Fire & Property Insurance
For most small businesses the building and the stock inside it represent years of accumulated capital. A fire policy is what stops a single night from erasing it.
Placed by Naveen Kumar Pandey, IRDAI-licensed insurance agentNo consultation fee
What this actually is
A standard fire and special perils policy covers the building, plant, machinery, stock and furniture against fire, lightning, explosion, riot, storm, flood, earthquake and impact damage. For smaller businesses, packaged shop or office policies bundle these with burglary and a few liability sections at a lower cost than buying each separately.
Fire loss of profit — business interruption — is the section people leave out and regret. It covers the income you lose while the premises are being rebuilt, and the standing costs such as salaries and rent that continue regardless. Rebuilding a factory is one loss; six months without revenue is often the bigger one.
Machinery breakdown covers sudden, accidental failure of plant that a fire policy does not touch, and machinery loss of profit does for a breakdown what fire loss of profit does for a fire.
Sums insured are normally set on a reinstatement basis — the cost of rebuilding or replacing new — and stock is usually declared on a floating or declaration basis so seasonal swings are handled properly.
Key facts
- Our appointment
- Bajaj Allianz General Insurance, agency code BAG10104147
- What is covered
- Building, plant and machinery, stock, furniture and fittings
- Typical perils
- Fire, lightning, explosion, riot and strike, storm, flood, earthquake, impact
- Business interruption
- Fire loss of profit covers lost income and continuing standing charges
- Basis of sum insured
- Usually reinstatement value; stock often on a declaration basis
- Small business option
- Packaged shop and office policies bundle several sections at lower cost
This suits you if
- Shops, showrooms and offices
- Factories, workshops and processing units
- Godowns and warehouses holding stock
- Any business with a bank loan secured on its premises or plant
How it works, step by step
Value everything properly
Building on reinstatement cost, plant on replacement value, stock on a realistic average or peak. Under-insurance is the most common and most expensive mistake here.
Choose the sections
Fire and special perils, burglary, machinery breakdown, and loss of profit. We go through what each one actually pays for.
Declare the occupancy honestly
What is made or stored on the premises drives the rate, and a wrong declaration is grounds for repudiation.
Survey where required
Larger risks are surveyed by the insurer before the policy is issued.
At claim time
Inform the insurer immediately, do not clear the site before the surveyor sees it, and keep the stock and purchase records that will support the claim.
What you will need
- GST registration and business registration documents
- Property papers or lease agreement
- Stock statement and a fixed asset register
- Details of construction and occupancy
- Previous policy and claim history
Do not have all of it to hand? Send what you have — we will tell you what is still needed.
What can go wrong
Every product has a downside. Here is this one's, in plain language, before you decide anything.
- Insurance is the subject matter of solicitation. Read the policy wording before concluding a sale.
- The average clause applies: insure for less than the full value and every claim is scaled down in the same proportion, not just the large ones.
- A property policy pays for the damage, not for the income lost while you are shut. Without a loss-of-profit section, that gap is yours.
- Misdescribing the trade, the construction or what is stored on the premises can void a claim outright.
- Wear and tear, gradual deterioration and consequential loss are excluded unless specifically covered.
- Stock values move through the year. Review the sum insured before your peak season, not after it.
Questions people ask us about this
What is under-insurance and why does it matter so much?
If you insure a ₹1 crore property for ₹50 lakh, the average clause means the insurer pays only half of any claim — including a small one. It is the single most common reason a business receives far less than it expected.
Do I need loss of profit cover as well?
If your business could not survive several months without revenue, yes. The fire policy rebuilds the premises; loss of profit covers the income and the salaries and rent that carry on while you are closed.
I run a small shop. Is there something simpler?
Yes. Packaged shop and office policies bundle fire, burglary, and some liability and equipment sections into one policy at a much lower cost than buying each separately.
Related services
Liability Insurance
Cover for the legal claims a business can face from customers, staff or the public.
Read moreEngineering & Project Insurance
For construction sites, erection work and contractors' equipment.
Read moreMarine Transit & Workmen's Compensation
Cover for goods while they move, and for the people who work for you.
Read moreReady when you are
Still deciding?
Ask us anything about this product — including how we are paid on it. We will answer straight.