New India Bharat Laghu Udyam Suraksha

Advance Loss

New India Bharat Laghu Udyam Suraksha

Fire Insurance Policy


New India Bharat Laghu Udyam Suraksha Policy provides insurance cover for physical loss or damage to or destruction of Insured Property relating to Your business.

This policy is for enterprises where the total value at risk across all insurable asset classes at one locationexceeds ₹ 5 Crore (Rupees Five Crore) but does not exceed₹50 Crore ( Rupees Fifty Crore) at the policy commencement date.

Important Dos and Don’ts


When You fill up the Proposal Form

  • Read the instructions in the proposal form carefully before filling up the details.
  • Understand the basis for arriving at the Sum Insured for Building, Plant and Machinery, Furniture, Fixtures, Fittings, Stocks and other Contents before filling up the details. This is given below in this Prospectus under the heading ‘Sum Insured’. It is also explained in the Proposal Form.
  • Make sure You have opted for the correct policy based on the total Sum Insured.
  • Fill up the proposal form completely and answer all the questions truthfully.


During the Policy Period

  • Make full disclosure in the proposal and related documents about Yourself and all the Insurable Assets.
  • Remember, the information You give Us is the basis of Our contract with You.
  • You must inform Us of any changes in the business premises or if it remains unoccupied for more than 30 days.
  • Do not allow unauthorised persons to occupy Your premises.
  • Ensure that all security procedures are in force.


When You have a Claim

  • Give notice of loss to Us, as required.
  • Inform the respective authorities, as required.
  • Make true and full disclosures in Your claim form.
  • Give all documents supporting the claim.
  • Give full cooperation for inspection and investigation of claim.

The Insurance Cover

  1. Standard Cover: We cover physical loss or damage, or destruction caused to the building and structures, plant and machinery, stock and other assets relating to Your These are the Insured Properties.

If any Insured Property is lost, damaged or destroyed, We provide cover as follows-

Your loss


We pay, but not more than the Sum Insured

Any Insured Property is damaged. (Partial Loss)

You have repaired such property.

Cost of repairs

If any Insured Stock is damaged. (Partial Loss)

Extent of the loss of such Partial Loss

Any Building or Plant and Machinery or Furniture, Fixture, Fittings is completely destroyed. (Total Loss)

You have rebuilt the building or reinstated

/replaced such property.

Reinstatement /Replacement Value (i.e amount at which the Insured Property can be reinstated or replaced by a similar property, without deducting depreciation)

Stock is completely destroyed (Total Loss)

a) For raw material: Landed Cost at Your Premises, b) For stock in process: Input Cost of the stock at the time of damage, c) For finished stock: the Manufacturing Cost of the finished stock or the

Contract Price of goods sold but not delivered

Any Building, Plant and Machinery, Furniture, Fixture

You have not rebuilt the building or reinstated

Market Value (Reinstatement Value less Depreciation)

and Fittings is completely destroyed (Total Loss)

other property.

  1. You must commence the repairs, reinstatement or reconstruction within a reasonable time after the date of damage or You must complete the repairs or reinstatement within 12 months from the date of damage of destruction or within such time as We may allow.
  2. In all cases, We will not pay more than the relevant Sum
  3. We will pay only to the extent required to bring the Property to a condition substantially the same as, but not superior, better or more extensive than its condition if it were new on the date it is damaged or
  4. You can reconstruct the new building on the same site, or another If You reconstruct the new building on another site, We will not pay You more than what We would pay to reconstruct on the same site.
  1. In-built Covers: Under the Standard Cover, We also pay the following:

In-built Cover



Additions, alterations or extensions

Property that You erect, acquire or add during the Policy Period is covered upto 15% of the Sum Insured for that item (excluding stocks).


Temporary removal of stocks

Loss to stocks temporarily removed to other premises for fabrication, processing or finishing upto 10% of value.


Cover for Specific Contents

Cover for Money upto ₹50,000 (Fifty Thousand Rupees) during the policy period, cover for documents such as deeds, manuscripts, business books, plans, drawings, securities etc. upto ₹50,000 (Rupees Fifty Thousand) during the policy period, cover for computer programmes, information and data upto ₹ 5 Lakh ( Rupees Five Lakh) during the policy period and cover for personal effects of employees, Directors and visitors upto ₹15,000 ( Rupees Fifteen Thousand) per person for a maximum of 20 persons during the policy period.


Start-Up Expenses

Start-up cost incurred by You in respect of insured risk consequent upon a loss or damage due to insured events upto ₹ 5 Lakhs ( Rupees Five Lakh).


Professional fees

Reasonable fees of architects, surveyors and consulting engineers upto 5% of the claim amount.


Costs for Removal of debris

Reasonable expenses for removal of debris upto 2 % of the claim amount.


