Factory Fire insurance Policy

Factory Fire insurance Policy

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Reasonable

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Total Cover

100% Claim Settlement

No

Documentation

Reasonable

Premium

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Client Testimonials​

3 weeks ago
They guided me through the intricacies of various insurance options, ensuring I fully understood each policy's coverage and benefits. Their transparency and willingness to address all my concerns instilled a sense of trust and confidence in their services.
5 months ago
Beemawala and team is a best Company for take any type of insurance. They support and take care of your claim . Thanks a lot for your support of my claims many times .
6 months ago
Really satisfied and happy with the progress in the process Thank you for your service and your support
a year ago
Beemawala team provides professional services with best solution both at corporate and personal level. Always ready to answer any queries related to policy. I am very happy with the service.
a year ago
Shantanu is professional and very prompt in responding to my questions. I’m a repeated client and he’s been supportive throughout. I highly recommend his services. I wish him and his team good luck for future.

What is Factory Fire insurance Policy ? 

Factory Fire Insurance Policy is a type of insurance that provides coverage against damages or losses caused by fire-related incidents to manufacturing facilities, factories, and their contents. This policy safeguards businesses from the financial impact of fire accidents that can result in significant property damage, destruction of machinery, and interruptions in operations. It typically covers costs associated with repairing or replacing damaged property, machinery, equipment, and other assets affected by fire. This insurance helps businesses recover financially and resume their operations after fire disasters, ensuring minimal disruptions and losses.

Example: How Factory Fire Insurance Helped Mr. Rajesh of Dam Dam Diga Digan Company: Mr. Rajesh, owner of Dam Dam Diga Digan Company, faced a severe fire incident that caused extensive damage to his factory, machinery, and building. The total loss amounted to 5 crore rupees. Fortunately, Mr. Rajesh had wisely invested in a comprehensive Factory Fire Insurance Policy with add-on covers.

The policy came to his rescue in several ways: Property Coverage: The basic fire insurance coverage compensated Mr. Rajesh for the damage caused to his factory building, machinery, and other assets due to the fire.

Add-On Cover: Mr. Rajesh had opted for an add-on cover for business interruption or loss of profit due to the fire incident. This additional coverage helped him mitigate the financial impact of business disruption during the rebuilding process.

Reconstruction and Replacement: The insurance policy covered the costs of rebuilding the factory, replacing damaged machinery, and repairing structural damages.

New Machinery: With the insurance payout, Mr. Rajesh was able to purchase new machinery and equipment, ensuring that his production capacity was restored efficiently.

Employee Wages: The policy included coverage for wages of employees during the downtime, which helped maintain a stable workforce despite the business interruption.

Liability Coverage: In case the fire caused harm to third parties or their properties, liability coverage protected Mr. Rajesh from legal claims and financial liabilities.

Expert Assistance: The insurance company provided assistance from professionals who assessed the extent of the damage and helped Mr. Rajesh with the claims process.

Peace of Mind: The financial support from the insurance policy eased Mr. Rajesh’s worries, allowing him to focus on rebuilding his business without the burden of the entire cost.

In conclusion, Mr. Rajesh’s Factory Fire Insurance Policy, with its comprehensive coverage and add-on benefits, played a vital role in helping him recover from the devastating fire incident. The policy not only covered the property and asset losses but also provided the financial stability needed to rebuild the factory and resume operations successfully.

Coverages of Factory Fire Insurance Policy

The Factory Fire Insurance Policy provides coverage for a range of risks and losses arising from fire-related incidents in a manufacturing facility. The coverages include:

Fire Damage

The policy covers damages caused by fire to the factory building, structure, and contents, including machinery, equipment, raw materials, finished goods, and inventory.

Property Damage

It includes coverage for damage to property due to fire, such as walls, roofs, floors, and fixtures.

Business Interruption

This coverage compensates for the loss of income and ongoing expenses during the period of business interruption caused by fire, helping the business sustain itself while repairs are being made.

Machinery and Equipment

The policy provides coverage for the repair or replacement of damaged machinery and equipment affected by fire.

Stock and Inventory

It covers losses related to damaged or destroyed stock and inventory caused by fire.

External Accessories

Damages to external accessories like signage, fences, gates, and other structures are also covered.

Debris Removal

The policy covers the cost of debris removal after a fire incident, ensuring the site is cleared for rebuilding.

Alternate Accommodation

If the factory becomes uninhabitable due to fire, the policy may cover the cost of temporary accommodation for the business operations.

Add-On Covers

Additional covers can be added for specific needs, such as earthquake, flood, riot, strike, terrorism, and more.

Legal Liability

If the fire causes damage to neighboring properties or injuries to third parties, the policy may provide coverage for legal liabilities.

Professional Fees

Coverage for professional fees associated with assessing the damage and processing the insurance claim.

