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
Comparing fire insurance options for your factory?
Standard fire policies leave gaps that factory operators don't expect. IAR insurance can provide broader protection if your operations need it.
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) |
Not sure which policy is right for your factory? The difference between fire insurance and IAR isn't just price. Foundation helps factory operators choose the right IAR insurance based on their actual risk profile. px solid #e2e8f0; padding: 12px;">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.
Disclaimer: This article provides general guidance on insurance coverage available in the Malaysian market as of March 2026. Policy terms, conditions, and availability vary by insurer. Always review your specific policy wording or consult a qualified insurance professional before making coverage decisions.
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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.
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email: kevin.hoong@getfoundation.com.my