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⚡ Industrial Insurance· All Risk· ₹100 Crore+· Apex Product

The Widest Industrial Property Protection with
Industrial All Risk (IAR) Policy

the insurer's apex commercial property insurance — the All Risk package for ₹100Cr+ industrial enterprises. Section I: Material Damage (Fire + Machinery Breakdown — both mandatory) + Section II: Business Interruption (Fire LoP mandatory; Machinery LoP optional). Earthquake in-built. Burglary covered. Reinstatement Value basis. Replaces three separate policies in one integrated package.

✅ All Risk — Not Named Perils ✅ Earthquake In-Built (no add-on needed) ✅ Burglary Covered — Unlike SFSP ✅ Machinery Breakdown — Mandatory Section ✅ Fire + Machinery Business Interruption ✅ ₹100 Crore+ Industrial Enterprises
India's broadest industrial property insurance — All Risk, not named perils.  |  An IRDAI licensed insurance broker.
IAR
🏛️IRDAI Licensed Broker· Lic. No. 528
⚡All Risk — The Broadest Industrial Coverage
🏭₹100 Crore+ Minimum SI — Apex Industrial Product
📞Claims Support 022 4302 0000
An IRDAI Licensed Insurance Broker

the insurer Apex Industrial Property Insurance· All Risk· ₹100 Crore+· Replaces 3 Separate Policies

What is the Industrial All Risk (IAR) Policy?

The Industrial All Risk (IAR) Policy is the insurer's most comprehensive commercial property insurance — the apex of the entire the insurer fire insurance family. Unlike every other product in the insurer's portfolio which covers only named perils, IAR operates on an All Risk basis: it covers ALL physical loss or damage UNLESS specifically excluded. For large industrial and manufacturing enterprises with SI ≥ ₹100 crore, IAR replaces three separate policies in one integrated package.

the insurer Fire Insurance Family — The Hierarchy (IAR at Apex)
1

Bharat Griha Raksha (BGR / BGRP+)

Residential home insurance· Any SI· Named perils· Reinstatement Value

Residential
2

BSUS / BSUS+

Micro/small commercial· ≤₹5 crore· Named perils· 12 optional covers

≤ ₹5 Crore
3

BLUS / BLUS+

Small/medium commercial· ₹5–₹50 crore· Named perils· Contingent BI

₹5–₹50 Crore
4

Standard Fire & Special Perils (SFSP)

Large/complex/customised· Any SI· Named perils· Customisable

>₹50 Crore
5

Industrial All Risk (IAR) — THIS PRODUCT ⚡

Apex industrial· ALL RISK (not named perils)· ₹100Cr+ SI· Fire + Machinery Breakdown + BI in one

₹100 Crore+ APEX
The Fundamental Difference — Named Perils vs All Risk

🗒️ Named Perils Approach (SFSP/BLUS/BSUS)

✘Policy lists specific covered perils (Fire, Lightning, Flood..)
✘Everything NOT on the list is AUTOMATICALLY EXCLUDED
✘Burden on insured: "Is my peril specifically named?"
✘Earthquake costs extra (SFSP); must be added as add-on
✘Burglary not covered (SFSP); accidental damage excluded
✘3 separate policies needed for full industrial protection

⚡ All Risk Approach (IAR)

✔Policy lists ONLY what is EXCLUDED
✔EVERYTHING ELSE is automatically covered
✔Simple question: "Is my loss in the exclusion list?" If no → COVERED
✔Earthquake IN-BUILT — no add-on, no extra premium
✔Burglary covered· Accidental damage covered· On-site transit covered
✔Single IAR policy = SFSP + Machinery BD + Fire LoP combined
🔀

IAR Replaces Three Separate Policies — One Integrated Package for ₹100Cr+ Industrial Risks

  • Standard SFSP:Fire / NatCat / RSMD coverage — one policy, one renewal, one premium
  • + Standalone Machinery Breakdown:Machine failure coverage — second policy, second renewal, second premium
  • + Fire Loss of Profits:Business interruption — third policy, third renewal, third premium
  • = THREE separate policies.Three renewal dates. Three sets of surveyors for any loss event. Three premium negotiations.
  • IAR =All three in ONE integrated package. Single policy. Single renewal. Single surveyor appointment. Broader coverage than all three combined (All Risk basis). Often more cost-effective for ₹100Cr+ industrial risks.
6 Reasons IAR is the Apex Industrial Property Policy
⚡

All Risk — Not Named Perils

IAR tells you only what's NOT covered. Every other loss is automatically covered. The broadest property insurance concept.

All Risk Philosophy
🌍

Earthquake In-Built

Unlike SFSP where earthquake costs extra, IAR's All Risk scope automatically includes earthquake. No separate add-on needed.

No Extra Premium
🔒

Burglary Covered

SFSP doesn't cover theft. IAR includes Burglary as a mandatory sub-cover — physical loss of assets during break-in fully covered.