Costs compelled by Municipal Regulations

Additional cost of reconstruction of property incurred solely for complying with municipal regulations.

Which unexpected events are covered?

We pay for the physical loss, damage or destruction caused to Insured Property by the following unforeseen events occurring during Policy Period.

The events covered are given in the Column A and those not covered in respect of these events are given in Column B.

Column A

Column B

We cover physical loss or damage, or destruction caused to the Insured Property by

We do not cover for loss or damage, or destruction caused to the Insured Property by


Fire, including due to its own fermentation, or natural heating, or spontaneous combustion.

caused by

a. its undergoing any heating or drying process, or

b. burning of Insured Property by order of any Public Authority.


Explosion or Implosion

a. caused to boilers, economizers or other vessels, machinery or apparatus in which steam is generated, or their contents, resulting from their own explosion or implosion, or

b. caused by centrifugal forces.





Earthquake, volcanic eruption, or other convulsions of nature



Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Tsunami, Flood and




Subsidence of the land on which Your Premises stand, Landslide, Rockslide

caused by

a. normal cracking, settlement or bedding down of new structures,

b. the settlement or movement of made up ground,

c. coastal or river erosion,

d. defective design or workmanship or use of defective materials, or

e. demolition, construction, structural alterations or repair of any property,

or ground works or excavations.


Bush fire, Forest fire, Jungle fire



Impact damage of any kind, i.e., damage caused by impact of, or collision caused by, any external physical object (e.g. vehicle, falling trees, aircraft, wall etc.),

a. caused by pressure waves caused by aircraft or other aerial or space devices travelling at sonic or supersonic speeds.

b. caused by vehicle, animal or aircraft belonging to or owned by Insured or their employee while acting in course of employment


Missile testing operations



Riot, Strikes, Malicious Damages,

caused by

a. total or partial cessation of work or the retardation or interruption or cessation of any process or operations or omissions of any kind,

b. temporary or permanent dispossession, confiscation, commandeering, requisition or destruction by order of the government or any lawful authority, or

c. temporary or permanent dispossession of any Building by unlawful occupation

by any person.


Acts of terrorism

(Coverage as per Terrorism Clause attached)

Exclusions as per Terrorism Clause attached.


Bursting or overflowing of water tanks, apparatus and pipes,



Leakage from automatic sprinkler installations.

a. repairs or alterations in the Building in

b. repairs, removal or extension of any

c. defects in the construction known to


Theft within 7 days from the occurrence of, and proximately caused by, any of the above Insured Events

if it is

a. of any article or thing outside Your Premises, or

b. of any article or thing attached from the

Standard Add-on covers

You can purchase standard Add-on covers under New India Bharat Laghu Udyam Suraksha Policy. You must apply for these covers, and pay additional premium.

1. Declaration policy for Stocks

You can opt for Declaration Policy to take care of frequent fluctuations in stocks/ stocks value subject to certain conditions. Read the Clause and understand these conditions.

2. Floater cover

You can opt for Floater cover under the Policy for physical loss or damage to Stocks at more than one location subject to certain conditions. Read the Clause and understand the conditions.

Which property can be covered under this policy?

This policy covers the following properties in Your premises, that is, the place You carry on Your business. The properties must be located in Your premises, except some properties that You declare, and the Policy covers in special situations. New India Bharat Laghu Udyam Suraksha policy covers the following properties.