Expediting Expenses

In case of immediate repairs or expedited delivery of machinery and equipment, this coverage reimburses the additional expenses incurred.

The Factory Fire Insurance Policy provides coverage for a range of risks and losses arising from fire-related incidents in a manufacturing facility. The coverages include:

Additional Add-ons of Factory Fire Insurance Policy

Earthquake Cover

 Extends the policy to include damages caused by earthquakes or related events.

Flood Cover

Provides coverage for damages caused by flooding or inundation.

Terrorism Cover

Offers protection against damages caused by acts of terrorism and related perils.

Impact Damage

Covers damages caused by impact from vehicles, falling objects, or other accidents.

Boiler Explosion

Provides coverage for damages caused by explosion or implosion of boilers and pressure vessels.

Machinery Breakdown

Extends coverage to include damages due to sudden and unforeseen breakdown of machinery.

Business Interruption Extension

Offers higher limits for business interruption coverage to compensate for lost profits during the restoration period.

Loss of Profits

Covers loss of anticipated profits due to business interruption caused by fire incidents.

Increased Cost of Working

Provides coverage for additional expenses incurred to keep the business running after a fire.

Deterioration of Stock

Offers coverage for losses due to the deterioration of perishable goods after a fire incident.

Rent for Alternate Premises

Covers the cost of renting alternative premises during the restoration period.

Removal of Debris Extension

Extends coverage for removal of debris and associated expenses.

Public Utilities

Covers losses due to interruption of essential public utility services like electricity, water, and gas.

Sprinkler Leakage

Provides coverage for damages caused by explosion or implosion of boilers and pressure vessels.

Start-up Expenses

Covers the expenses required to restart the business after a fire incident.

Reinstatement Value Clause

Ensures that the sum insured reflects the current replacement value of the property and assets.

These additional add-ons can be customized based on the unique requirements of the factory and the potential risks it may face. Adding relevant add-ons can provide comprehensive protection and ensure that the policy aligns with the specific needs of the business.

Factors Determining the Premium of Factory Fire Insurance Policy

Property Value

The total value of the factory’s building, machinery, equipment, and inventory.

Location

The geographical location of the factory, including factors like proximity to fire stations and natural disaster-prone areas.

Construction Material

The type of materials used in constructing the building, as some materials are more fire-resistant than others.

Occupancy

The type of activities conducted in the factory, such as manufacturing, storage, or assembly.

Fire Safety Measures

The presence and effectiveness of fire safety measures like fire alarms, sprinklers, fire extinguishers, and hydrants.

Risk Management Practices

The factory’s adherence to safety protocols and risk management practices to prevent fire incidents.

Previous Claims History

The history of previous fire insurance claims made by the factory, which may impact the premium.

Business Interruption Coverage

If business interruption coverage is included, the estimated revenue loss during downtime will affect the premium.

Add-On Covers

 The selection of additional coverage options, such as machinery breakdown, earthquake cover, or terrorism cover.

Sum Insured

The total value for which the factory is insured, including assets and potential business interruption losses.

Deductibles and Excesses

Deductibles

The amount the policyholder agrees to pay before the insurance coverage kicks in, which can influence the premium.

Risk Assessment

Risk Assessment

An evaluation of potential hazards, vulnerability to fire incidents, and the likelihood of damage.

Industry Type

The industry in which the factory operates, as some industries may have higher fire risks.

Operational Hours

The duration the factory operates daily, as longer operational hours could increase the risk of fire.

Type of Property

Whether the property is owned, leased, or rented, as ownership status can impact the premium.

Claims Experience

The factory’s claims history with other insurance policies, indicating its overall risk profile.

Business Value

The value of the business’s operations and assets, influencing the potential financial impact of a fire incident.

Insurers consider these factors collectively to assess the overall risk exposure of the factory and determine an appropriate premium amount. It’s essential for businesses to accurately provide information about their operations and safety measures to ensure fair pricing and comprehensive coverage.

What is the diffence Between Godown Insurance and Factory Fire Insurance Policy ?

Aspect Godown Insurance Factory Fire Insurance Policy
Coverage Area
Primarily covers goods in a godown
Covers the entire factory property
Property Insured
Goods and contents in storage
Building, machinery, inventory, etc.
Focus
Storage facilities
Manufacturing facilities
Purpose
Protects stored goods from perils
Safeguards against fire incidents
Property Valuation
Value of stored goods and inventory
Value of building and equipment
Coverage Extent
Limited to storage area
Extensive property coverage
Business Interruption
Limited or separate coverage
Often included or available
Add-On Covers
May include burglary, transit, etc.
Machinery breakdown, equipment, etc.
Risk Factors
Theft, damage during storage
Fire risks due to manufacturing
Premium Determinants
Value of stored goods, location
Property value, risk factors, etc.
Industrial Application
Suitable for warehousing businesses
Suitable for manufacturing units

How to Settle Factory Fire Insurance Policy Claim

To settle a Factory Fire Insurance Policy claim, follow these steps:

Notification

Notify Insurer

Inform your insurance company about the fire incident as soon as possible. Provide details like policy number, location, cause of fire, and extent of damage.