Mandatory Coverage
⚙️

Machinery Breakdown — Mandatory

In BLUS+, machinery breakdown is optional. In IAR, it's a mandatory Section I-B — you cannot take IAR without it. Machine failure always covered.

Section I-B Mandatory
💼

Fire LoP — Mandatory BI

Business Interruption (Fire Loss of Profits) is mandatory in IAR — unlike SFSP where it's a separate attached policy you choose to add.

Section II-A Mandatory
🔄

One Policy, One Renewal

Single IAR replaces SFSP + Machinery Breakdown + Fire LoP. One premium, one renewal date, one insurer, one surveyor for any loss.

Integrated Package
Industries Eligible for IAR (SI ≥ ₹100 Crore)
🏗️

Steel / Metal

Integrated steel plants, rolling mills, blast furnaces

🧬

Pharma / Chemical

API plants, formulation, non-petrochemical units

🌾

Food Processing

Large food plants, dairy, cold chain, grain mills

🏭

Cement / Glass

Cement plants, float glass facilities, kilns

📄

Paper / Pulp

Integrated paper mills, pulp plants, tissue units

🧵

Textile Mills

Integrated spinning, weaving, dyeing, finishing

⚡

Power Generation

Thermal, hydro, wind power plants, distribution

🚗

Auto / Engineering

Auto component plants, heavy engineering, defence

IAR is a Package Policy — 4 Sections, 3 Mandatory, 1 Optional

The Four Sections of IAR — Mandatory vs Optional

IAR cannot be cherry-picked — the insured cannot take only Section I without Section II, or take fire material damage without machinery breakdown. Three of the four sections are compulsory. Only Machinery Loss of Profits (MLOP) is optional.

🔥
Section I-A· Material Damage

Fire and Allied Perils — All Risk Basis

Physical damage to building, P&M, stocks, FF&E from fire and allied perils — on All Risk basis. Includes earthquake (in-built), RSMD, flood, accidental damage, subterranean fire, and all unexcluded causes.

✔ COMPULSORY
⚙️
Section I-B· Material Damage

Machinery Breakdown / Boiler / EEI

Sudden and unforeseen mechanical or electrical breakdown of all P&M, boiler explosion, pressure vessel failure, electronic equipment failure. SI = P&M under I-A less piping/cabling. Cannot take IAR without this.

✔ COMPULSORY
💼
Section II-A· Business Interruption

Fire Loss of Profits (FLOP)

Loss of Gross Profit + Increased Cost of Working when business is shut due to Section I-A (fire/allied) damage. SI: Annual Gross Profit × indemnity period. Deductible: 3 days GP or ₹5L minimum.

✔ COMPULSORY
🔧
Section II-B· Business Interruption

Machinery Loss of Profits (MLOP)

Loss of Gross Profit when business is shut due to Section I-B (machinery breakdown) — NOT fire. Essential for businesses where machine failure (not just fire) would halt operations. Pharma, steel, paper mills, cement.

⚙ OPTIONAL
💡

MLOP is the ONLY Optional Section in IAR — All Others are Compulsory

Unlike every other product in this series (BSUS+/BLUS+ had 12 optional covers to toggle), IAR has just 4 sections — and the insured CANNOT choose to take only some of them. Sections I-A, I-B, and II-A are mandatory from inception.

The only decision is whether to add Section II-B (MLOP) — Machinery Loss of Profits. For any manufacturing enterprise where a machine breakdown (not fire) would halt production for weeks or months, MLOP is strongly recommended.

Examples where MLOP is essential: Paper mill headbox failure (60+ days downtime), pharma centrifuge breakdown (pharmaceutical batch production halted), cement kiln mechanical failure (8+ weeks repair), steel blast furnace pump failure (18 days shut).

📊

How Section II SI is Calculated — Annual Gross Profit × Indemnity Period

Annual Gross Profit: The difference between turnover and the variable costs that cease when the business is shut. This is the basis of the BI Sum Insured.

Indemnity Period: The maximum period during which BI loss is payable — chosen at inception based on how long it would realistically take to (a) physically repair/rebuild the insured property AND (b) recover revenue to pre-loss levels. For large industrial plants: typically 12–36 months.

Example: Annual Gross Profit ₹120Cr; 12-month indemnity period chosen → Section II-A SI = ₹120Cr. 24-month period chosen → SI = ₹240Cr. Always choose an indemnity period that covers the full rebuild + revenue recovery time.

What IAR Covers — All Risk Means Everything Unless Excluded

IAR Coverage — The All Risk Scope

IAR does NOT list covered perils. Instead, it covers ALL sudden and unforeseen physical loss or damage to insured property — unless the cause is in the excluded causes list. Practically, the following are covered without requiring specific named perils:

🌍

⚡ Earthquake is IN-BUILT Under IAR — No Separate Add-On Required

Under the Standard Fire & Special Perils Policy (SFSP), earthquake must be specifically added as an optional extension at extra premium. Under the IAR All Risk policy, earthquake damage is within the ALL RISK base scope — it is covered automatically without any additional premium.

