Your office/plant is your showcase to the world. You manage and maintain your office/plant with lot of detail, passion and money. A major fire can result in a disaster for a business to the extent that many companies never recover. The importance of having a fire insurance policy cannot be over emphasized.
Fire Insurance covers your office’s structure and contents not only against the risk of fire but also other perils like lightning, flood, storm, earthquake, riots, terrorism etc.
This policy covers property contained in business premises, stocks owned or held in trust against the risk of burglary. It also covers cash, valuables, securities kept in a locked safe or cash box in locked steel cupboard on specific request.
Machinery Breakdown (MBD) Insurance:
The unexpected occurrences of Machinery Breakdown can damage machinery and cause expensive production delays or interrupt cash flow. This policy covers the breakdown of machinery due to various perils. This policy is indispensable for businesses that operate using a large number of machines. The breakdown of a single machine may bring the operations of the factory to a standstill. This policy covers monetary costs involved in restoration or replacement of machines.
Businesses handle cash, and bankers’ drafts, making this form of insurance essential.
The Insurance Covers
- Money while in transit in the personal custody of the insured or his employee.
- Money in premises during business hours
- Money in a safe or strong room outside business hours.
All Risks Insurance:
This policy covers valuables like Jewellery, ornaments, paintings, work of art, and similar artifacts of sentimental values.
The policy provides cover on a wide basis and covers loss or damage due to fire, riot & strike, burglary, house breaking, theft and accidental loss or damage. Cover is not freely granted on account of its vulnerability to losses and moral hazard.
Contractor’s All Risk Insurance:
Construction being a risk prone industry, accidents, including personal injuries and property damage are very frequent,and these accidents may bust your plans, schedules and costs. A CAR policy covers the physical damage to materials to be used for the project – whether in transit, in storage or forming part of the contract works. There is also an ancillary cover up to moderate limits for third party liabilities. It is a main feature of the CAR policy to cover those who have an immediate material interest in the project. That includes the owner, the contractor and usually all sub contractors.
Businesses today depend on computers, laptops and other electronic devices for their day-to-day operations. The Electronic Equipments Insurance policy protects your equipment like computers, communication systems and other electronic equipment from any risk while such equipment is at work, at rest or during maintenance operations. The policy can also cover the additional expenditure that you will have to incur by way of hiring substitute systems.
Scope of Cover
Cover operates when the insured property is at work or at rest or being dismantled for the purpose of cleaning/overhauling or during subsequent re-erection.
The Policy broadly covers:
Material damage to electronic equipment (which can include systems software) due to sudden and unforeseen events, Under Section I Cost of external data media, including cost of reconstruction of data under Section II, as also increased cost of working under Section III. While Section I is compulsory, Section II and Section III are optional.
Section I: New Replacement cost of the insured property including Freight, Erection cost, Customs Duty, if any.
- Section II:Cost of restoring the external data media by replacing lost or damaged data media by new material and lost information.
- Section III:Sum Insured should represent the hiring charges per hour for a substitute equipment for ensuring continued data processing for the period of indemnity specified, including personnel and transportation charges.
For most of the businesses, a Fire/Property Insurance policy is more like a routine electricity/water bill. The Insurance Company sends the renewal notice, you negotiate on premium and premium is paid off. The policy is then forgotten till the renewal comes up.
With terrorism and other risks growing, your business needs to be insulated and protected from any such financial catastrophe. Fire, Riots, Terrorism, Explosion, etc. can cause severe damage to the survival and continuity of any business. At the same time, you need to have the correct idea of what the policy covers and what are the extensions you can go for.
Ques. What does Fire & Special Perils Insurance Cover?
Fire and Special Perils Insurance, one of the oldest forms of Insurance covers these risks, covers a majority of risks on property, making it one of the most crucial and basic covers any business needs to take.
It covers the following perils:
- Aircraft Damage
- Riot, Strike, Malicious and Terrorism Damage
- Atmospheric Perils: Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation
- Loss or visible physical damage to property due to impact of any Road/Rail Vehicle or animal in direct contact not belonging to the owner/employees
- Subsidence and Land Slide including Rock Slide.