  1. Any building or structure in Your premises where You carry on Your It may be a shed, flat, house, unit of a building. It may be made of any material. It includes:
    1. Basement (if any), all fixtures and fittings permanently attached to the floor, walls or roof like electrical wiring, antennas
    2. The following ‘additional structures’ located on Your Premises and used for Your Business, that are shown in the Policy Schedule:
      1. garage, out-houses, security sheds, towers, verandah or porch, tanks, compound walls, retaining walls, fences and gates, internal roads,
      2. lifts, hoists,
      3. solar panels, wind turbines and air conditioning systems, central heating systems, security systems and cameras, electrical installations, fire alarm, fire sprinkler systems, power lines, power installations, or
      4. water, gas and sewage pipeline within the premises
    3. any other structure shown in the Policy
  1. Plant and Machinery , that is, all equipment, machinery, pipes and cables, spares, computers, servers and preloaded licensed system software, located within any structure or in the open area of Your It includes
    1. machines under repair,
    2. machines taken on hire or lease, or any system of purchase of goods,
    3. foundation, bedding or setting of the machines, or
    4. accessories of machines
      1. Stock of goods or merchandise . It may be:
        1. finished goods, semi-finished goods, stock in process, stock invoiced and ready for dispatch,
        2. raw materials, packing materials,
        3. stock accepted for job work for which You are responsible,
        4. stock held in trust for which You are responsible,
        5. stock in Open in the Insured
      1. All other assets , that is, all other tangible property located in Your premises and used for Your It includes
        1. furniture and fixtures, office equipment, telephone equipment, electronic equipment, computers etc,
        2. canteen and kitchen equipment, gym and permanent sports equipment
      Who can purchase this Policy?
      1. You can purchase New India Bharat Laghu Udyam Suraksha Policy for the building or structure if
        1. You own it, or occupy under a lease,
        2. You occupy it as purchaser under an agreement of sale or lease,
        3. You are an occupier authorised under any law,
        4. Your property is occupied by a tenant, a licensee or Your employee, or
        5. You are a tenant under an agreement in writing and are liable to repair
      1. You can purchase New India Bharat Laghu Udyam Suraksha Policy for plant and machinery, stock or other property if
        1. You own it, or use it under a lease in writing,
        2. You hold it in trust or on commission or are responsible for it,
        3. You have taken plant and machinery or other contents on hire or lease, or any other system of purchase,
        4. You have accepted stock for job work for which You are
      1. You are eligible to purchase New India Bharat Laghu Udyam Suraksha Policy
        1. If You carry on any business of manufacturing or production of goods, or of providing or rendering services, and
        2. if You own or are legally responsible for Your business, and
        3. if the value of all Your insurable assets at one location is more than ₹ 5 Crore (Rupees Five Crore) but not more than ₹ 50 Crore (Rupees Fifty Crore) at the policy Commencement These include buildings, plant and machinery, stock, and all other assets, even if You have not taken insurance cover for all of them. Insurable Assets include all assets which You own, or hold as tenant or occupant, or hold in trust or on commission, or are legally responsible for.
      1. If the value of all Insurable Assets either exceeds ₹ 50 Crore or reduces below ₹ 5 Crore during the policy period, this policy shall, on expiry, be replaced by the applicable
      Sum Insured
      1. The maximum claim amount: The maximum amount We pay under this Policy is the total Sum The maximum amount We pay under this Policy for any cover, or any item, or category or group of items, is the Sum Insured for that cover or item, category or group. The Sum Insured for each cover is as per Policy Schedule.
      2. Basis of sum insured:
        1. For Building, Plant and Machinery, Furniture, Fixture and Fittings and any other contents: Reinstatement Value
        2. For Stocks:
          1. For raw material: Landed Cost at Your
          2. For stock in process: Input Cost of the stock at the time of damage,
          3. For finished stock: the Manufacturing Cost of the Finished Stock or the Contract Price of goods sold but not delivered and more precisely defined
          4. Contract Price is in respect only of goods sold but not delivered, for which You are responsible and with regard to which under the conditions of the sale, the sale contract is cancelled by reason of any damage insured under this Policy either wholly or to the extent of the The Company’s liability shall be based on the Contract Price.
        3. Bullion or unset precious stones, any curios or works of art or obsolete machinery and the like are to be covered on Agreed Value basis subject to the valuation certificate being submitted and found acceptable by
      3. Restoration of Sum Insured:

        If We have paid any loss on Your claim, it reduces the Sum Insured. When We pay You the full Sum Insured for any cover or any item covered, the Policy ends to that extent. If You pay proportionate premium for the unexpired policy period, We will restore the policy to the full original amount of Sum Insured during the Policy Period. This ensures full cover during the period of the policy. However, in case You, immediately on occurrence of loss, exercise Your option not to restore the Sum Insured, the Sum Insured shall stand reduced by the amount of loss.


      Underinsurance waiver upto 15% : This is a special feature of New India Bharat Laghu Udyam Suraksha policy, where We waive underinsurance up to 15%.

      The Sum Insured for each item of Insured Property must be sufficient to pay for Reinstatement/Replacement of that Property on the date of loss. If the Reinstatement/Replacement Value of the Insured Property, in totality, including additions, alterations, erections and new acquisitions, is more than the Sum Insured, except to the extent waived i.e 15%, it amounts to underinsurance and will reduce proportionate to the difference, the amount that We will pay for Your claim. Every item of Insured Property is subject to this condition separately.

      If at the time of the damage the Sum Insured applying to the relevant Buildings, Plant and Machinery, Furniture, Fixture, Fittings , Stocks and other Contents is less than 85% of the value of Insurable Assets You will be responsible for the difference and the You will bear a proportionate share of the loss.