For large industrial enterprises in India's seismically active zones (III, IV, V) — covering most of peninsular India, Himalayan belt, Gujarat, Northeast India, and Kashmir — IAR's automatic earthquake coverage is one of its most significant advantages over SFSP.

🔒

Burglary Covered Under IAR — Unlike SFSP Which Doesn't Cover Theft

Standard SFSP does NOT cover standalone theft or burglary. IAR includes Burglary as a mandatory sub-cover under Section I-A Material Damage:
→ Physical damage to property by burglary or attempted burglary (breaking and entering)
→ Actual theft of insured assets during a break-in
→ Loss of stock during a burglary event

This is particularly significant for large industrial plants where valuable metals, pharma ingredients, or electronic components may be targets. One IAR policy covers fire AND burglary — SFSP alone does not.

🔥

Fire & Allied — All Risk Basis

  • ✔Fire (accidental) — incl. spontaneous combustion, natural heating (broader than SFSP)
  • ✔Lightning — all electrical and structural damage
  • ✔Explosion / implosion (boilers, pressure vessels)
  • ✔Aircraft damage + sonic boom
  • ✔Storm, cyclone, typhoon, tempest, flood, tsunami, inundation
  • ✔Earthquake — IN-BUILT (no add-on unlike SFSP)
  • ✔Subsidence / landslide / rockslide
  • ✔RSMD (Riot, Strike, Malicious Damage)
  • ✔Impact damage (vehicles, rail, animals, falling trees)
  • ✔Burst water tanks / pipes / sprinkler leakage
  • ✔Accidental damage (any external cause not excluded)
  • ✔Subterranean fire (underground fire — not covered in SFSP)
⚙️

Machinery Breakdown (Section I-B)

  • ✔Sudden and unforeseen electrical breakdown of any insured machine
  • ✔Sudden and unforeseen mechanical breakdown from internal failure
  • ✔Boiler explosion / pressure vessel rupture
  • ✔Electronic Equipment Insurance (EEI) — computers, servers, control systems, PLCs
  • ✔All P&M failure from any internal cause not in excluded causes list
  • ✔On-site transit damage — machinery damaged during internal relocation (crane lifts, shop-floor movement)
🔒

Burglary (Section I-A sub-cover)

  • ✔Physical damage from burglary or attempted burglary (forced entry, broken locks, damaged doors)
  • ✔Theft of insured assets during a break-in (metals, pharma stock, electronic equipment)
  • ✔Loss of stock during a burglary event at insured premises
  • ✔Damage to building structure from attempted break-in
💼

Business Interruption (Section II)

  • ✔Fire LoP (II-A — MANDATORY): Loss of Gross Profit when business shut due to fire / allied peril damage
  • ✔Increased Cost of Working — extra expenses to minimise BI loss (temporary premises, overtime)
  • ✔Machinery LoP (II-B — OPTIONAL): Loss of Gross Profit when business shut due to machinery breakdown damage
  • ✔Indemnity period: 12–36 months as chosen at inception
  • ✔Annual Gross Profit basis — audited P&L accounts used for settlement
⚠️ Based on the insurer IAR product page, GIC Council Annexure V IAR Operative Clause, IAR Tariff document, and authoritative IAR market wordings. Refer to your policy document for complete exclusions. Probitas Insurance Brokers Pvt. Ltd. (Lic. No. 528) is an IRDAI-licensed broker.

Sum Insured Basis + Compulsory Deductibles + 15% Tolerance

Sum Insured Structure + Deductible Calculator

🏗️

Reinstatement Value Mandatory for IAR — New for Old (No Market Value Option)

Unlike SFSP where the insured can choose Market Value (depreciated) or Reinstatement Value, IAR mandates Reinstatement Value (New for Old) for buildings, plant, machinery, furniture, fixtures, fittings, and electrical installations. There is no Market Value option for fixed assets under IAR.

Stocks and stocks-in-process are covered on Market Value at time of loss. Note: unlike SFSP which offers Declaration Policy and Floater for fluctuating stocks, IAR does NOT have a stock declaration facility — stocks must be insured at their estimated market value at inception.

⚠️

No Stock Declaration Policy Available Under IAR — Declare at Market Value

SFSP offers Declaration (monthly declarations, year-end premium adjustment) and Floater (multi-location) stock policies — ideal for businesses with highly fluctuating stock. IAR does NOT provide a stock declaration facility. Stocks must be declared at their estimated market value at inception. If your stocks fluctuate significantly, discuss with Probitas how to set a prudent stock SI that avoids underinsurance without excessive premium.

⚖️

15% Underinsurance Tolerance Per Item — More Generous Than SFSP

IAR has a condition of average — but with a 15% tolerance per item in the schedule. Underinsurance on any single item will be IGNORED if it does not exceed 15% of the Sum Insured for that item.

Comparison:
→ SFSP: No automatic tolerance — full average applies from the first rupee of underinsurance
→ IAR: 15% per-item tolerance — minor underinsurance (up to 15%) is ignored
→ Bharat products: 85% threshold waiver — no average if SI ≥ 85% of actual value

If an item is underinsured by more than 15%, the Average Clause applies to that item. Maintain accurate reinstatement value declarations to stay within tolerance.

