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What is fire insurance for factory?

Fire insurance for factory is a type of business insurance that protects factories from financial losses incurred due to covered perils. Specifically, it covers your factory from damages caused by fire and associated perils like lightning, explosions, etc. For example, sudden fire can cause heavy losses. Factory insurance, often used interchangeably with fire insurance for factory, helps businesses recover from such events without major financial stress.

With the right factory insurance policy, you can focus on growth without worrying about losses. It provides peace of mind and financial security.

Importance of factory insurance

Factories are the backbone of industries. They produce goods, generate employment and contribute to the economy. However, running a factory comes with many risks, which can cause heavy losses. Here are some reasons why factory insurance is essential:

Protection against machinery damage

Machinery is the heart of any factory. Damage or physical loss of machinery (caused by covered perils) can halt production and cause revenue loss. A factory insurance policy covers the cost of repair or replacement. This helps you resume work without delays.

Protection against natural and man-made calamities

Fires, floods, cyclones, lightning, storms, acts of terrorism, etc., can damage your factory. Without factory fire insurance, you might have to bear the entire loss yourself. Factory insurance ensures financial support for rebuilding and recovering quickly.

Extensive coverage for insurable assets

ICICI Bharat Sookshma Udyam Suraksha offers a high sum insured of up to Rs 5 crore. This ensures that you have sufficient financial support in case your insurable assets are damaged by fire.

Ensures business continuity

Any damage from fire and other covered risks can affect your factory operations and ultimately your revenue. With a factory insurance policy, you get peace of mind knowing that your losses will be covered as per the policy’s terms and conditions.

Who should buy fire insurance for factory?

The following individuals and entities need to buy factory insurance:

1

Factory owners

If you own a manufacturing unit, this insurance financially safeguards your property, machinery and stock from risks like fire and natural disasters.

2

Manufacturers

Whether you produce textiles, electronics or food products, factory insurance helps cover damages caused by covered perils.

3

Small and medium enterprises

Whether it’s a small factory or a medium industrial unit, protecting assets is crucial for smooth operations.

4

Entrepreneurs setting up a factory

If you’re starting a new manufacturing business, fire insurance for factory helps you manage risks from day one.

Key features of factory insurance by ICICI Lombard

Holistic coverage

Our factory insurance policy offers holistic coverage against a range of natural and man-made perils. With our policy, you can recover quickly after a loss.

Quick claim settlement

Our claims process is simple and fast. You can file claims and get quick settlements. This ensures minimal disruption to operations.

Instant policy issuance

We’ve invested in cutting-edge technology to ensure that you can buy our Bharat Sookshma Udyam Suraksha policy within 5 minutes! Your factory can be insured with just a few quick clicks and minimal paperwork.

What is covered under fire insurance for factory?

  • Inclusions
  • Exclusions
Losses Covered Explanation
Losses due to natural disasters Factory insurance acts as a financial shield against losses caused by natural disasters like floods, earthquakes, fires and storms.
Losses due to explosion or implosion Factory insurance provides financial protection in case of unexpected disasters like explosions or implosions.
Losses due to riot, strikes and malicious damages Factory insurance helps you deal with the losses incurred due to riots, strike and malicious damages.
Losses due to fire Factory insurance policy provides coverage for fire-related damages, including those caused by flames and risks such as fermentation, natural heating and spontaneous combustion.

Go through the policy documents to know the inclusions.

Exclusions Explanation
Intentional loss or damage Factory insurance is designed to protect businesses from unexpected damages. However, it does not cover intentional losses.
Damage to electrical equipment due to specific causes This insurance does not cover loss, damage or destruction of electrical or electronic equipment due to over-running, excessive pressure, short circuits, arcing self-heating, or electricity leakage (including lightning) is excluded.
Stock damage due to temperature change Factory insurance does not cover loss, damage or destruction of stock in cold storage due to temperature changes.

Read the policy wordings to know the complete list of exclusions.

How to keep factory insurance premium low?

You can follow these steps to keep your factory insurance premiums low:

Documents requires to buy a fire insurance for factory?

To purchase a fire insurance policy, the required documents may vary slightly depending on the insurer, but generally include the following:

  • Proof of identity and address

    This can be provided through documents such as your Aadhaar card, voter ID card, passport or driving license.

  • Factory Plan

    A detailed layout or blueprint of the factory that needs coverage.

  • Property valuation report

    An official evaluation of the factory’s current market value.

  • Proof of ownership

    Documents that confirm you are the rightful owner of the factory, such as the title deed or sale agreement.

How to buy group health insurance?

How to buy fire insurance for factory online?

  • Visit our website.

  • Share your name, mobile number, email and pin code and click on ‘Proceed to Buy’

  • Follow as instructed on the page that appears to buy the policy

Factory insurance: Claim process

Here’s a step-by-step guide to claim from factory insurance:

  • Step 1: Inform the insurance company immediately Notify your insurer about the incident as soon as possible. You can do this through a phone call, email or your insurer’s mobile app.

  • Step 2: Gather evidence and fill claim form Fill out the claim form and submit a proof of loss, which usually include the description of damaged property/machinery, date of loss, details about injuries (if any), police FIR copy, etc.

  • Step 3: Cooperate with the surveyor The insurance company will send a surveyor to inspect the damage and assess the claim. The surveyor’s report plays a vital role in determining the compensation amount.

  • Step 4: Wait for the claim approval and get compensation The insurer will process the claim once you submit all the documents. If everything is in order, they will approve the claim and either reimburse you or directly pay for the repairs, depending on the policy terms.

Frequently Asked Questions

Why is factory insurance important?

Once you submit all the documents, the insurer will process the claim. If everything is in order, they will approve the claim and, depending on the policy terms, either reimburse you or directly pay for the repairs.

How to determine the premium of a factory insurance?

The premium for a factory insurance policy depends on factors like the size and nature of the factory, the value of machinery and equipment and the risks involved. Insurers assess factors such as fire hazards, location, safety measures and past claims history to determine the premium.

Is Your Business Safe?

70% of SMEs in India face at least one business-related risk in the last three years*.
Protect your business with expert advice from our trusted team.

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*Source: Times of India

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You will be contacted by our Relationship manager shortly with a customised quotation. To connect further for any queries, you can write to businessinsurance@icicilombard.com or call us on 1800 2666.

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