Industrial All Risk (IAR) Insurance
Industrial All Risk insurance is the most comprehensive property insurance product available for large-scale industrial operations. Unlike the standard fire policy which covers only named perils, IAR operates on an "all risks" basis — covering all risks of physical loss or damage unless specifically excluded. This broader scope of coverage, combined with integrated machinery breakdown and business interruption protection, makes IAR the preferred choice for major manufacturing plants, processing facilities, and industrial complexes across India.
What Does It Cover?
IAR provides all-encompassing protection that combines property damage, machinery breakdown, and consequential loss under a single comprehensive policy.
Property Damage — All Risks Basis
Covers physical loss or damage to buildings, plant and machinery, stock, and other assets from any cause — including fire, explosion, natural catastrophes, water damage, accidental damage, and unforeseen events — unless specifically excluded. This "all risks" approach eliminates gaps that exist in named-peril policies.
Machinery Breakdown
Covers sudden and unforeseen mechanical or electrical breakdown of plant and machinery — including motor burnout, material fatigue, centrifugal force damage, short circuits, and defects in casting or material. This coverage is built into the IAR policy, unlike standard fire insurance where it requires a separate policy.
Business Interruption / Loss of Profits
Reimburses the gross profit lost and additional expenses incurred during the indemnity period following an insured property damage event. Covers standing charges (rent, salaries, loan repayments) that continue even when production is halted. The indemnity period can be customized from 12 to 36 months based on the expected recovery timeline.
Debris Removal
Covers the cost of clearing, demolishing, and removing debris of insured property following a loss event. After a major fire or explosion at an industrial facility, debris removal can cost crores — this coverage ensures cleanup costs do not eat into the property damage claim amount.
Architects & Surveyors Fees
Covers professional fees payable to architects, surveyors, structural engineers, and consulting engineers necessarily incurred in the reinstatement of damaged property. These fees can add 5-10% to the total reconstruction cost and are essential for regulatory compliance and building code adherence.
Boiler & Pressure Vessel Explosion
Covers damage caused by explosion or collapse of boilers, pressure vessels, economizers, and other pressurized equipment. Industrial facilities operating steam boilers, autoclaves, and compressed gas systems face significant explosion risk that is comprehensively addressed under the IAR policy.
Electrical & Mechanical Damage
Covers damage to electrical installations, transformers, switchgear, and control panels from power surges, short circuits, arcing, and overloading. Also covers mechanical damage to turbines, compressors, pumps, and production line equipment from operational stresses and material fatigue.
Who Needs IAR Insurance?
IAR is designed for large-scale industrial operations where the complexity and value of assets demand broader protection than standard fire policies can provide.
Manufacturing Plants
Automobile, pharmaceutical, chemical, textile, FMCG, and electronics manufacturing plants with high-value machinery, continuous production processes, and complex supply chain dependencies. IAR ensures that both physical damage and consequential business losses are covered under a single policy.
Processing Units & Refineries
Oil refineries, petrochemical complexes, food processing units, and steel mills operate high-risk processes with pressurized systems, high temperatures, and volatile materials. IAR's all-risk basis provides the broadest available protection for these hazardous operations.
Large Industrial Complexes
Multi-unit industrial campuses, special economic zones (SEZs), industrial parks, and integrated manufacturing facilities with property values exceeding INR 50 crore benefit from IAR's comprehensive coverage structure and streamlined claims process under a single policy.
Power & Energy Plants
Thermal power plants, solar parks, wind farms, and captive power generation facilities house critical infrastructure that demands all-risk protection. Equipment like turbines, generators, and transformers represent concentrated asset value that IAR is specifically designed to protect.
High-Tech Manufacturing
Semiconductor fabrication units, precision engineering facilities, and clean-room manufacturing operations rely on highly specialized and expensive equipment where even minor damage can halt production for weeks. IAR covers both the equipment replacement and the resulting profit loss.
Key Benefits
Why India's largest industrial houses choose IAR over standard fire insurance.
Single Integrated Policy
IAR consolidates property damage, machinery breakdown, and business interruption into one policy — eliminating coverage gaps between separate policies, simplifying administration, and providing a single point of claims settlement. One policy, one premium, one claims process.
Broadest Coverage Available
The all-risk basis means you are covered for any loss unless it is specifically excluded. This reversal of the burden of proof — compared to named-peril policies where you must prove the cause matches a listed peril — significantly favors the insured during claims.
Preferred by Lenders & Investors
Banks, private equity firms, and international investors recognize IAR as the gold standard for industrial property insurance. Having IAR coverage demonstrates sophisticated risk management and facilitates access to project finance, term loans, and international investment.
Cost Efficiency at Scale
For large industrial operations, a single IAR policy is typically more cost-effective than purchasing separate fire, machinery breakdown, and business interruption policies. The bundled structure also reduces administrative overhead and eliminates inter-policy coverage disputes during claims.