Claim Form Submission

File a Claim

Fill out the claim form provided by your insurer. Include information about the fire’s impact on the factory, machinery, equipment, inventory, and any other covered items.

Provide Documentation

Gather relevant documents such as the fire department’s report, FIR (if applicable), policy documents, and photographs or videos of the damaged property.

Document Collection

Assessment

An insurance surveyor will assess the extent of damage and loss. Cooperate with them and provide necessary access for inspection.

Claim Estimation

The surveyor will estimate the loss based on the extent of damage, cost of repairs or replacement, and policy terms.

Claim Settlement

Upon completion of assessment, your insurer will provide you with the claim settlement amount. This could be a reimbursement for repairs or replacement costs, subject to policy terms.

Approval

Review the claim settlement offer. If you agree, sign the required documents to approve the settlement.

Payment

Once you’ve accepted the settlement, your insurer will process the payment according to the terms of your policy.

Rebuilding or Repairs

Use the settlement amount to rebuild or repair the factory, replace machinery, and restore the damaged property.

Closure

After completing the necessary repairs or rebuilding, inform your insurer about the completion. Provide invoices and proof of expenses if required.

Remember, each insurer might have slightly different claim procedures, and it’s crucial to follow your policy’s terms and conditions closely to ensure a smooth claims settlement process.

Exclusions of Exclusions of Factory Fire Insurance Policy

Wilful Negligence

Damage caused intentionally or due to deliberate negligence by the insured or their employees.

War and Nuclear Risks

Loss or damage arising from war, civil war, nuclear radiation, or contamination.

Wear and Tear

Normal wear and tear, gradual deterioration, or maintenance-related issues.

Consequential Loss

Financial losses resulting from the fire, such as business interruption or loss of goodwill.

War and Terrorism

Terrorism

Damage caused by acts of terrorism or terrorist organizations.

Mechanical or Electrical Failure

Electrical and Mechanical Breakdown

Damage caused by electrical or mechanical breakdown, unless explicitly covered.

Loss of Data

Loss of Data

Loss or damage to data, records, documents, or digital assets.

Unauthorized Alterations

Damage resulting from unauthorized alterations or structural changes to the insured property.

Stock Losses

Loss or damage to stock due to its own fermentation, heating, or spontaneous combustion.

Inadequate Security

Losses due to insufficient security measures or lack of fire prevention systems.

Change in Risk

Changes in the nature of the business or property that weren’t disclosed to the insurer.

Loss Beyond Policy Period

Losses occurring beyond the policy period unless extended by an endorsement.

Documents Required for Claim Settlement under Factory Fire Insurance Policy

In case of Theft Claim:

FIR

A copy of the First Information Report (FIR) filed with the police regarding the theft incident.

Police Investigation Report (if applicable)

Police Investigation Report

The report of the police investigation conducted to ascertain the circumstances of the theft.

Inform the Insurance Company

Claim Form

 Duly filled and signed claim form providing details of the theft and the property stolen.

Proof of Ownership

Documents establishing ownership of the stolen property, such as purchase invoices, bills, or registration papers.

List of Stolen Items

A detailed list of all items stolen, including their descriptions, quantities, values, and proofs of ownership.

Valuation Reports

Any valuation reports, appraisals, or assessments confirming the value of the stolen items.

Photographic Evidence

Photographs of the stolen items, if available, to support the claim.

Declaration of Loss

A formal declaration of loss, signed by the insured, stating the details of the theft and the claim amount.

Bank Details

Bank Details

Details of the insured’s bank account for claim payouts.

Witness Statements

Witness Statements

If applicable, statements from witnesses who can provide information about the theft incident.

Identity Proof

Proof of identity of the insured, such as Aadhar card, PAN card, passport, or driver’s license.

Non-Objection Certificate (NOC)

If required by the insurer, an NOC from any financial institution that holds a lien on the stolen property.

Insurance Policy

Copy of the Factory Fire Insurance Policy along with the schedule and endorsements, if any.

Any Other Supporting Documents

Any other documents requested by the insurance company to support the theft claim.

It’s important to promptly report the theft to the police and your insurance provider and gather all required documents to ensure a smooth and efficient claim settlement process.

Documents Required for Claim Settlement under Under Construction Building Insurance Policy

In case of Fire Claim

Fire Department Report

A report from the local fire department detailing the cause, extent, and nature of the fire incident.

File an FIR (If applicable)

FIR

A copy of the First Information Report (FIR) filed with the police regarding the fire incident.

