How to Choose the Best Fire Insurance Policy for Your Business

Fire is one of the most unexpected risks that businesses face. A fire can cause financial losses and disrupt your operations, regardless of whether you're a small startup or a large corporation. That's why it's important to have the right fire insurance policy in place.

We hear of fires that have occurred due to electrical faults, natural disasters, or human error. Fire insurance for businesses should be tailored to cover, at minimum, the risks that have the highest possibility of occurring. Not having adequate protection is going to cause substantial financial losses, operational disruptions, and even the end of a business. Keeping this in mind, having a sound fire insurance policy is not just a recommendation—it’s a necessity. Let's take a closer look at the kinds of risks a business can face from a fire.

What represents a fire risk will vary depending on the nature of the business, the industry, and the physical environment. For example, fire insurance for factories will focus mainly on risks associated with flammable materials, while fire insurance for offices might focus more on electrical fires.
The location of your business also plays a role in determining how much of a risk you face from fire. Adverse weather and climatic conditions, such as high humidity and seasonal monsoons, can increase fire hazards. Assessing the risks and deciding which ones are associated with your business can be difficult, but it’s crucial for businesses to do this.

A good insurance company like Continental Insurance can take this pressure off you. They can provide detailed analyses of your business and the associated fire risks to ease your mind. Let’s see what kind of coverage is offered by Continental Insurance against fire associated risks.

When it comes to protecting your business from fire risks, among the various companies that offer fire insurance in Sri Lanka, we see that Continental Insurance offers a wide range of options that can meet the diverse needs of businesses. Their policies cover a wide range of fire-related damages, including but not limited to:

• Property All Risk Insurance

This includes coverage for the repair or replacement of damaged buildings, machinery, equipment, and inventory.

• Business Interruption Insurance

Fire insurance from Continental Insurance also covers the loss of income you face due to business interruption, helping you maintain cash flow during the recovery period.

• Fire and Named Perils Insurance
  Something interesting to note is that although it is called fire insurance, it can actually include a wide range of other risks not directly caused by fire, if specifically included in the policy at the time of underwriting. Here is a list of some of the named perils that can be added to a policy.
  1. Fire
  2. Explosion Damage - including those caused by gas leaks or malfunctioning equipment.
  3. Storm and Flood
  4. Earthquake
  5. Riot, Strike, and Civil Commotion - Vandalism and Malicious Damage
  6. Impact Damage - Damage from external objects crashing into the insured property.
  7. Aircraft and Other Aerial Devices
  8. Bursting of Water Tanks, Apparatus, and Pipes leading to flooding or water damage.
  9. Subsidence, Landslip, and Ground Movement
  10. Additional Perils - Accidental Damage, Debris Removal

There is also third-party liability clause to cover cases where a fire damages third-party property or causes injury.

These add-ons allow businesses to customise their policies, ensuring that they are adequately protected against the specific risks they face.

Think about the potential financial impact of a fire. Without adequate fire insurance, businesses risk paying the entire cost of repair and replacement, which can be overwhelming, especially for small and medium enterprises. The cost of rebuilding, replacing lost inventory, and restoring operations can quickly escalate, draining financial resources and potentially leading to bankruptcy.

So fire insurance provides peace of mind, allowing business owners to focus on growth and development rather than worrying about potential disasters.

In the event of a fire, good fire insurance ensures that your business can recover swiftly, minimising downtime and financial loss. It also protects your business’s reputation by demonstrating a commitment to risk management and continuity planning. Speak to our expert consultants at Continental Insurance on +94 11 2 800 200 for more information and personalised quotes. You can also visit the website for more details and an overview of the available services.