Property Insurance

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Although, you may take great caution and use all the latest technology at your business premises, the possibility of accident cannot be entirely negated. Therefore, buying a fire insurance for your business is essential as well as recommended. Here are the few points that explain the importance of fire insurance for your business:

  • The risk of Massive Damage: The flames and smoke caused in the building due to fire and water used to extinguish the fire can destroy the building as well as the stock, and other goods present inside the building.
  • Financial Burden: Without fire insurance, you may face a financial crisis, which in turn makes you unable to rebuild your business due to lack of funds.
  • Restart of Business: In some cases, a fire can even lead to the complete shutdown of the firm due lack of finances to continue the business.
  • Cover Against Natural Events: The fire insurances these days instead of only covering the risk of damages caused by fire, also cover many other perils like lightning, explosion, riots, aircraft damage, etc.
  • Cover the Important and Expensive Equipment: The fire insurance policy offers protection to a wide variety of assets including the building, machinery, furniture, electrical fitting, stocks, and other accessories.

Case on Importance of Fire Insurance

Mr. Tara Singh is a well-known garment manufacturer in the city. His factory is on the outskirts of the city which is guarded 24×7 by the two guards.

One night a fire broke out in his factory. Since the guards were sleeping at that time, the fire was noticed by a passerby who alerted the guards then. The nearby fire department, as well as Mr. Singh, was informed immediately. But, it has been too late to do anything since the fire and smoke engulfed the whole factory by the time the fire department personnel reached the spot. The fire was doused, and the entire facility was ruined, and none of the stock could be saved either.

This factory was the only source of income for Mr. Singh as well as the workers who worked in the plant. But, thankfully the factory was insured against fire. Mr. Singh filed a claim with the insurance company, and it was found that fire broke out due to an electrical short circuit which was covered by insurance. The claim was approved, and Mr. Singh used the money from the insurer to reestablish the factory again.

Click here to know how to file claims under a fire insurance policy in India