⚡ IAR Deductible Calculator — Section I: 5% of Claim (Min ₹5L / Max ₹50L)

Claim Amount
₹0
Deductible (5% / min ₹5L / max ₹50L)
₹0
Net Payable to Insured
₹0
100%
■ Insurer pays■ Deductible (you pay)
💡 IAR Deductible Context: The ₹50 lakh maximum deductible is designed for large industrial claims. On a ₹50Cr claim, the deductible is ₹50L — just 1% of the claim. On a ₹200Cr claim, still ₹50L — 0.25%. This makes IAR deductibles proportionally very manageable for large industrial losses, unlike SFSP's uncapped Average Clause. Section II (BI) deductible: 3 days Gross Profit (min ₹5L / max ₹50L) per claim.
Claim Amount5% DeductibleMin/Max Applied?Net Payable% of Claim as Deductible
₹30,00,000₹1,50,000↑ Min ₹5,00,000 applies₹25,00,00016.7%
₹1,00,00,000 (₹1Cr)₹5,00,000At minimum exactly₹95,00,0005%
₹10,00,00,000 (₹10Cr)₹50,00,000↓ Max ₹50L applies₹9,50,00,0000.5%
₹50,00,00,000 (₹50Cr)₹50,00,000↓ Max ₹50L applies₹49,50,00,0000.1%
₹200,00,00,000 (₹200Cr)₹50,00,000↓ Max ₹50L applies₹199,50,00,0000.025%
💰

Voluntary Deductible for Premium Discount

Large industrial enterprises with strong balance sheets and good risk management can opt for higher voluntary deductibles to earn a premium discount. Higher deductible = lower annual premium. Discuss the optimal deductible level with Probitas at 022 4302 0000 based on your cash flow, claims history, and risk management capability.

Premium Determination — Negotiated Risk Assessment (Not Tariff-Based)
🏭

Industry & Occupancy

Type of industrial process, raw materials, finished goods — fire and explosion risk profile

🔥

Fire Protection Systems

Sprinklers, hydrants, detection systems, 24-hour fire watch — better systems = lower premium

🔧

Maintenance Practices

Planned preventive maintenance, machinery service records, loss prevention culture

📋

Claims History

Last 5–10 years of claim data across all locations — clean record = significant discount

🌍

Location Risk

Seismic zone, flood zone, RSMD/terrorism exposure, proximity to industrial hazards

🎛️

Deductible Level

Higher voluntary deductible = lower premium. Risk assessment report prepared by the insurer for large risks

Full Feature Comparison

IAR vs SFSP — Complete Comparison

Feature⚡ IAR — This Product (All Risk)🔥 SFSP (Named Perils)
Coverage philosophyALL RISK — covers everything unless excludedNamed Perils — 11 specific events; rest excluded
EarthquakeIN-BUILT — All Risk scope; no add-onADD-ON — extra premium required
Burglary / TheftCOVERED — mandatory Section I-A sub-coverNOT covered (standalone theft excluded)
Machinery BreakdownMANDATORY — Section I-B (cannot exclude)Separate standalone add-on (optional)
Fire Loss of Profits (BI)MANDATORY — Section II-A (cannot exclude)Separate attached policy (optional)
Machinery Loss of ProfitsOPTIONAL — Section II-BNot standard
Accidental DamageCOVERED — All Risk basis (any unexcluded cause)NOT in SFSP base
Subterranean fireCOVERED — All Risk scopeNOT covered in SFSP
On-site transit damageCOVERED — internal relocation/crane damageNOT covered
Spontaneous combustionCOVERED — All Risk scopeAdd-on required under SFSP
Minimum SI₹100 crore+ (combined across locations)No minimum — any SI
Petrochemical risksEXCLUDED — separate Petrochem TariffCan cover
Deductible5% of claim / min ₹5L / max ₹50L per claimAverage Clause (uncapped)
Underinsurance tolerance15% per item tolerance before average appliesNo tolerance — full average from first rupee
Reinstatement ValueMANDATORY — always New for Old for fixed assetsOptional — choose Market Value or RVB
Stock declarationNOT available — market value at time of lossDeclaration and Floater policies available
Number of policies neededONE integrated IAR policyTHREE (SFSP + Machinery BD + Fire LoP)
Premium basisNegotiated — risk assessment report; no tariffTariff-based (AIFT 2001) + de-tariffed flexibility
🤔

When to Choose IAR Over SFSP

  • Choose IAR if:Total SI ≥ ₹100 crore; you want All Risk basis (broadest coverage); you want one integrated policy (not 3 separate); you want earthquake and burglary automatically covered; your business has significant machinery where breakdown BI is a risk; you prefer simplicity of All Risk over named-perils complexity
  • Choose SFSP if:SI is below ₹100 crore; you need Declaration/Floater stock policies with large fluctuating stock; you need to insure Kutcha/under-construction property; you want to delete specific perils for premium discount; your risk is a petrochemical complex (excluded from IAR)

Call 022 4302 0000 — our industrial property specialist will assess your risk, SI, and coverage needs to recommend IAR vs SFSP vs BLUS+ for your specific enterprise.

