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🏭 '''Industrial all-risk''' (IAR) is a comprehensive [[Definition:Property insurance|property insurance]] policy designed to cover large-scale industrial and manufacturing operations against a broad range of perils, written on an "all-risks" basis — meaning it covers any cause of physical loss or damage unless specifically [[Definition:Exclusion|excluded]]. IAR policies are a staple of the commercial and industrial insurance market, providing coverage for complex risk profiles that encompass plant and machinery, buildings, raw materials, finished goods, and often [[Definition:Business interruption insurance|business interruption]] resulting from insured damage. These policies are commonly placed in major commercial insurance markets including [[Definition:Lloyd's of London|Lloyd's]], the London company market, Continental European industrial lines, and specialty markets in Singapore, Dubai, and elsewhere.

⚙️ An IAR policy works by establishing a broad insuring agreement and then delineating coverage through a detailed schedule of exclusions, conditions, and [[Definition:Sublimit|sublimits]]. Typical exclusions include wear and tear, gradual deterioration, war, nuclear hazards, and — increasingly — certain [[Definition:Cyber risk|cyber-related]] perils, though the exact exclusion set is negotiated based on the risk and market conditions. [[Definition:Risk engineer|Risk engineering]] surveys are integral to the IAR underwriting process: insurers and reinsurers dispatch engineers to assess fire protection systems, process hazards, storage arrangements, natural catastrophe exposures, and loss prevention measures before offering terms. The [[Definition:Sum insured|sum insured]] on major IAR programs can reach into the billions of dollars, necessitating placement across multiple insurers and [[Definition:Reinsurance|reinsurers]] through layered or subscription structures. [[Definition:Estimated maximum loss|Estimated maximum loss]] and [[Definition:Probable maximum loss|probable maximum loss]] calculations are central to how underwriters and reinsurers determine their participation, pricing, and [[Definition:Retention|retention]] levels on each risk.

🛡️ Industrial all-risk coverage matters because the assets it protects — power plants, refineries, semiconductor fabrication facilities, chemical complexes, food processing plants — represent enormous concentrations of value where a single incident can generate losses of extraordinary magnitude. The 2015 Tianjin port explosions, catastrophic refinery fires, and major manufacturing plant losses have all underscored how a single event can produce insured losses running to hundreds of millions or even billions of dollars, rippling through the global reinsurance market. For insurers, IAR is a line that demands deep technical expertise and careful [[Definition:Aggregation risk|accumulation management]], as correlations between industrial risks (such as those in a single petrochemical corridor) can amplify portfolio-level exposure. As industries evolve — with new technologies, changing supply chains, and emerging perils like climate-driven natural catastrophe frequency — the IAR market must continuously adapt its coverage terms, risk engineering standards, and [[Definition:Catastrophe modeling|loss modeling]] capabilities.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Property insurance]]
* [[Definition:Business interruption insurance]]
* [[Definition:Risk engineering]]
* [[Definition:Estimated maximum loss]]
* [[Definition:Probable maximum loss]]
* [[Definition:Reinsurance]]
{{Div col end}}

Definition:Industrial all-risk - Revision history

PlumBot: Bot: Creating definition