Fire and engineering insurance protects against a wide range of risks that can disrupt your business, including fire, explosion, or implosion, strikes, riots, and malicious damage, natural disasters like storms, floods, earthquakes and even bushfires etc.
New Delhi: Fire and Engineering insurance is more essential than ever in today’s world of rising operational risks and increasingly unpredictable climate events. According to experts, these policies are designed to safeguard valuable business assets, regardless of whether the threat comes from within, like complex machinery breakdowns or electrical failures leading to fire, explosion, and equipment breakdowns, which can halt round-the-clock operations and damage expensive infrastructure.
Moreover, extreme weather events like floods, lightning, and cyclones are becoming more frequent and severe due to climate change.
According to Amitabh Dewan, Head – Large Risks, Policybazaar for Business, fire and engineering insurance helps cover costly damage, from boiler explosions to short circuits, reducing financial strain and helping businesses recover faster. It’s not just about compliance—it’s about peace of mind, where a smart investment can keep your business resilient when the unexpected strikes.
Types of losses does fire and engineering insurance typically cover and some common exclusions
Fire and engineering insurance protects against a wide range of risks that can disrupt your business, including fire, explosion, or implosion, strikes, riots, and malicious damage, natural disasters like storms, floods, earthquakes and even bushfires etc.
“Some exclusions that businesses should be aware of, especially relevant in today’s global and political climate, are loss or damage due to war, invasions, or acts of foreign enemies, civil unrest, or any event where power is forcibly taken or disrupted. Some other exclusions are – forest fires, nuclear activities, consequential loss, etc.” Dewan said.
Key factors to consider when choosing a fire and engineering insurance policy
Fire and engineering insurance policies are regulated products, meaning they follow standardised guidelines laid down by the regulator. However, within this framework, insurers assess each business individually to offer customised protection based on its unique risk profile. Criteria like geographical location, for example, areas prone to floods or earthquakes, might face higher premiums due to increased risk. Similarly, Insurers evaluate the construction materials, fire safety systems, electrical wiring, and maintenance protocols to determine risk. Few extensions are available to enhance coverage.
For SMEs or factories with limited budgets, how should they assess whether this insurance is essential?
According to Dewan, whether the business is a small business or a large corporation, insurance is essential for managing risk. “Insuring your assets helps transfer the financial burden in case of any unforeseen event. In India, insurance premiums remain significantly lower compared to global averages, making coverage both affordable and necessary. Considering the protection it offers, having insurance is not just a financial decision, but it’s peace of mind as well,” he added.
Fire and engineering insurance is becoming increasingly important
As business risks evolve, fire and engineering insurance ensures that your infrastructure remains protected, your investments are secure, and your operations stay on track – even when the unexpected happens. It provides protection of both physical and capital assets, covering internal and external threats. Opting for fire and engineering insurance provides peace of mind to focus on growth, not just survival.
