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Fire Insurance for Fire Damage to Factory Computer Systems

  • Author :
  • TATA AIG Team
  • Last Updated On :
  • 30/09/2024
  • 2 min read

Computer systems are the core of any factory today, as they are crucial for inventory management, production planning, and storing other necessary operational data. But what happens when a fire breaks out and damages your computer system and its data?

This is where fire insurance comes to your rescue. It extends a financial safety net to help your factory recover from the fire damage incurred by your computer systems to ensure smooth operations.

Why is Fire Damage Insurance Crucial for Computer Systems?

With the help of a fire insurance policy, you can safeguard your finances from a significant dent in case of a fire breakout at your factory. An inclusion under this policy is for computer system damage.

Here are some reasons why a fire insurance policy is necessary:

Peace of Mind - One of the most significant benefits of fire insurance is added peace of mind for factory owners and workers, knowing that they have a financial safety net to cover repair expenses in case a fire disrupts their computers.

Financial Support for Data Loss - At times, the fire damage can cause complete loss of computer data. This can cause severe operational gaps for a factory. However, with fire damage insurance coverage, you can get extensive coverage for data recovery services to help minimise the impact of fire on operations.

Operational Interruption Support - If fire damage to your computer systems forces you to shut down your business due to unexpected interruptions, fire insurance can help cover the costs of business interruption to compensate for the lost revenue.

Replacement Benefit - Modern computer systems and data storage devices are expensive, and thus, repair and replacement costs for them are also very high. With a fire insurance policy, you can do the needful without exhausting your business finances.

Inclusions and Exclusions of Fire Damage Coverage for Computers

Inclusions of Fire Damage Insurance

  • Cover for replacing and recovering data and hardware components and restoring software in case of fire due to natural heating or combustion.

  • Cover for damage or loss due to spontaneous fires caused by weather conditions.

  • Cover for damage or loss due to explosions or implosions.

  • Cover for damage or loss due to the impact of external physical objects surrounding the factory premise.

Exclusions of Fire Damage Insurance

  • Loss due to war-like situations.

  • Loss due to intentional fire damage to the property or devices.

  • Loss or damage of specific machinery or equipment (varies from policy to policy).

  • Loss or damage due to electricity leakage.

  • Loss or damage due to man-made disasters.

  • Loss or damage due to natural disasters.

  • Loss or damage due to theft.

How to Choose the Right Fire Insurance Policy for Your Business?

Assess your inventory list to evaluate the amount of coverage you require under a fire insurance policy.

Check the type and sensitivity of data available in your computer systems to have a clear estimate of the amount of data recovery coverage you require.

Evaluate the different inclusions and exclusions for various fire insurance policies to choose the one that aligns with your requirements.

Understand the claim settlement process and ratio for different insurers before choosing a fire insurance policy. Ensure you pick the one with online processes and support and a high claim settlement ratio.

Read online reviews and customer testimonials before picking any fire insurance policy and give preference to one with positive feedback.

Conclusion

With digitisation taking over the world, the industrial landscape has also adopted the same in its operational processes. Computer systems are required for all operational processes, from production to inventory and order management.

Thus, having fire insurance is crucial to ensuring minimal operational disruption and financial liabilities in case of a factory fire. While fire insurance protects your factory’s digital assets, investing in fire and property damage and public liability insurance together can help you with better risk management for the future.

For maximum protection for your factory, investing in Tata AIG’s fire and burglary insurance is highly recommended. Under this, you will benefit from extensive coverage for asset protection during fire and burglary. Moreover, you have ample customisation flexibility to increase the cover of your base policy, such as theft cover and other add-ons, as required.

FAQS

What are the 12 perils covered under a standard fire insurance policy?

Standard fire insurance typically covers 12 perils that revolve around the following -

  • Natural disasters like fire, storms, floods, lightning

  • Man-made disasters like riots, strikes, or malicious damage

  • Aircraft damage

  • Landslides

  • Impact damage

  • Overflowing or bursting of water tanks

  • Missile operations

  • Leakage from an automatic water sprinkler

  • Bush fires

Is computer system damage due to a power surge included in fire insurance?

Most standard fire insurance policies do not cover power or electrical surge damage to computer systems. However, you can explore additional coverage for electronic equipment insurance available with many insurers to get the desired coverage for this situation.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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