Property Insurance

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Factory and Warehouse insurance policy does not cover the following:

  • Short Circuiting: Any mishap including fire due to short circuit is not covered in the particular policy.
  • Deterioration: As we know everything has a time limit and depredation is a natural process, hence the gradual deterioration of the machinery or the loss due to seepage and pollution over the years is not covered under this insurance.
  • War & Allied Perils: Any damage to the factory or the warehouse due to an ongoing war or an event which is caused by an ongoing war is excluded.
  • Radiation Damage: Damage to equipment or goods due to radiation and ionization.

Apart from the perils some types of goods may also be excluded from the policy:

  • Manuscripts (can be insured by declaration and additional premium)
  • Cold storage stock damaged due to change in temperatures

Click here to know what is covered under factory and warehouse insurance

Case on Factory & Warehouse Insurance Exclusions

Surjeet Chouhan, runs three warehouses in one of the most fertile regions of Haryana and Punjab. Two of these warehouses have cold-storage facility to store vegetables and other perishable goods before they can be moved out for sale.

Last month, Chouhan Storage Facilities Pvt. Ltd. Filed a claim under factory and warehouse insurance for the damaged items inside the warehouse, which was rejected after investigation by the insurance officer on the following grounds:

  • Approximately 50% of the damaged goods were due to faulty storage which caused the temperature around the goods to remain high turning them stale.
  • Remaining material was damaged because in the five days of storage facility had multiple temperature changes, and these goods were the most affected ones. Temperature change did not result from any fault of machinery but because of an erroneous judgement of the night guard.

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