Who Can Buy IAR — Eligibility Rules

Eligibility — ₹100 Crore Minimum + Industry Qualifiers

💰

₹100 Crore Minimum SI — Calculated Across ALL Locations

The minimum SI for IAR eligibility is ₹100 crore across ONE OR MORE LOCATIONS in India. This means:

→ A single plant worth ₹150Cr → eligible
→ 4 plants each worth ₹30Cr (total ₹120Cr) → eligible
→ 2 plants each worth ₹45Cr (total ₹90Cr) → NOT eligible; use SFSP for these

After de-tariffing, some insurers (including the insurer at their discretion) may offer IAR for SI as low as ₹50 crore. Discuss with Probitas at 022 4302 0000 for borderline SI situations.

⛽

Petrochemical Risks are EXCLUDED from IAR — They Have a Separate Tariff

Refineries, petrochemical complexes, and risks rateable under the Petrochemical Tariff are specifically excluded from IAR eligibility. These highly specialised industrial risks are covered under a separate Petrochemical Insurance framework with distinct underwriting and risk assessment processes. If your enterprise includes a petrochemical unit alongside non-petrochemical manufacturing, separate policies are required for each segment. Call Probitas 022 4302 0000 for guidance on mixed-risk facilities.

📋 Who Can Buy IAR

How to File an IAR Claim

Claim Process — 6 Steps

📊

Section II (BI) — Start Maintaining Daily Production Records from Day 1

BI claims require comprehensive financial evidence. From the moment any insured event occurs that may trigger Section II: maintain daily production records, record all increased cost of working expenses, keep records of all standing charges paid during shutdown. Financial accounts must be maintained meticulously. For large IAR Section II claims, engage a specialist Loss Assessor from day 1 — they will help structure the BI evidence for the insurer's surveyor.

🚫

Do NOT Dismantle or Repair Machinery Before Surveyor Inspection

For Section I-B (Machinery Breakdown) claims: do NOT attempt to repair the broken machine, dismantle it for parts, or disturb the failure zone before the insurer's technical engineer has inspected the machine and analysed the failure cause. The root cause analysis (electrical vs mechanical, which component failed first) is essential for settlement. Preserve all failed components and failure evidence.

⚠️

Deductible Reminder — 5% (Min ₹5L / Max ₹50L) on Every Section I Claim; 3-Day GP on Every Section II Claim

Every IAR Section I (Material Damage) claim carries a compulsory 5% deductible (minimum ₹5 lakh, maximum ₹50 lakh). Every Section II (BI) claim carries a 3-day Gross Profit deductible (minimum ₹5 lakh, maximum ₹50 lakh). Plan for both when evaluating claim quantum.

📢

Notify Immediately

Call 022 4302 0000 as soon as any loss occurs. Fire/explosion: fire brigade + FIR. Burglary: FIR mandatory. Machinery breakdown: do NOT dismantle before engineer inspection. BI Section II: start daily production records from this moment.

📸

Preserve & Document

Photograph and video ALL material damage. Do NOT carry out permanent repairs before surveyor inspection. Preserve broken machinery parts for technical root-cause analysis. Preserve burglary crime scene. Temporary safety measures are permitted — document all costs.

📋

Maintain BI Records (Section II)

Daily production records from Day 1. All increased cost of working expenses. Standing charges paid during shutdown. Revenue and turnover records. Any actions taken to minimise BI loss. Audited P&L accounts will be needed for final settlement.

🔍

Surveyor / Loss Adjuster

IRDAI-licensed surveyor for all claims. For large IAR claims (₹10Cr+): specialist industrial loss adjustor firm appointed. Technical engineer for Section I-B root-cause analysis. Section I and Section II may be assessed simultaneously by coordinated surveyors.

📤

Submit Documents

Claim Form (Sec I and/or II) + Policy + Photos/Video + Surveyor report + Repair estimates + FIR/Fire Brigade report + Machine failure technical report (I-B) + Audited P&L accounts + Daily production records + Standing charges schedule + Valuation report + Bank details (NEFT).

✅

Settlement

Section I: Reinstatement Value (New for Old) for fixed assets; Market Value for stocks. 5% deductible (min ₹5L / max ₹50L) deducted. 15% per-item underinsurance tolerance applies. Section II: Annual GP × indemnity fraction; 3-day GP deductible. IRDAI TAT: 30 days from complete documents.

