnover reduction following an insured Section I physical loss, including standing charges

Increased Cost of Working (ICOW)

Additional operational expenditure incurred to maintain production schedules or secure alternate manufacturing facilities

Reinstatement Value & Capital Additions

New replacement cost settlement basis plus automatic 5% to 10% cover for in-year plant expansions

Specialized Industrial Endorsements

Professional architects/engineers fees, debris removal expenses, and decontamination/cleanup extensions

WHO IT MAY SUIT

Built around your real-world exposure.

The right structure starts with understanding your assets, operations, people and contractual responsibilities.

Large manufacturing plants, chemical processing units, and pharmaceutical complexes

Automotive, steel, engineering, and heavy fabrication industrial facilities

Power generation plants, petrochemical refineries, and textile mills

Multi-location industrial conglomerates with overall asset value exceeding ₹100 Crore

BEFORE YOU CHOOSE

Details that make a difference.

Compare more than price. Review limits, deductibles, exclusions and policy conditions.

Discuss your requirement

Eligibility benchmark: Total Indian asset sum insured across all locations typically ₹100 Crore or above

Accurate computation of Gross Profit and definition of standing charges (indemnity period: 12, 18, or 24 months)

Underinsurance tolerance: Negotiating agreed margin clauses (typically 10% to 15%) to avoid average clause penalties

Compliance with Tariff Advisory Committee (TAC) fire protection norms (sprinklers, hydrants) to maximize tariff discount credits

GOOD TO KNOW

Questions, answered.

Need more clarity? Send us your requirement and our team can help explore the next step.

Ask our team

What is the key difference between Industrial All Risk (IAR) and Standard Fire (SFSP)?

SFSP is a 'named perils' policy that only covers specific listed causes of loss (fire, lightning, flood, storm). IAR is an 'All Risk' policy that covers every accidental physical damage or destruction unless specifically excluded, while automatically integrating Machinery Breakdown and Business Interruption (FLOP).

What is the eligibility threshold for an Industrial All Risk policy in India?

In the Indian insurance market, IAR policies are designed for industrial and manufacturing units with a total sum insured (Material Damage + Business Interruption) of ₹100 Crore or more across one or multiple locations in India.

Does IAR cover both mechanical breakdown and loss of profit from that breakdown?

Yes. Section I of an IAR policy incorporates Machinery Breakdown (MBD), and Section II (Business Interruption) can be structured to cover loss of profits resulting from machinery breakdown (MLOP) as well as fire (FLOP), ensuring seamless protection.

LET’S TALK ABOUT YOUR RISK

Make your next decision with more clarity.

Tell us about your requirement. Your email application will open with the enquiry ready to send.

A conversation focused on your needs

Options subject to underwriting

Clear next steps, without pressure

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