Manufacturing & Warehouse Insurance

Most factories and warehouses insure buildings, plant and stock under an industrial all risks or fire and perils policy, then add machinery breakdown, business interruption, goods in transit, products liability and WIBA, which is compulsory for every employer. Importers must insure cargo with a Kenyan insurer. Fire rates for factories typically run about 0.6%–1.5% of the sum insured a year.

Electronic equipment insurance covers computers, servers, POS terminals, telephone systems and medical electronics against sudden damage, including electrical faults, and can pay to restore data and the extra cost of working. Machinery breakdown covers sudden damage to generators, boilers, lifts, compressors and production machinery from electrical or mechanical failure, which fire policies exclude. Both are insured at new replacement value.

Business interruption (also called loss of profits or consequential loss) insurance replaces the gross profit you lose, and pays the extra costs of keeping the business going, while you recover from damage covered by your property policy. It can also pay continuing wages, rent and auditors' fees for preparing the claim. It is typically priced at about 0.25% of the gross profit insured a year.

No. Business interruption only pays when the loss of income follows physical damage covered by your property (fire) policy, so insurers sell the two together and the perils usually mirror each other. If the fire claim is not admissible, for example because riot was not covered, the business interruption claim fails too. Lost income without physical damage is not covered.

Insurance gross profit is usually your turnover less the costs that stop when trading stops, mainly purchases of goods and raw materials. It is higher than accounting net profit because it includes fixed costs such as rent, salaries and loan interest that continue during a closure. Use next year's expected figure, not last year's, or average can cut the claim.

Goods in transit insurance covers your goods against loss or damage while they are moved by road, rail or inland waterway, from loading at the start until unloading at the destination, including temporary stops. It can be bought for a single trip or as an annual policy, and on named perils (fire, collision, overturning) or wider all-risks terms that add theft and pilferage.

Most property policies carry an 'average' condition: if you insure for less than the true value, the insurer cuts your claim in proportion. Insure a property worth KES 10 million for KES 5 million and a KES 2 million loss pays about KES 1 million. Review your sums insured at every renewal, especially stock that rises during busy seasons.

For most small businesses, no: the proposal form asks about construction, neighbouring buildings, security and fire protection instead. Larger, higher-value or hazardous risks are often surveyed or referred to the insurer's underwriters first, and some trades and non-first-class buildings are always referred. If the insurer recommends improvements after a survey, carry them out; they can become conditions of cover.