Amitabh Dewan, Head – Large Risks, Policybazaar for Business, explains why fire insurance is now critical for Indian industry.

Every year, as the mercury rises during India's scorching summer months, the country’s industrial sector braces itself for a predictable yet perilous challenge, an uptick in fire-related incidents. This concern takes on added urgency around World Environment Day, observed on June 5, which serves as a timely reminder that environmental and industrial risks are deeply interconnected. As climate change accelerates extreme heat events, industries face mounting threats from overheated equipment, electrical faults, and fire outbreaks, many of which are preventable with the right safeguards in place.

According to the India Meteorological Department (IMD), 2023 was one of the hottest years on record, with average summer temperatures climbing higher than the decadal norm. These climatic shifts have rendered Indian industries increasingly vulnerable to fire hazards, yet many remain woefully underprepared.

In this evolving risk landscape, fire insurance has transitioned from a "good-to-have" backup to an operational necessity. No longer can businesses afford to underestimate the real and growing threat of fire. India's rapid industrialisation has led to a proliferation of new manufacturing units and warehouses. However, the pace of growth has often outstripped the implementation of robust fire safety norms. National Crime Records Bureau (NCRB) data shows that in 2022 alone, there were over 8,000 fire-related industrial incidents in India, many preventable, many devastating. Fire insurance, in this context, serves as both a financial safeguard and a business continuity enabler.

The rise in fire risk can be attributed to a confluence of factors. Ageing infrastructure in legacy businesses is a significant contributor, electrical wiring systems, power distribution networks, and heavy-duty machines that haven't seen upgrades in decades are breeding grounds for electrical faults and short circuits. Add to this the rise in ambient temperatures and prolonged heatwaves, and the likelihood of machinery overheating increases substantially. Sectors like manufacturing, logistics, pharmaceuticals, and cold chain facilities are particularly exposed, as they involve continuous operations, sensitive inventory, and high energy consumption, all of which magnify fire risk.

Equally concerning is the presence of combustible materials, such as packaging materials, solvents, and plastic components, commonly stored in large quantities. These not only increase the chance of ignition but also accelerate the spread of fire. Yet, despite the clear data and recurring incidents, a large section of India Inc. continues to rely on broad-based property insurance policies, mistakenly assuming that these offer comprehensive fire protection. In reality, fire-specific policies cover a range of perils—including lightning, explosions, natural disasters like floods and cyclones—that general policies may not adequately address.

The misconception that fires are rare or only affect large factories is also being steadily debunked. Recently we all have seen the impact of a massive fire in one of a very large industrial unit, estimating the damage to the tune of Rs 2,000 crore – where the fire departments also took more than 72 hours to bring the fire under control. This devastating event exposes the necessity of having a robust insurance plan in place. Large corporations and midsize enterprises, warehouses, and even retail outlets have all reported fire incidents. According to the General Insurance Council of India, fire insurance claims saw a sharp rise post-COVID, especially in semi-urban and rural industrial belts where infrastructure may be less regulated. For these businesses, a one-size-fits-all insurance approach is insufficient. They need tailor-made solutions that align with their risk profiles, location-specific exposures, and operational complexities.

The insurance ecosystem in India is evolving. The rise of insurtech platforms like Policybazaar for Business is helping democratise access to relevant, data-driven insurance products. These platforms simplify the buying journey through digital onboarding, real-time documentation, and AI-powered policy matching that aligns with a business's scale and risk appetite. More importantly, they are instrumental in educating enterprises about the nuances of fire insurance and the critical gaps in their existing coverage.

The reality is that fires don't announce their arrival, they erupt, often without warning, and leave in their wake loss of property, disruption in operations, and in many tragic cases, loss of life. For India's ambitious and rapidly expanding industrial sector, ignoring the need for fire insurance is no longer an option. It's a strategic imperative. As climate volatility intensifies and industrial activity scales up, fire insurance is the frontline defence Indian businesses must invest in—not just for compliance or compensation, but for continuity and resilience.

Amitabh Dewan, Head – Large Risks, Policybazaar for Business, a seasoned insurance executive with over two decades of experience in general insurance, risk engineering, and loss prevention. In February 2025, he joined Policybazaar for Business (PBFB)—the corporate insurance division of Policybazaar—to lead its Large Corporate Risk unit. In this role, he is responsible for devising growth strategies and expanding PBFB’s footprint in India's corporate insurance sector .

Policybazaar for Business continues to work closely with Large corporates, SMEs and MSMEs, to ensure they are adequately covered, enabling them to focus on growth without the looming fear of preventable disasters. Because in a world where fire risk is no longer seasonal but systemic, proactive protection is not just smart—it's essential.