Fire Insurance for Factory: Features and Benefits

A fire insurance plan for a factory is an agreement between the insurance company and the factory owner that provides financial protection in case of a fire outbreak. It is a special kind of insurance that helps protect factories from the risks and money problems that can come with fires. If a fire damages or destroys the factory, this insurance gives the owner money to help fix things and get the business back up and running. It covers things like the buildings, machines, materials, and finished products inside the factory. 

Thus, to stay protected against fire outbreaks, it is best to buy a fire insurance plan for your factory. Read on to understand fire insurance for factories in the section below.

How Does Factory Fire Insurance Work?

Fire insurance for the factory is like any other insurance plan that provides financial compensation in case the factory or its premises is damaged due to fire outbreaks. In such a case, the insurer will pay a fixed amount to compensate for the losses. However, the financial compensation offered depends on the type of fire insurance coverage you have opted for. 

Benefits of Fire Insurance for Factory

There are multiple benefits to buying a fire insurance plan for a factory. Some of the benefits are listed below:

• If there is any damage to a property with the factory premises due to short-circuit or any kind of fire outbreak, then the necessary cover will be offered with a fire insurance policy.
• A fire insurance plan also provides coverage if there is any damage to a third party due to the fire explosion in your factory. Thus, with fire insurance for the factory, you will also enjoy coverage for third-party liabilities.
• If there is huge damage to the factory due to a fire outbreak and there is a requirement to shift to an alternate location, then also fire insurance will provide the necessary financial compensation.
• With fire insurance for the factory, policyholders can enjoy peace of mind. This is because when you know that your factory is protected against any potential fire outbreak, then you can stay stress-free.

Inclusions and Exclusions of Fire Insurance for Factory

Listed below are the inclusions and exclusions under fire insurance for the factory:

Inclusions:

• Any loss or damage to the factory in case of a fire outbreak
• Any loss or damage to a third party
• Any expenses that are spent towards alternate accommodation 

Exclusions:

• Any intentional or consequential loss
• Normal wear and tear of machines in the factory
• Any consequential loss due to a fire outbreak 

Claim Process of Fire Insurance for Factory

Follow the below-mentioned steps to claim fire insurance for the factory:

• The first step is to call a fire brigade if there is any fire outbreak
• Next, inform your insurance provider within 24 hours of the incident
• The insurer will then send a surveyor to assess the incident and the total damage that has taken place
• Then, the insurer will inform the insurance company about the total damage
• Once the claim request is approved by the insurer, the claim settlement process will get started

Now, to raise a fire insurance claim for the factory, you require certain documents such as  the following:

• Fire insurance claim form
• Fire insurance copy
• FIR
• Fire brigade report copy
• Expenses copy

Tips to Lower Fire Insurance Premium for Factory

Some of the few ways in which you can reduce the fire insurance premium for a factory are as follows:

• Avoid raising claims if there are minor damages due to a fire outbreak
• Install devices like CCTV cameras and fire alarms that will alert you of fire outbreaks
• With fire extinguishers, you can reduce the damage due to fire and reduce fire insurance premium
• Maintain AMC for the different devices installed in your factory

Take Away

Thus, buy fire insurance for your factory and stay protected against damage due to fire explosions. Before, buying a fire insurance for a factory, you must however compare the different fire insurance plans available.