What is factory insurance?
Factory insurance is a type of insurance policy that provides coverage against losses and damages to a factory’s property, machinery, equipment, and other assets due to events like fire, theft, or natural disasters.
Where does factory insurance go in final accounts?
Factory insurance expenses are recorded as indirect expenses in the profit and loss account of the final accounts.
Does factory insurance come under which account?
Factory insurance is categorized as an indirect expense and is recorded in the profit and loss account of the final accounts.
Who underwrites the insurance for factories?
Insurance companies specializing in commercial and industrial insurance underwrite factory insurance policies.
What does factory insurance policy cover?
A factory insurance policy typically covers damages and losses to the factory’s building, machinery, equipment, inventory, and other assets due to covered events.
Is factory insurance a direct or indirect expense?
Factory insurance is considered an indirect expense as it is not directly related to the production process but contributes to the overall operational costs.
What is the cost of factory insurance in India?
The cost of factory insurance in India varies based on factors such as the size of the factory, the type of coverage, location, and the value of assets insured.
Can factory insurance be purchased online?
Yes, many insurance companies offer the option to purchase factory insurance online through their official websites.
Is there any specific HSN code for factory insurance?
Factory insurance does not have a specific Harmonized System of Nomenclature (HSN) code, as it is not a physical good.
Can I claim Input Tax Credit (ITC) on factory insurance premiums?
Yes, in many cases, businesses can claim Input Tax Credit (ITC) on the Goods and Services Tax (GST) paid on factory insurance premiums.
Where is the entry for factory insurance recorded in the final accounts?
The entry for factory insurance expenses is recorded in the debit side of the profit and loss account in the final accounts.
What is the significance of factory insurance in the cost sheet?
Factory insurance is included in the indirect expenses section of the cost sheet, contributing to the overall overhead costs of production.
What is a factory fire insurance policy?
Accurate documentation is crucial for a smooth claim settlement process, as it helps validate the claim and determine the extent of losses.
What does a factory fire insurance policy cover?
Such a policy typically covers damages caused by fire, lightning, explosions, and related perils to the factory’s building, contents, machinery, equipment, and inventory.
Is factory fire insurance mandatory?
While factory fire insurance is not legally mandatory in most places, it is highly recommended to protect businesses from substantial financial losses due to fire incidents.
What are the additional add-ons available with factory fire insurance?
Additional add-ons may include coverage for business interruption, machinery breakdown, earthquake damage, and coverage for specific perils based on the factory’s location and needs.
How does the premium for factory fire insurance policy get determined?
Factors such as the location of the factory, its construction type, the value of assets, the level of coverage, and any add-ons selected play a role in determining the premium.
What is the role of a surveyor in factory fire insurance claims?
A surveyor assesses the extent of damage during a fire incident and helps the insurance company determine the validity and amount of the claim.
Can a factory fire insurance policy cover business interruption losses?
Yes, some policies offer coverage for business interruption losses due to fire incidents, ensuring continuity of operations even during repairs.
What is the process to file a claim under a factory fire insurance policy?
The process involves informing the insurance company immediately, providing necessary documents like the policy copy, details of the incident, and cooperating with the surveyor’s assessment.
What are the exclusions in a factory fire insurance policy?
Exclusions might include damage due to wear and tear, electrical or mechanical breakdowns, intentional acts, and damages caused by events not covered by the policy.
Can a factory fire insurance policy cover the cost of rebuilding and replacing machinery after a fire?
Yes, with the appropriate coverage, a policy can help financially to rebuild structures, replace machinery, and resume operations after a fire.
Is it necessary to disclose accurate information while purchasing a factory fire insurance policy?
Yes, accurate disclosure of information about the factory’s location, construction, assets, and the type of business is crucial to ensure a valid and hassle-free claim settlement.
What are the benefits of having a factory fire insurance policy?
Benefits include financial protection against fire-related losses, peace of mind for business owners, and the ability to recover and rebuild after an unfortunate event.