Table of contents
An insurance policy for the industrial sector is one that offers coverage for possible claims to which a company may be exposed in its activity, ranging from fire, theft, material damage, machinery breakdown or loss of profits, to civil liability for multiple circumstances such as accidents at work.
Therefore, we can see how insurance for industry is fundamental, as it is composed of coverages that are totally focused on the activity of the company and, moreover, in the widest diversity, as these so-called "multi-risk" insurances for industry are adapted according to the needs of each type of company.
However, there are certain characteristics that are common to these types of policies for industry, highlighting two major types of coverages that combine to offer comprehensive protection against the risks that threaten any industrial activity:
Types of insurance cover for the industrial sector
1. Coverage of the firm's patrimonial assets
It takes the form of the protection of property, machinery and goods. More specifically, it is possible to insure patrimonial assets such as:
- The buildings and facilities, as well as the real estate housing the factory, workshop or warehouse.
- The company's machinery, equipment and furniture.
- Raw materials and products that are stored in the company and have not yet been processed or used in the manufacturing process.
- Materials in the manufacturing process, but not yet ready to be put on the market.
- Finished and stored products, which are only awaiting delivery to customers.
2. Coverage relating to what the company may miss out on earning
Or also known as loss of profit, caused by the cessation of the business due to a loss.
Insurance for industry thus covers the gross margin or the permanent expenses that are generated in the day-to-day business of a company if it is forced to stop its activity as a result of a loss. This guarantee is maintained, within the limits established in the policy, until the level of production or the expected level of sales is recovered.
Therefore, we can see that the risks covered by these multi-risk insurance policies can affect any of the company's assets or profits, and the guarantees depend on the insurance offer of each company, although the main claims covered by these policies are:
- Fires and explosions.
- Theft and robbery
- Electronic equipment
- Coverage of extraordinary risks.
- Coverage of activity stoppage.
- Machinery breakdown coverage.
- Liability coverage.
Industrial all-risk insurance
On the other hand, there are insurance policies on the insurance market known as all industrial risks, which are very common in large companies, as they provide a broader coverage by including a greater number of insured risks and much higher indemnity limits. In fact, it is common for this type of policy to cover only the risks that are not covered. Obviously, they also tend to have a higher deductible than multi-risk industrial insurance. It is necessary to take into account that this type of insurance is usually used to cover possible claims of large amounts and low frequency.
An all-risk insurance policy guarantees all material and direct damages that affect the insured goods due to any sudden, accidental and unforeseen event, provided, however, that they are not expressly excluded in the policy. In short, the coverage is much broader in a fully comprehensive insurance policy. For example, we can guarantee accidental breakages, such as damage in storage due to accidental collapse of shelves, accidental knocks and a long etcetera, as well as those included in all the so-called multi-risk insurances (fire, theft, water damage, atmospheric phenomena...).
To conclude, it is therefore important to choose the right insurance policy to protect our assets and to deal with the financial consequences of an accident/injury. Controlling costs by knowing in advance the insurance premium and the coverage it offers. Obtaining peace of mind by transferring business risks, in whole or in part, to a company that will assume the negative consequences in the event of an accident.
And even more important is to be able to count on specialised advice when it comes to taking out industrial insurance or reporting and handling a claim of this nature.
At CECA MAGÁN Abogados we have a team of experts in insurance law who can help you resolve any issue in this area. Contact them here.
Insurance and Reinsurance Area Director