IAR Insurance Malaysia: When Fire Insurance Isn't Enough for Your Factory
Fire insurance only covers named perils like fire, lightning, and explosion. IAR (Industrial All Risks) insurance provides broader "all risks" coverage for Malaysian factories, including accidental damage, theft, and machinery breakdown that fire policies exclude.
Your factory's fire insurance policy has a gap you probably don't know about. Standard fire coverage only pays for damage from specific named perils: fire, lightning, explosion. Everything else, from a forklift collision to a burst water pipe, falls outside the policy.
This guide explains why Industrial All Risks (IAR) insurance exists, what it covers that fire insurance doesn't, and how to determine which coverage your Malaysian factory actually needs.
This guide covers:
- What fire insurance actually covers (and what it excludes)
- How IAR differs from fire insurance
- Coverage gaps that catch factory owners off guard
- Who qualifies for IAR in Malaysia
- How to evaluate which policy fits your operation
What Fire Insurance Actually Covers
Fire insurance in Malaysia follows a named perils approach. The policy lists specific events that trigger coverage. If damage comes from something not on that list, you pay out of pocket.
Standard fire insurance covers three basic perils: fire, lightning, and explosion caused by domestic gas. You can extend coverage to additional perils by paying extra premium.
| Coverage Type | Standard Fire Policy | With Extensions (Extra Premium) |
|---|---|---|
| Fire | Covered | Covered |
| Lightning | Covered | Covered |
| Explosion (domestic gas) | Covered | Covered |
| Storm and tempest | Not covered | Optional extension |
| Flood | Not covered | Optional extension |
| Burst pipes / water damage | Not covered | Optional extension |
| Riot, strike, malicious damage | Not covered | Optional extension |
| Aircraft impact | Not covered | Optional extension |
Even with all extensions added, fire insurance still excludes major categories of loss that factories commonly experience. The policy structure itself creates gaps.
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If you're managing a construction project, industrial facility, or commercial property in Malaysia and need insurance coverage, we can help structure a program that works.
Foundation Insurance Solutions is a registered and licensed insurance intermediary in Malaysia specialising in property and engineering insurance for industrial operations. We provide comprehensive coverage for manufacturers, contractors, and facility owners across construction, electronics, food production, and high-risk industrial sectors.
Riskflow Sdn Bhd (202101001225):
Suite 3.19 (North Block), The Ampwalk, 218 Jalan Ampang, 50450 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur
t: +60149256398 (Kevin)
email: contact@getfoundation.com.my