Industrial All Risk

Industrial all risk insurance is the policy that covers not only the Physical Losses or damage but also consequential losses arising out of the business interruption due to accidental unforeseen physical loss or damage to property.

  • IAR policy is Exclusion driven policy i.e. it covers all the risk except exclusions. It is divided into two sections:
  1. Material Damage Section
  2. Business Interruption Section

 

  • Scope of cover:

The cover in its widest form will include the following perils/covers:

  1. Fire and all Special Perils
  2. Burglary
  3. Machinery Breakdown/Boiler Explosion/Electronic Equipment Insurance
  4. Business Interruption
  5. Fire Loss of profit
  6. Machinery Loss of profit (optional)

 

  • Sum Insured:

The policy  in  so  far  as  it  relates  to   Buildings, Machinery,  Furniture, Fixtures,      Fittings &  Electrical Installations shall be on Reinstatement Value basis only, while the Stocks shall be covered on Market Value basis. However, the facility of declarations for stocks shall not be available under the IAR Policy.

  • Excess:

Material Damage Claims-Deductibles shall be 5% of the claim amount subject to minimum of Rs.10 Lakhs for sum insured up to —–
Business Interruption Claims- Deductibles shall be

– 7 days Standard Gross Profit.

 

Benefit of IAR over Fire and MB policy:

 

ITEM IAR CONVENTIONAL FIRE & MB
Perils All risk Named peril
Excess Minimum Rs.10 lacs

10 cr to 100 cr

5 % of claim amount sub to a min of 25000 for AOG and NON AOG

Above 100 cr

5% of claim amount sub to a min of 5 lacs
Time Excess. (Business Interruption) Minimum 7 days 7 days
Under insurance Up to 15% ignored No such provision
Burglary Covered w/o extra premium  Not covered
Transit Within premises covered No such cover
Depreciation for M.B. No deduction either for partial or total loss Being deducted
Non metallic parts Will be paid for M.B. claims Not being paid in M.B. claims
Boilers, Electronic equipment’s, mobile machinery. Policy covers these items Separate policies to be availed
Selection Each & every machine has to be covered. No selection available. Selected machines prone to breakdowns can be insured.