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Difference between Fire and Warehouse Insurance

Posted on 29 August, 2022
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Fire insurance and warehouse insurance provide coverage against monetary losses due to damage of property and assets during natural and manmade calamities. Owing to global climate change, the incidence of natural disasters are increasing in frequency and intensity. This puts businesses and other establishments at greater risk to loss and damage of property and assets.

As per a report published by the Insurance Regulatory and Development Authority (IRDA) in December 2021, the claim amount for losses due to natural disasters in India was a total of INR 2,559.10 crore, in 2020 and 2021. Further reports by a global disaster risk management company indicate that most of these claims were by commercial establishments, especially those that were affected by cyclones and floods.

Fire and Warehouse Insurance

Fire insurance provides coverage for loss and damage of property and assets due to fire. In addition, fire insurance provides coverage against several other perils that commercial establishments or homes are susceptible to. Warehouse insurance provides coverage against losses due to damage to a warehouse, or the goods or machinery stored within a warehouse due to calamities or accidents.

It is helpful to know more about each of these policies.

Fire Insurance: Scope, Coverage and Exclusions

If you are a business owner or own any commercial or domestic property, opting for a fire insurance policy is prudent. However, it is important to first understand the policy offerings.

1. Scope

A fire insurance policy is beneficial for:

  • Individuals who wish to secure their household contents like furniture and other valuables from losses

  • Organisations, shopkeepers, retailers or godown/storage keepers

  • Banks, financial, research, educational institutes, and so on

  • Manufacturing and non-manufacturing firms

2. Coverage

Fire insurance policies basically cover losses and/or damage arising from:

  • Fires caused by spontaneous combustion, heating or lightning

  • Explosions and implosions

  • Natural calamities such as earthquakes, volcanic eruptions, storms, typhoons, floods, Tsunamis, and more

  • Bursting of water tanks, pipes or overflowing of water tanks

  • Acts of terrorism

  • Theft within a period of 7 days from the occurrence of any of the above-mentioned incidents

3. Exclusions

Events of fire or other damage are not covered in case they arise from:

  • Intentional or wilful acts or omissions

  • Orders of Public Authorities

  • Change in storage temperature

  • War or invasion or ionising radiation

  • Pollution or contamination

  • Missing property

  • Building or property that has been unoccupied for more than 30 days

Warehouse Insurance: Scope, Coverage and Exclusions

A manufacturing unit or a retailer who stores goods in a warehouse will benefit from a warehouse insurance that offers coverage against monetary losses due to damage of goods or machinery inside the building or within the insured premises.

1. Scope

A warehouse insurance policy is ideal for the following categories of establishments:

  • Manufacturing units and factories

  • Retail shops with godowns

  • Industrial establishments / units

  • Buildings with heavy machinery

2. Coverage

Losses or damages arising from catastrophic events such as:

  • Fire, lightning, explosion

  • Aircraft damage

  • Natural calamities like earthquakes, floods, storms

  • Impact due to animals

  • Rail / road incidents

  • Missile operations

3. Exclusions

Losses or damages arising from the following scenarios are not covered under warehouse insurance:

  • Deliberate or intentional acts of destruction

  • Deterioration due to ageing, and wear and tear

  • War and allied perils

  • Pollution and contamination except that arising from any of the events mentioned under ‘Coverage’

  • Radiation

  • Short circuiting

  • Changes in temperature in cold storage

Warehouse insurance coverage can be enhanced by including some add-ons such as theft cover, rent for alternative accommodation, machinery breakdown, etc.

Difference between Fire and Warehouse Insurance

There are several similar features in fire and warehouse insurance. This can confuse policy buyers as to which insurance is more suited for their risk. Here is where understanding the difference in the policies can help. The primary differences between fire and warehouse insurance are based on certain parameters:

1. Scope of Coverage

A basic fire insurance policy offers coverage against damage or losses arising from fire or related perils. By opting for add-ons, you can avail cover for theft or monetary cover for specific contents in a property. A warehouse insurance, on the other hand, provides coverage for all types of perils, even those not arising from fire.

In a broad sense, fire insurance can be considered as one part of warehouse insurance. However, warehouse insurance offers more comprehensive coverage and extends beyond the scope of fire insurance.

2. Types of Beneficiaries

Homeowners benefit from a fire insurance policy as it covers the various aspects of possible mishaps related to a home. Even damages arising from short circuits are covered though the gadget responsible for the short circuit is excluded from the coverage.

For businesses, commercial establishments, shop owners, etc., a warehouse insurance policy is more relevant and allows for enhanced coverage for their goods, machinery and premises when compared to a fire insurance policy.

3. Premium

Considering the scope of coverage and relevance of warehouse insurance, it is perceived to be more comprehensive. Hence, warehouse insurance policies feature higher premiums as compared to standalone fire insurance policies.


The decision of choosing the insurance policy suited for your property or establishment should be based on a thorough risk assessment. Since both fire and warehouse insurance policies see several similarities and overlaps, only identification of individual risks can help to identify the type of insurance cover and add-ons your premise would require..

Not opting for comprehensive coverage, or choosing the wrong policy can result in monetary losses in case of any unforeseen event. Get your property assessed by the expert risk mitigation team at ICICI Lombard and opt for the right insurance plan.

  • Fire Insurance
  • Product Code: 1016
  • Product UIN: IRDAN115RP0006V01202021

Help us know you better!

This contains only an indication of the cover offered. For complete details on risk factors, terms, conditions, coverages and exclusions, please read the sales brochure carefully before concluding a sale.ICICI trade logo displayed above belongs to ICICI Bank and is used by ICICI Lombard GIC Ltd. under license and Lombard logo belongs to ICICI Lombard GIC Ltd. ICICI Lombard General Insurance Company Limited, ICICI Lombard House, 414, Veer Savarkar Marg, Prabhadevi, Mumbai – 400025. . IRDA Reg.No.115. Toll Free 1800 2666. Fax No – 022 61961323. CIN (L67200MH2000PLC129408). (Workman Compensation, 4010 , IRDAN115P0010V01200607)