IAR in Action — Crore-Scale Industrial Claims

3 Illustrative IAR Claim Scenarios

📐 Three IAR-Specific Crore-Scale Scenarios

ParameterSteel Plant Fire + MB + BI (Jamshedpur)Pharma Plant Earthquake + Burglary (Ahmedabad)Paper Mill Machinery Breakdown + MLOP (Kolkata)
CompanyJSK Steel Ltd., integrated steel plant, JamshedpurPharmaCore Mfg. Pvt. Ltd., API plant, Sanand, AhmedabadHooghly Paper Mills Ltd., integrated paper mill, Kolkata
IAR SI₹850 crore (3 locations combined)₹280 crore₹420 crore
SectionsI-A + I-B + II-A (Fire LoP 12M) + II-B (MLOP opted)I-A + I-B + II-A + II-B (MLOP opted)I-A + I-B + II-A + II-B (MLOP critical)
Event 1Electrical fire in Rolling Mill — 3 machines (₹180Cr) destroyed; building ₹45Cr damage; plant shut 12 monthsGujarat earthquake damages API production building and 5 reactors — earthquake IN-BUILT in IAR, no add-on neededMain paper machine (₹95Cr) suffers catastrophic headbox breakdown — NOT fire, pure internal mechanical failure; 60 days downtime
Section I ClaimP&M: ₹1,80,00,00,000 (RVB)
Building: ₹45,00,00,000 (RVB)
Stocks (billets): ₹28,00,00,000 (MV)		P&M (5 reactors): ₹65,00,00,000 (RVB)
Building: ₹22,00,00,000 (RVB)
API Stocks: ₹18,00,00,000 (MV)		Machinery Breakdown (I-B): ₹12,00,00,000 (headbox repair)
Section II ClaimFire LoP (II-A): ₹72,00,00,000 (12M GP loss)Fire LoP (II-A): ₹36,00,00,000 (8M GP loss)MLOP (II-B, 60 days): ₹30,00,00,000 (machine downtime GP)
ExtensionsProfessional fees: included (IAR extension)
Debris removal: included		Debris: included

Event 2: Post-earthquake burglary steals ₹8Cr finished API → Burglary (I-A): ₹8,00,00,000 — SFSP would NOT cover this		Note: Under SFSP + standalone Machinery BD: same claim but TWO separate policies, two surveyors, two claims processes. IAR: ONE policy covers both.
5% Deductible (Sec I)(₹50,00,000) — max applies(₹50,00,000) — max applies on Sec I
(₹40,00,000) on burglary claim		(₹60,00,000) → max ₹50,00,000 applies
3-Day GP Deductible (Sec II)(₹50,00,000) — max applies(₹50,00,000) — max applies(₹50,00,000) — max applies
Total Net Settled~₹3.24 Crore (Event 1)
Separate MLOP if II-B opted		~₹1.42 Crore (Event 1+2 combined)₹40,90,00,000 (~₹41Cr)
Why SFSP would be worseUnder SFSP: no integrated Machinery LoP; 3 separate policies; uncapped average clause riskUnder SFSP: earthquake would have cost extra add-on; burglary NOT covered at all under SFSPUnder SFSP + standalone MB: two policies, two surveyors, no MLOP without explicit second attached policy

* Illustrative only. Actual settlement subject to policy terms, surveyor assessment, 5% deductible (min ₹5L / max ₹50L per claim), 15% underinsurance tolerance per item, and complete documentation. Section II claims require audited P&L accounts and daily production records. Total settlements shown in crores — figures rounded for illustration.

Common Questions

Frequently Asked Questions

The Industrial All Risk (IAR) Policy is the insurer's apex industrial property insurance — the most comprehensive commercial property product in the entire the insurer portfolio.

The fundamental difference:
SFSP is a Named Perils policy — it lists 11 specific events that are covered; everything not on the list is excluded. IAR is an All Risk policy — it lists only what is EXCLUDED; everything else is automatically covered.

Practical differences:
1. Earthquake: ADD-ON in SFSP (extra premium); IN-BUILT in IAR (All Risk scope)
2. Burglary: NOT covered in SFSP; COVERED in IAR (mandatory Section I-A sub-cover)
3. Machinery Breakdown: Optional add-on in SFSP; MANDATORY Section I-B in IAR
4. Fire Loss of Profits: Optional separate attached policy in SFSP; MANDATORY Section II-A in IAR
5. Accidental damage: NOT in SFSP base; COVERED in IAR (All Risk)
6. Number of policies: 3 separate in SFSP; 1 integrated in IAR
7. Minimum SI: No minimum in SFSP; ₹100Cr+ in IAR
8. Underinsurance: Uncapped Average Clause in SFSP; 15% tolerance per item in IAR
"All Risk" means the policy covers ALL physical loss or damage to insured property — UNLESS the cause is specifically listed in the Excluded Causes section.

Unlike SFSP (which asks "Is fire on the list? Yes → covered. Is earthquake on the list? No → excluded unless added"), IAR asks only one question: "Is my loss cause in the excluded causes list?" If the answer is NO → the loss is COVERED automatically.