- Bursting/Overflowing of Water Tanks, Apparatus and Pipe
- Missile Testing Operations
- Bush Fire [Excluding Forest Fire]
- Leakage from automatic sprinkle installations
Important Add Ons
The following are some important Add-ons/Riders which could be added as per your frequirement to the policy:
- Earthquake Fire and Shock
- Spontaneous combustion
- Removal Of Debris (exceeding 1% of claim amount)
- Architects, Surveyors, Consulting Engineers fees (exceeding 3% of claim amount)
- Spoilage Material Damage Cover
- Leakage and Contamination Cover
- Deterioration of stock in cold storage premises
- Molten metal spillage Cover
- Forest fire
- Impact damage due to Insured’s own Rail/Road vehicles
- Omissions to insure additions, alterations or extensions.
- Temporary removal of stock
- Loss of rent
- Start up expenses
Office Package Policy
Office Insurance Package is a comprehensive package of different insurance policies that provide flexibility and cover for various contingencies. A package policy like this avoids you arranging different policies for fire, burglary, machinery breakdown etc. It provides you complete control of managing all your risks in office under one policy.
Over and above this, an Office Insurance being a package plan also helps you get good discounts.
Section I – Fire and special perils:
Covers the office building and contents against perils such as fire, earthquake, impact damage, etc. Cover under this section can be extended to include terrorism risk.
Section II –Fire loss of profit
Covers losses suffered by you due to interruption with the business carried on at the office premises in consequence of loss, destruction or damage caused by perils covered under Section I
Section III –All risks
Covers all assets, excluding building and incidental stocks, against all risks other than those specifically excluded. Coverage includes fire and allied perils, mechanical and electrical breakdown, accidental breakage and burglary and/or housebreaking
Section IV –Mechanical and electrical appliances
This section covers all electrical and mechanical appliances, apparatus, gadgets and any electrical or mechanical installation which is fixed in the office premises against loss or damage due to unforeseen and sudden physical damage caused by mechanical and/or electrical breakdown.
Section V –Electronic Appliances
This section provides all risk cover for electronic appliances, data processing equipments, apparatus, gadgets, electronic installations, data carrying materials and system software fixed in the office premises.
Section VI -Burglary and housebreaking
This section offers cover for items of property in the office premises against burglary, houbreaking and theft.
Section VII – Money insurance
This section covers loss of money
a) while in transit between the office premises and bank due to accident or misfortune
b) from safe at the office premises due to Burglary or Housebreaking
c) from till/counter at the office premises due to Burglary or Housebreaking
Section VIII –Infidelity/dishonesty of employees
This section provides indemnity for loss or damage to the business against direct pecuniary loss caused by dishonest acts of your employees including act of stealing, misappropriation or fraudulent conversion.
Section IX –Fixed glass and sanitary fittings
This section covers loss or damage due to accidental breakage of
a) Fixed plate glass and sanitary fittings contained in the office premises
b) Frames or framework
c) Lettering consequent upon the breakage of glass
Section X –Neon sign/glow sign/hoarding
Coverage to office publicity tools such as neon signs and hoardings against risks such as fire, lightening, explosion, theft, flood, malicious damage, etc.
Section XI –Legal liability
Employer’s Liability – This sub-section provides compensation to the employees under the Fatal Accidents Act 1855/Workmen’s Compensation Act 1923, and in Common Law, for accidental death or injury arising out of and in the course of employment.
Public Liability – This sub-section covers legal liability to be paid to third parties, including claimant’s costs, fees and expenses incurred anywhere in India, in accordance with Indian Law.
Tenant’s legal liability – This sub-section covers legal liability incurred by you as a tenant of the office premises for damage to the building due to fire and allied perils.
Section XII –Personal accident
This section provides for financial compensation to the insured person in the event of death, bodily injury or disablement due to accident. This can be further extended to cover medical expenses incurred in the event of a valid claim under this section.
Table of Benefits
- Permanent total and absolute disability
- Permanent Partial Disability
- Temporary Total Disablement
Section XIII –Baggage
This section covers loss of baggage of proprietor/ partner/ principal officer /an employee who is in the permanent employment of the proposer due to accident or misfortune during an official travel.