Factory Insurance - Warehouse Stock Insurance Policy for Godown India

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Advantages of Factory and Warehouse Insurance

Comprehensive Cover

Offers wide range of insurance cover to your assets across warehouse, factory, and office. Cover available for physical damage to assets, loss of profits due to business interruption, and third party legal liability.

Multiple Location Coverage

A single factory & warehouse insurance policy can cover contents at various locations across the country. Variation in sum assured across locations can be accounted via floater coverage for fire insurance

Customized Cover

We will customize the policy to fit your requirements. You will get assistance from our experts who perform a thorough risk assessment and suggest factory insurance plans suitable to your business needs.

Easy Documentation

Issuance of factory insurance requires minimal paperwork. You could submit the Fixed Asset Register maintained for your book-keeping. Unit wise serial numbers are needed only for portable equipment.

Benefits of Factory and Warehouse Insurance

Wider Array of Risks

Insurance covers damage due to fire, lightning, burglary, theft and natural catastrophes such as flood, and earthquake
Cover could be enhanced by opting for add-ons such as impact damage due to the insured's own vehicles, and terrorism
Portable electronic equipment could be covered for specific losses such as short-circuit, breakdown and theft while travelling abroad.

Indemnification for Increased Expenses

Factory and warehouse insurance can provide replacement cost of damaged property instead of the book value. This can be done through the escalation and reinstatement value clauses
Standard fire and special perils policy can pay rent for alternate accommodation in case the factory is damaged
Air freight add-on can help expedite the arrival of replacement materials.

Comfort to Lenders

Bank clause can be added to stock insurance policy; in case of damage to mortgage assets, lenders are indemnified
Business interruption loss or Fire Loss of Profit insurance will reimburse the standing expenses and net profits for the period of disruption; this ensures debt is serviced regularly
FLOP insurance could be extended to cover disruption in a supplier's premises.

Frequently Asked Questions

Factory and warehouse insurance covers all your contents and stocks by various risks such as fire, explosion, implosion, natural calamities like earthquake, flood, storm. Then there are additional coverages such as burglary & theft, mechanical & electronic breakdown, all risk laptop insurance and money insurance which can also be covered under factory insurance.

One of the major advantage of factory and warehouse insurance is that a single umbrella policy can cover many risks. A third party bodily injury and property damage in your factory insurance can also be covered along with other basic coverages in factory insurance policy. Policy would pay the lawyer's fees to defend third party claims, and compensation awarded by the court.

There are various add-ons available under the factory and warehouse policy such as :

Fidelity cover

Plate glass cover

Neon sign

Fire loss of profit

Rent for alternative accommodation

Public liability

Terrorism

Cash in safe and cash in transit

Machinery breakdown

Burglary insurance

Theft insurance.

Factory and warehouse insurance policy does not cover intentional damage to the property, damage to the property due to illegal activities and consequential loss. Normal wear and tear due to deterioration are also excluded from the policy. Other common exclusions includes damages due to war, radioactive contamination and pollution.

When claims arise, you need to intimate the insurer immediately. A surveyor would be appointed who would visit the accident site for a survey. You would then need to submit a claim form, invoices and other documents required by the insurance company to process the claim.

In case of loss or damage to the factory due to fire, claims can be settled in two ways. In case of damage which can be repaired, the cost of repairs to restore the item to its original conditioned is paid. In case of total damage or loss, the total value of the item will be paid by the insurance company. In case of loss of stock, the total cost of stock or market value, whichever is lower would be paid.

The common documents required for filing the claim are:

Duly filled claim form

First information report

Final investigation report

Invoice copy of the damaged asset

Forensic report, in select cases

Fire brigade report (in case of fire)

Estimate cost of repair or lost product

In addition to these documents, the insurer can ask for some additional documents based on the type of claim.

Under reinstatement value policies, loss is settled based on the current cost of reinstating the asset to its form immediately prior to loss. Under market value policies, depreciation is deducted for the number of years the asset was in use.

The premium rate of your factory insurance is calculated on the basis of risk that includes location of the factory or plant, history of past claim settlements, size of the company and nature of business. In addition to these factors, premium is charged on add-ons that you select.

Yes, you can cover new factory which you have purchased or built after policy placement. In such cases, you need to do endorse these assets in the policy by paying an extra premium. It is advisable to maintain a cash deposit with the insurer, which is an additional amount, so that the policy can cover any addition from day one.

The factors which would result in getting a low price are as follows :

No or low claim history in last three years.

Having fire safety measures at the site such as Hand-Held Equipment, Hydrants, Sprinklers and extinguisher.

Other security measures like CCTV cameras, 24*7 security guards

Having low or no basement exposure.

Having AMC for machines and equipment.

Premium for most of the commercial insurance policies are to be paid on annual basis. This is a common practice across by all the insurance companies. Only in a few cases insurers allow installment premium payment, such cases has to have an annual premium size of 50 lakhs or above.

Yes. To cover loss of profit due to a fire and other related perils, you should take a policy called fire loss of profit(flop). Similarly, if there is a loss of revenue due to mechanical breakdown of machines then you can claim revenue lost in machine loss of profit(MLOP) policy.

The factory and warehouse insurance policy is particularly preferred by manufacturers, wholesalers, distributors, and retailers to cover their stock which could be of raw material, semi finished and finished goods, and other contents like machinery, furniture and owned building. If you are a producer or a supplier of goods, you should consider this policy in order to cover various risks your business is exposed to.

There are three types of stock insurance which can be availed to suit your business requirements:

Floater Policy - This policy covers stocks at various locations. A single aggregate sum assured could be taken to cover stock at multiple locations.

Declaration Policy - If there is a fluctuations in stocks or stock values, you can consider taking declaration policy. Here premium is adjusted based on the actual value of stock declared

Floater Declaration policy - This policy has the feature of both floater and declaration policy.

Under the default fire insurance, claims are settled on market value basis. This means that claims are settled based on the cost of reinstating these assets today less the depreciation deducted for number of years of usage. If the reinstatment clause is opted under the standard fire and special perils policy, depreciation would not be deducted and claims will be settled on reinstatement cost.

Insuropedia

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Factory & Warehouse Insurance