Practically, IAR's all-risk scope includes everything SFSP covers (fire, flood, RSMD, etc.) PLUS:
• Earthquake (without needing a separate add-on)
• Burglary and theft during break-in
• Accidental damage from any external cause not excluded
• Spontaneous combustion (excluded as a fire peril under SFSP)
• Subterranean fire (underground fire beneath premises)
• On-site transit damage (machinery damaged during internal relocation)
• Virtually any other sudden and unforeseen physical cause not in the exclusion list

The burden of proof shifts: in SFSP, the insured must prove the cause is a named peril. In IAR, the insurer must prove the cause is in the excluded list.
All industrial/manufacturing risks (other than risks rateable under the Petrochemical Tariff) with an overall Sum Insured of ₹100 crore and above across one or more locations in India are eligible for IAR.

Key points:
• The ₹100Cr minimum is across ALL locations combined — not per location
• 4 plants each worth ₹30Cr (total ₹120Cr) → eligible
• 1 plant worth ₹80Cr → NOT eligible at ₹100Cr threshold; use SFSP
• After de-tariffing, the insurer may offer IAR for SI as low as ₹50Cr at their discretion

Who is eligible: Steel, pharma (non-petrochem), food processing, cement, paper, textile mills, power plants, engineering, auto component manufacturers

Who is NOT eligible: Petrochemical risks (refineries, chemical complexes rateable under Petrochemical Tariff) — they have a separate Petrochemical Tariff; residential properties (use BGR); small commercial enterprises (use BSUS/BLUS)
IAR is a package policy — unlike BSUS+/BLUS+ where you could choose from 12 optional covers, IAR's sections cannot be cherry-picked. Three are mandatory; one is optional:

MANDATORY (cannot be excluded):
→ Section I-A: Fire Material Damage (All Risk basis) — building, P&M, stocks
→ Section I-B: Machinery Breakdown Material Damage — sudden electrical/mechanical failure, boiler, EEI
→ Section II-A: Fire Loss of Profits (FLOP) — BI from fire/allied peril damage

OPTIONAL (choose at inception):
→ Section II-B: Machinery Loss of Profits (MLOP) — BI arising from machinery breakdown

MLOP is the ONLY optional component in IAR. For any manufacturing enterprise where machine failure (not just fire) would halt operations for extended periods — pharma, steel, paper mills, cement — MLOP is strongly recommended alongside the mandatory sections.

The insured also cannot take Section I without Section II — fire material damage must always be accompanied by Fire Loss of Profits.
IAR has a compulsory deductible structure — the insured must absorb the first portion of every claim:

Section I (Material Damage) deductible:
→ 5% of the claim amount
→ Minimum: ₹5 lakh per claim
→ Maximum: ₹50 lakh per claim

Examples:
• ₹30L claim → 5% = ₹1.5L; minimum ₹5L applies → insured pays ₹5L; insurer pays ₹25L
• ₹1Cr claim → 5% = ₹5L; at minimum exactly → insured pays ₹5L; insurer pays ₹95L
• ₹50Cr claim → 5% = ₹2.5Cr; maximum ₹50L applies → insured pays ₹50L; insurer pays ₹49.5Cr
• ₹500Cr claim → 5% = ₹25Cr; maximum ₹50L still applies → insured pays ₹50L; insurer pays ₹499.5Cr

Section II (BI) deductible: 3 days Gross Profit (minimum ₹5L; maximum ₹50L)

Voluntary deductible: Choosing a higher voluntary deductible earns a premium discount.

The ₹50L maximum deductible makes IAR very different from SFSP's uncapped Average Clause — on a ₹100Cr IAR claim, the deductible is just ₹50L (0.05%). On a ₹500Cr claim, still ₹50L (0.01%). IAR deductibles are highly manageable for large industrial claims.
Yes — earthquake is automatically covered under IAR without any separate add-on or extra premium.

This is one of the most important differences from SFSP:
• SFSP: Earthquake must be specifically added as an "Earthquake (Fire and Shock)" extension at extra premium. Many SFSP policyholders in India miss this and discover their earthquake damage is not covered.
• IAR: The All Risk basis means ALL physical loss or damage is covered unless specifically excluded. Earthquake damage is NOT in the excluded causes list → therefore automatically covered.

India has 5 seismic zones. Most of peninsular India, Gujarat, the Himalayan belt, Northeast India, and Kashmir fall in moderate to very high seismic risk zones (III, IV, V). For large industrial plants in these zones (steel plants in Jharkhand/Odisha, pharma plants in Gujarat, cement plants in Rajasthan), IAR's automatic earthquake coverage is a significant financial advantage over SFSP + earthquake add-on combination.

For IAR policyholders, this means: a Gujarat earthquake damaging a ₹280Cr pharma plant is covered automatically — no separate extension needed, no additional premium, no coverage gap risk from forgetting the add-on.
This is a critical difference between IAR and SFSP:

SFSP: Does NOT cover standalone burglary or theft. Theft is only covered within 7 days of a preceding insured event (like theft during/after a fire) — and even then, only under specific conditions. Standalone break-in and theft is completely excluded from SFSP. For burglary protection under SFSP, a separate Burglary Insurance Policy must be purchased.