Claim Form Submission

Claim Form

Duly filled and signed claim form providing comprehensive details about the fire damage and loss.

List of Damaged Items

A comprehensive list of all damaged items and property, along with their values and proofs of ownership.

Valuation Reports

Any valuation reports, appraisals, or assessments confirming the value of the damaged property.

Photographic Evidence

Photographs of the damaged property before and after the incident, if available, to support the claim.

Repair Estimates

Estimates of repair costs from qualified professionals or contractors.

Bank Details

Bank Details

Details of the insured’s bank account for claim payouts.

Police Investigation Report (if applicable)

Invoices and Bills

Copies of invoices, bills, and purchase receipts for damaged items, showing their original cost.

Declaration of Loss

A formal declaration of loss, signed by the insured, specifying the extent of the damage and the claim amount.

Witness Statements

Witness Statements

If applicable, statements from witnesses who can provide information about the fire incident.

Policy Document

Insurance Policy

Copy of the Factory Fire Insurance Policy along with the schedule and endorsements, if any.

Fire Brigade Report

A report from the fire brigade detailing their actions and observations during the incident.

Property Ownership Proof

Documents establishing ownership of the damaged property.

Non-Objection Certificate (NOC)

If required by the insurer, an NOC from any financial institution that holds a lien on the damaged property.

Any Other Supporting Documents

Any other documents requested by the insurance company to support the fire claim.

Contact Information for Claim Settlement: related to Factory Fire Insurance Policy

If Policy Obtained through Agent/Broker

Contact your agent or broker first, as they will guide you through the claims process and assist in reporting the claim.

If Policy Obtained Directly from Insurance Company

Contact the insurance company’s claims department directly to report the claim and follow their instructions for a smooth claims settlement.

Claim Contact Information for Policy from Beemawala.com

If you have taken the policy from Beemawala.com, please use the following contact details to register your claim.

  • Phone: +91-9654259715
  • Email: services@beemawala.com

Kindly reach out to the provided contact information to initiate the claim settlement process with Beemawala.com.

Frequently Asked Questions: (FAQs) Factory Fire insurance Policy

Factory insurance is a type of insurance policy that provides coverage against losses and damages to a factory’s property, machinery, equipment, and other assets due to events like fire, theft, or natural disasters.
Factory insurance expenses are recorded as indirect expenses in the profit and loss account of the final accounts.
Factory insurance is categorized as an indirect expense and is recorded in the profit and loss account of the final accounts.
Insurance companies specializing in commercial and industrial insurance underwrite factory insurance policies.
A factory insurance policy typically covers damages and losses to the factory’s building, machinery, equipment, inventory, and other assets due to covered events.
Factory insurance is considered an indirect expense as it is not directly related to the production process but contributes to the overall operational costs.
The cost of factory insurance in India varies based on factors such as the size of the factory, the type of coverage, location, and the value of assets insured.
Yes, many insurance companies offer the option to purchase factory insurance online through their official websites.
Factory insurance does not have a specific Harmonized System of Nomenclature (HSN) code, as it is not a physical good.
Yes, in many cases, businesses can claim Input Tax Credit (ITC) on the Goods and Services Tax (GST) paid on factory insurance premiums.
The entry for factory insurance expenses is recorded in the debit side of the profit and loss account in the final accounts.
Factory insurance is included in the indirect expenses section of the cost sheet, contributing to the overall overhead costs of production.
Accurate documentation is crucial for a smooth claim settlement process, as it helps validate the claim and determine the extent of losses.
Such a policy typically covers damages caused by fire, lightning, explosions, and related perils to the factory’s building, contents, machinery, equipment, and inventory.
While factory fire insurance is not legally mandatory in most places, it is highly recommended to protect businesses from substantial financial losses due to fire incidents.
Additional add-ons may include coverage for business interruption, machinery breakdown, earthquake damage, and coverage for specific perils based on the factory’s location and needs.
Factors such as the location of the factory, its construction type, the value of assets, the level of coverage, and any add-ons selected play a role in determining the premium.
A surveyor assesses the extent of damage during a fire incident and helps the insurance company determine the validity and amount of the claim.
Yes, some policies offer coverage for business interruption losses due to fire incidents, ensuring continuity of operations even during repairs.
The process involves informing the insurance company immediately, providing necessary documents like the policy copy, details of the incident, and cooperating with the surveyor’s assessment.
Exclusions might include damage due to wear and tear, electrical or mechanical breakdowns, intentional acts, and damages caused by events not covered by the policy.
Yes, with the appropriate coverage, a policy can help financially to rebuild structures, replace machinery, and resume operations after a fire.
Yes, accurate disclosure of information about the factory’s location, construction, assets, and the type of business is crucial to ensure a valid and hassle-free claim settlement.
Benefits include financial protection against fire-related losses, peace of mind for business owners, and the ability to recover and rebuild after an unfortunate event.

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