Industrial All Risk (IAR) Policy

This is a Comprehensive Package Policy which provides cover against unforeseen circumstances including accidental damage to the property, which a large industry may face during its operation.

Minor accidents and breakdowns (or theft) may lead to major shutdown or huge expenses. Electronic equipment and machinery are expensive and often involve large sums invested in and across vast areas. Any major shutdown may lead to potential loss of Market Share and this would have long term percussion.

Eligibility
All industrial risks (other than risks rate-able under the Petrochemical Tariff) with an overall Sum Insured of Rs. 100 Crores and above in one or more locations in India shall be eligible for the Industrial All Risk Policy.

Policy Coverage
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)
Fire and all special perils
Burglary
Machinery Breakdown/Boiler Explosion/Electronic Equipment Insurance
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.

Extensions
Architects’, surveyors’ and consulting engineers’ fees
Omissions to insure additions/alterations
Temporary removal of stock Clause
Debris Removal Clause
Escalation Clause
Earthquake
Act of terrorism
Other extensions are available under relevant sections

Sum Insured
The Sum Insured for Section I (Material Damage) relating to buildings, machinery, furniture, fixtures, fittings and electrical installations shall be on Reinstatement Value basis only, while stocks shall be covered on Market Value basis.
The Sum Insured for machinery breakdown risk should be the same as the Sum Insured of plant and machinery declared under fire, less the value towards piping and cabling.
The Sum Insured for Section II (Business Interruption) based on Annual Gross Profit and Indemnity Period selected.
Indemnity Period i.e. the maximum period during which the business may remain interrupted, can be chosen by the insured depending on the activities involved.

Premium : The premium will depend on the type of cover opted, claims experience, risk exposures, fire protection systems available, maintenance practices and deductible opted under the policy.
Excess : The policy is subject to a compulsory deductible and will depend upon the sum insured
Exclusions : Causes excluded, Inherent vice, normal wear and tear, Collapse or cracking of building, Faulty or defective design, material or workmanship, Pollution, contamination, Inventory losses, Fraud, larceny, Interruption of the water supply, gas, electricity or fuel systems or failure of the effluent disposal systems, etc.

Property excluded
Money, cheques, stamps, bonds, credit cards, bullion, precious stones, works of art, unless specifically mentioned in the policy. Goods held in trust or commission, business books, computer records, manuscripts, unless specifically mentioned in the policy. Vehicles licensed for road use. Property in transit other than within the premises specified in the policy. Livestock, growing crops or trees