Dos
1. Assess Your Risk Thoroughly
- Conduct a professional risk assessment of buildings, machinery, stock, and other assets.
- Consider location-specific risks (industrial zones, warehouses, chemical storage, etc.).
2. Disclose All Material Facts
- Provide complete details of construction, occupancy, fire safety systems, and past incidents.
- Transparency ensures valid claim settlement and prevents disputes.
3. Opt for Adequate Sum Insured
- Cover the full reinstatement/replacement value of assets, not just book value.
- Include escalation clauses to account for inflation and increased asset values.
4. Understand Policy Coverage and Add-Ons
- Study inclusions: fire, lightning, explosion, riots, floods, storm, etc.
- Consider add-ons such as earthquake cover, loss of rent, business interruption (Fire Loss of Profit policy).
5. Comply with Fire Safety Norms
- Install and maintain fire extinguishers, alarms, sprinklers, and hydrants.
- Keep inspection reports up to date; insurers often mandate these.
6. Review Policy Terms Regularly
- Update the policy annually to reflect new machinery, stock levels, or structural changes.
- Ensure multiple locations are covered if applicable.
7. Work with a Reputed Insurer/Broker
- Choose insurers with strong claim settlement records and industry experience.
- Brokers can help negotiate terms, add-ons, and premium structures.
Don’ts
1. Don’t Underinsure to Save Premiums
- Underinsurance can trigger the average clause, reducing claim payouts drastically.
2. Don’t Ignore Policy Exclusions
- Losses due to war, nuclear perils, electrical breakdown, or negligence may not be covered.
- Avoid assumptions—clarify exclusions with your insurer.
3. Don’t Delay Intimating Claims
- Immediate notification is mandatory. Delays can weaken or nullify claim validity.
4. Don’t Overlook Business Interruption Risk
- Fire may halt operations. Not taking Fire Loss of Profit cover can result in heavy financial strain.
5. Don’t Forget Documentation
- Maintain updated asset registers, stock records, fire safety compliance reports, and building layouts.
- Poor documentation complicates claim settlement.
6. Don’t Neglect Policy Wording
- Avoid simply renewing without reviewing. Tailor the policy to current risks and business changes.
7. Don’t Assume One-Size-Fits-All
- Risks vary for manufacturing plants, IT offices, warehouses, and hotels.
- Customize your coverage to suit specific business needs.
