Factory and Warehouse Insurance

A Factory Insurance Policy reimburses the Insured for any Material Damage to the assets due to variety of perils such as fire, natural calamities like earthquake, storms, cyclones, etc. Incidents involving burglary and theft can also be covered under this Policy.

A Factory Insurance Policy in India can also be extended to cover Business Interruption Insurance also known as Fire Loss of Profit Insurance. This can be crucial as expenses like salary, rent, etc never stop.

People are the most important asset of any business and their salaries can be paid using the Loss of Profit Cover. It usually takes time to get your claims and reinstate a whole factory and get back to routine production. Several months that are lost in this process can make a severe dent in the reserves of your balance sheet. Always consider taking a Loss of Profit Cover additionally.

A Factory Insurance Policy reimburses the Insured for any Material Damage to the assets due to variety of perils such as fire, natural calamities like earthquake, storms, cyclones, etc. Incidents involving burglary and theft can also be covered under this Policy.

A Factory Insurance Policy in India can also be extended to cover Business Interruption Insurance also known as Fire Loss of Profit Insurance. This can be crucial as expenses like salary, rent, etc never stop.

People are the most important asset of any business and their salaries can be paid using the Loss of Profit Cover. It usually takes time to get your claims and reinstate a whole factory and get back to routine production. Several months that are lost in this process can make a severe dent in the reserves of your balance sheet. Always consider taking a Loss of Profit Cover additionally.

A Factory and Warehouse Insurance provides a comprehensive cover for all the assets of your corporation:

• Building including walls, compound, plinth and foundation
• Plant and Machinery, all equipment
• Stock – raw materials, in-process stock, finished goods
• Furniture, fixture, electronics such as AC, laptop, computers, printers, etc.
• Expensive art or antiques

• Comprehensive cover:
  As the word suggests, a comprehensive Factory & Warehouse Insurance Policy can be issued with the choice of additional coverages.

• Agreed Value policy:
  Some items such as expensive art are difficult to ascertain market value to. Hence, before the policy coverage starts – the client and Insurance Company agree on a value of the asset being insured.

• Floater policy:
  This option is useful to clients who frequently have their assets at different locations. This is particularly useful for a distributor, C&F agent using multiple godowns or warehouses and has stock at different locations.

• Reinstatement Value (RIV) policy:
  This type of Factory and Warehouse Insurance Policy pays the replacement cost of your asset and not the depreciated value. For example, a machine was bought for Rs 1 lakh, say 10 years ago. The depreciated value of this machine on balance sheet is now Rs 10,000. In the event of a claim, the same machine can now be bought for Rs 200,000 as per current prices. The Insurance Policy will consider this replacement cost of Rs 2 lakhs and not the depreciated value of Rs 10,000

Following good industry practices can result in getting an overall better rating from the insurance company. This helps in reducing the Factory and Warehouse Insurance Cost and it also increases chance of proposal acceptance from the insurance company as well as faster claims settlement.

Factors such as:

• Installing Fire Extinguishers, Hydrants, Sprinklers at the site to minimize fire damage
• Maintaining AMCs for all equipment and machines used
• Having CCTV cameras and 24*7 security guards
• Having limited or no exposure in basement
• Nil claims history

can be really helpful during the underwriting of factory and warehouse insurance policy and in reducing the factory insurance cost as well.