Industrial All Risk Insurance

  •  About Policy 
  •    Benefits 
  •    Scope of Cover 
  •  Sum Insured 

About Policy

Industrial All Risks Insurance provides financial compensation against accidental loss or damage to your plant, machinery, stock and building and against loss for consequential business interruption. This is a comprehensive policy to cover damage to your assets from all unforeseen circumstances except for those defined "Exclusions". The Policy also protects your balance sheet from any adverse consequence arising out of such interruption

Policy Structure

Section - II - Business Interruption

Fire Loss of Profit

Machinery Loss of Profit (optional).


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  1. Complete coverage for the risks that threaten the industrial unit
  2. Covers any unforeseen, sudden and accidental damage (except exclusions) in addition to Perils covered under a Fire Policy.
  3. Option of covering Machinery loss of Profit in one single policy.
  4. Insulation against all possible aspects of risk exposure which may have been overlooked inadvertently
  5. Covers eventualities which cannot be taken care of by any of the present operational policies.

1.   Better coverage

  • Comprehensive policy covering Accidental damage, boiler explosion and machinery breakdown in one single policy.
  • Cover provided for equipments and machinery sent for repairs outside the premises for a limit of 60 days
  • Transit risk cover with compound available
  • 15% underinsurance has been allowed without affecting the claim amount
  • Total loss due to Machinery Breakdown is settled on Reinstatement Value Basis

2.   Administrative control

  • The cover is in widest form
  • Single policy document
  • Risk located in various places can be covered under a single policy

Scope of Cover

The IAR policy is an "All Risks" operational policy that covers all fortuitous mishaps barring a few named exclusions. These exclusions are:

1. 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, ionising 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

2. Interruption Insurance 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
  • Mechanical breakdown or derangement of machinery

These exclusions are to be deleted in case MLOP cover is opted for.


1. Material Damage Section

  • Building, plant, machinery and other fixed assets - at reinstatement value basis
  • Stock and other current assets - at Market Value

2. Business Interruption Section

  • Gross Profit (Net Profit + Standing Charges)

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