Industrial All Risk Insurance Overview
Industrial All Risk (IAR) insurance provides comprehensive coverage for material damage, business interruption, and various perils such as fire, burglary, machinery breakdown, and more. The policy indemnifies against a range of risks including fire, theft, negligence, and excludes perils like war or nuclear incidents. Salient features include waived underinsurance, coverage for transit risks, and no depreciation deductions. The Reinstatement Value Clause ensures settlement on a new-for-old basis. Premium refunds differ between FLOP and IAR policies.
- Industrial All Risk
- Insurance Coverage
- Business Interruption
- Reinstatement Value Clause
- Premium Refund
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Presentation Transcript
Scope of Covers (IAR) Section I - Material Damage covering - Fire and all Special Perils - Burglary - Machinery Breakdown/Boiler Explosion/Electronic Equipment Insurance Section II - Business Interruption - Business Interruption (Fire and all Special Perils) - Business Interruption (Machinery Breakdown) OPTIONAL
Indemnify due to Fire, lightning, explosion Flood, inundation Windstorm of any kind Earthquake Theft, burglary Negligence, Malicious acts, Riots and Strikes Short-circuit, arcing, excess voltage
Excluded perils- War or warlike operations Nuclear reaction, nuclear radiation or radioactive contamination Wilful acts or wilful negligence of the insured or of his representatives Penalties, losses due to delay, lack of performance, loss of contract, Wear and tear
Salient Features Underinsurance up to 15% is waived Transit risk within the premises is covered Burglary & other accidental damage cover No depreciation is deducted
Reinstatement Value Clause only building and/or machinery and furniture, fixtures and fittings, The basis of settlement in the event of destruction is the cost of re building of the building or for the plant and machinery, the cost of replacement/ reinstatement of similar property in a condition equal to but not or more expensive that its condition when new. In other words, the settlement is on the new for old basis. The Reinstatement Policy, therefore, seeks to place the insured in a position better than the one which he enjoyed immediately before the loss. NO DEPRECIATION IS DEDUCTED
Refund of Premium Under FLOP adjustment may be till 50% of premium whereas the adjustment in IAR has to be 33 1/3% of premium Under FLOP refund within 12 months of expiry whereas in IAR it is 9 months