IAR: Burglary is included as a mandatory sub-cover within Section I-A Material Damage. IAR covers:
• Physical damage to the building structure from a break-in (broken doors, locks, walls)
• Actual theft of insured assets during the burglary (metals, pharma API, electronic equipment)
• Loss of stock during a burglary event at the insured premises

For large industrial plants, burglary risk is real:
• A pharma plant may hold ₹8–20Cr of valuable API ingredients
• A steel plant may have high-value copper and metal components
• Electronic equipment and computers in a factory can attract theft

Under IAR, all of these are covered in the same policy as fire, earthquake, and business interruption — no separate burglary policy needed.
Machinery Loss of Profits (MLOP) — Section II-B — is the ONLY optional section in IAR. It covers loss of Gross Profit when the business is shut or impaired due to Section I-B (Machinery Breakdown) damage — specifically when a machine fails from its own internal fault, NOT from a fire or allied peril.

Why MLOP is distinct:
Section II-A (Fire LoP — mandatory): Covers BI only when fire/allied peril damages insured property
Section II-B (MLOP — optional): Covers BI specifically when MACHINERY FAILS internally

Why industrial businesses should opt for MLOP:
In most industrial enterprises, machine failure (not fire) is statistically more likely to cause a production shutdown:
• Paper mill: Headbox assembly fails → 60 days downtime → ₹30Cr gross profit loss. If MLOP not opted: ₹0 BI cover (Section II-A doesn't trigger for machinery breakdown).
• Steel plant: Blast furnace cooling pump fails → 18 days downtime → ₹12Cr loss. Without MLOP: ₹0 BI.
• Pharma plant: Centrifuge mechanical breakdown → production halt for 45 days. Without MLOP: physical damage covered (Section I-B) but income loss not covered.

MLOP SI and deductible are structured same as Fire LoP — Annual Gross Profit × indemnity period; 3-day GP deductible. For any machine-dependent industrial enterprise, MLOP is near-essential.
IAR has different SI basis rules for different asset categories:

Fixed Assets (Building, P&M, FF&E, Electrical) — Reinstatement Value MANDATORY:
Unlike SFSP (where you can choose Market Value or Reinstatement Value), IAR mandates Reinstatement Value (New for Old) for all fixed assets. This means: in the event of a loss, IAR pays the full cost of reinstatement with new equivalent assets — no depreciation deducted. A 10-year-old machine worth ₹50Cr new is settled at ₹50Cr (new equivalent cost), not at depreciated market value.

Stocks and Stocks-in-process — Market Value ONLY:
Stocks are covered at their market value at the time of loss — NOT on declaration basis. Note: Unlike SFSP which offers Declaration Policy (monthly declarations, year-end adjustment) and Floater Policy (multi-location), IAR does NOT provide a stock declaration facility. The stock SI must be declared at inception at the estimated market value. If stock levels fluctuate significantly, discuss the appropriate SI level with Probitas to avoid underinsurance.

Section II (BI) SI:
Annual Gross Profit × indemnity period chosen (in months/12). Example: Annual GP ₹120Cr, 12-month indemnity period → Section II SI = ₹120Cr. Choose the indemnity period to reflect the full rebuild time + revenue recovery time.
Several compelling reasons favour IAR over the SFSP combination for ₹100Cr+ industrial enterprises:

1. Broader coverage — All Risk vs Named Perils:
SFSP with add-ons still only covers named perils + specifically added extensions. IAR's All Risk basis covers every unexcluded cause — including spontaneous combustion, accidental damage, subterranean fire, and other causes that would require specific SFSP endorsements.

2. Earthquake automatically included:
SFSP requires the earthquake extension at extra premium (and some policyholders forget it). IAR includes earthquake automatically.

3. Burglary covered in one policy:
SFSP + Machinery BD + Fire LoP = still no burglary. A 4th separate Burglary policy is needed. IAR covers burglary within Section I-A.

4. Single policy, single renewal, single surveyor:
A major IAR loss triggers one surveyor who assesses Section I AND Section II together. Under SFSP approach: three separate surveyors from three separate insurers may be involved, creating coordination delays and settlement complexity.

5. More generous underinsurance handling:
IAR has 15% per-item underinsurance tolerance (minor underinsurance is forgiven). SFSP has no tolerance — the Average Clause applies from the first rupee of underinsurance.

6. Often more cost-effective:
For large ₹100Cr+ risks with good loss history and fire protection, a single negotiated IAR premium is often more competitive than three separate tariff-based premiums.

Call 022 4302 0000 for a comparative IAR vs SFSP premium analysis for your specific industrial enterprise.

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🏭 Company & Risk Details
📦 Sum Insured Breakdown (Reinstatement Value Basis)
🔥 Fire Protection Systems (affects premium)
📋 IAR Sections Required
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⚡ All Risk Industrial Protection — One Policy Replacing Three

Earthquake in-built. Burglary covered. Machinery Breakdown mandatory. Fire + Machinery BI. ₹100Cr+ industrial enterprises. Call 022 4302 0000.

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