When you’re running a business, your property isn’t just a building—it’s your inventory, your equipment, your livelihood. That’s why having the right insurance protection in place is crucial.
Property All Risks Insurance offers a broader level of protection than standard fire or named-peril policies. It ensures that your physical assets are covered against most unforeseen events—giving you peace of mind to focus on growing your business.
What Is Property All Risks Insurance?
Property All Risks (often abbreviated as PAR) is a form of commercial insurance that covers loss or damage to your property due to any cause— except those specifically excluded in the policy. This is what makes it different from a typical “named perils” policy, which only covers listed risks.
In simple terms:
If it’s not excluded, it’s covered.
This can include accidental fire, theft, flood, water damage, explosion, impact by vehicles, and more.
What Does It Cover?
Most Property All Risks policies provide two main sections of coverage:
Section I: Material Damage
Covers loss or damage to insured property located at your premises due to accidental events—unless excluded.
Section II: Business Interruption (Optional)
Compensate for loss of revenue, rental income, wages, or increased operating costs if your business is disrupted due to damage from a covered event.
Some policies may also extend to:
- Machinery breakdown
- Loss of profit due to equipment failure
What’s Not Covered?
While the coverage is broad, it’s important to note key exclusions. Common examples include:
- Wear and tear, gradual deterioration, or corrosion
- Mechanical or electrical breakdown (unless added) Damage from mold, insects, or rodents
- War, terrorism, nuclear risks
- Losses involving fraudulent acts by employees Government confiscation or seizure
Always review your policy schedule for the full list of exclusions.
Market Value vs. Replacement Value
When insuring your property, you can choose between:
- Market Value: Payout is based on the current value minus depreciation.
- Replacement Value: Pays the full cost of restoring or replacing the item without depreciation (as long as it’s adequately insured).
If your coverage is lower than the actual value, the Average Clause may apply—reducing the payout proportionally. This is why regular sum insured reviews are essential.
How Much Does It Cost?
The premium depends on several factors, such as:
- The nature of your business operations
- The sum insured
- Property location and risk profile
- Selected coverage extensions
Who Should Consider It?
Property All Risks Insurance is suitable for:
- Retail shops, cafes, and clinics
- Offices with IT equipment and renovations
- Warehouses and manufacturers
- SMEs with inventory or machinery
- Service providers using mobile tools or laptops
Whether you operate a small bakery or a large warehouse, if your business owns or relies on physical property, this coverage is worth considering.
Final Thoughts
Property All Risks Insurance helps businesses safeguard their premises and assets from a wide range of potential losses. In uncertain times, it offers the kind of reassurance that keeps operations running—even after the unexpected.
Don’t wait until the disaster strikes. Review your current coverage, assess your risk, and speak to a qualified insurance advisor to see if Property All Risks Insurance is right for you.
KH Chew is the Founder and Risk Advisor of Minaris, with over 30 years of experience in the insurance industry. He holds a Diploma in Insurance from the Malaysian Insurance Institute (MII), which laid the foundation for his in-depth expertise in property, financial lines, and other general insurance products. He is widely recognized for developing tailored insurance schemes for professionals and businesses across Malaysia. KH is also a passionate advocate for risk management and regularly advises clients and trade associations on comprehensive coverage strategies.