      Exclusions, that is, what We do not pay

      We do not cover losses or expenses, or any loss, damage to, or destruction of the Insured Property, directly or indirectly as a result of or if caused by or arising from events, stated below:

      1. Excess of 5 % of each claim, subject to a minimum of ₹ 10,000 (Rupees Ten Thousand). This means that We will deduct 5 % of each claim, subject to a minimum of ₹ 10,000 (Rupees Ten Thousand) for each and every loss suffered by You under the terms of this policy.
      2. For terrorism risk the Excess shall be as per the Clause attached with this policy.
      3. Your deliberate, wilful or intentional act or omission, or of anyone on Your behalf, or with Your
      4. Loss, damage or destruction to any electrical/electronic machine, apparatus, fixture, or fitting by over-running, excessive pressure, short circuiting, arcing, self-heating or leakage of electricity from whatever cause (lightning included). This exclusion applies only to the particular machine so lost, damaged or However, any ensuing loss or damage to other insured property due to operation of an insured peril is covered.
      5. Loss, destruction or damage to the stocks in cold storage premises caused by change of
      6. Loss, or damage by spoilage resulting from the retardation or interruption or cessation of any process or operation caused by operation of any of the Insured
      7. Your Premises or any Insured Building remaining continuously unoccupied for a period of more than 30 days unless You have obtained prior written approval from Us and and such approval is recorded as an endorsement on the
      8. War, invasion, act of foreign enemy hostilities or war-like operations (whether war is declared or not), civil war, mutiny, civil commotion amounting to a popular rising, military rising, rebellion, revolution, insurrection or military or usurped
      9. Ionising radiation or contamination by radioactivity from any nuclear fuel or from any nuclear waste from combustion of nuclear fuel, or the radioactive, toxic, explosive or other hazardous properties of any explosive nuclear assembly or nuclear component that is part of
      10. Pollution or contamination, unless
        1. the pollution or contamination itself has resulted from an Insured Event, in which case only physical damage to the Insured Property is covered, or
        2. an Insured Event itself results from pollution or
      11. Loss, destruction or damage to bullion or unset precious stones, any curios or works of art unless such amount is declared separately and recorded in the Policy
      12. Loss of any Insured Property which is missing or has been mislaid, or its disappearance cannot be linked to any single identifiable Insured
      13. Loss or damage to any Insured Property removed from Your Premises to any other place, except
        1. Machinery and equipment temporarily removed for repairs, cleaning, renovation or other similar purposes for a period not exceeding 60 days,
        2. Stock covered under in-built Cover ‘Temporary removal of stocks’.
      1. Any reduction in market value of any Insured Property after its repair or
      2. Loss or damage to any Insured Property or any claim which is covered by a marine policy in force at the time of loss or damage, except in excess of the limits of that
      3. Any consequential or indirect loss or damage of any description, i.e. losses or extra costs (financial or non-financial) that follow or are a consequence of an Insured Event, like, loss by delay, loss of income or wages or earnings, or of market, or of time, medical expenses, or any costs not covered by this
      4. Costs, fees or expenses for preparing any

      The premium is the amount You pay Us for this insurance. The Policy Schedule shows the amount of premium for the Policy Period and all other taxes and levies. Your policy will commence on payment of premium in full.

      Note: Insurer to mention how the premium would be calculated.

      Changes and Cancellation

      1. Changes during Policy

        You can choose to make changes to the covers of this Policy, for example, take additional cover, or increase or reduce any Sum Insured. You must make a proposal or request for any change. It will be effective only after We have accepted Your proposal, and You have paid the additional premium where applicable.

      2. You can cancel the Policy.

        Cancellation at any time: You can cancel the policy at any time during the policy period by giving notice to Us in writing

      3. We can cancel the policy.

        We will not cancel the Policy during the policy period except on the grounds of mis- representation, non-disclosure of material facts, fraud or non-co-operation of the insured.

      4. Policy ends automatically:
        1. If insured property is lost, destroyed or stolen, or its cost of repair is more than the Sum Insured, and We have paid You the entire Sum Insured for that property and You have decided not to restore the Sum
        2. Change of ownership of insured property
        3. Sale of Insured Property

      Details of additional covers (add-ons) offered with the policy You can opt for an Add-on by choosing from the Add-ons, if any, offered by Us under this product and the ones that You have purchased will be mentioned in the Policy Schedule and the relevant clause/s and/or endorsements will be attached to this Policy

      Making a claim

      1. If You suffer a loss because of an Insured Event, You must make a claim for Your financial loss at Your
      2. When You suffer loss or damage to any Insured Property, You must
        • give notice to Us immediately along with details of the event and Your loss,
        • report to police, fire authorities or other appropriate legal Authorities or as guided by Us,
        • take all reasonable steps to prevent further damage to Insured Property,
        • You must not sell, give away or dispose of any damaged items of any property,
        • You must not carry out repairs unless such repairs are urgent and You cannot contact Us,
        • preserve and collect evidence, take and preserve photographs,
        • assist Us and Our representatives in collecting evidence and details about Your loss, give Us all information, books of accounts, and other documents,
        • submit claim form at the earliest opportunity but within 30 days from date You first notice the loss or damage,
        • prove that the Insured Event has happened, and the extent of Yourloss.

      Note : Policy details given are indicative, not exhaustive. Please contact your nearest NIA Office for further details.

      WhatsApp Us