Property All Risks Insurance

A material-damage policy commonly designed to cover sudden and accidental physical loss of or damage to insured property, except where the wording excludes or restricts it.

Who needs it

Owners and tenants of offices, warehouses, factories, shops, hotels, schools, hospitals, and other commercial premises.
Manufacturers and distributors holding machinery, contents, raw materials, work in progress, or finished stock.
Businesses with lender, landlord, lease, or contractual obligations to insure physical assets.
Multi-location organisations that need consistent limits and extensions across a property programme.

Core cover

Buildings, tenant improvements, plant, machinery, furniture, contents, and stock when declared and accepted.
Physical damage from insured events such as fire, explosion, storm, flood, impact, escape of water, and accidental damage, subject to the wording.
Reinstatement or replacement costs where the valuation basis and reinstatement conditions are satisfied.
Selected extensions such as debris removal, professional fees, temporary removal, additions, expediting expenses, and automatic reinstatement when included.

What is commonly not covered

Wear and tear, corrosion, gradual deterioration, inherent vice, and ordinary maintenance.
The cost of correcting defective design, materials, or workmanship unless the wording preserves resulting damage.
Mechanical or electrical breakdown unless separately insured or specifically extended.
Unexplained shortage, inventory discrepancy, fraud, pollution, cyber events, war, nuclear risks, and sanctions-related exposure where excluded.
Loss of income or additional operating costs unless Business Interruption cover is arranged and its trigger is met.

Underwriting information

A complete location schedule with construction, occupancy, protection, exposure, floor area, and geographic coordinates.
Replacement values for buildings, machinery, contents, and stock, including freight, duties, installation, and inflation where relevant.
Fire protection, alarm, sprinkler, water supply, security, maintenance, housekeeping, and business-continuity information.
Natural-catastrophe exposure, surrounding risks, storage configuration, hazardous processes, maximum foreseeable loss, and claims history.
Peak or seasonal stock levels and any property belonging to customers, suppliers, landlords, or financiers.

Common mistakes

Using book value or market value when the policy requires reinstatement or replacement value.
Omitting locations, tenant improvements, mobile equipment, property in the open, or customers’ goods.
Declaring an average stock figure even though seasonal peaks are materially higher.
Assuming every extension is automatic or unlimited because the policy is called “all risks.”
Ignoring warranties, survey requirements, protective safeguards, and notification duties after material changes.

Claims issues

Establishing the proximate cause and separating insured physical damage from excluded deterioration or defective property.
Applying average or underinsurance when declared values are below the value at risk.
Agreeing repair versus replacement, depreciation, betterment, salvage, and the reasonable cost of mitigation.
Producing asset registers, invoices, photographs, maintenance records, stock evidence, and a clear loss chronology.
Complying with immediate notification, loss minimisation, insurer-consent, and reinstatement requirements.

Critical wording points

Basis of valuation and the operation of reinstatement conditions.
Average, underinsurance, margin clauses, and declaration-linked stock provisions.
Deductibles, occurrence definitions, catastrophe hours clauses, and location-specific sublimits.
Defects, machinery breakdown, pollution, cyber, terrorism, political violence, and communicable-disease exclusions.
Automatic reinstatement, debris removal, professional fees, additions, temporary removal, non-invalidation, and waiver of subrogation.

Related policies

Business InterruptionMachinery BreakdownCrime/FidelityCyberPolitical Violence/Terrorism

Reference desk

Allianz Commercial — Commercial Property Insurance ↗

Policy-wording boundary

This guide explains common market structures. Actual coverage may depend on the insurer, jurisdiction, schedule, declarations, endorsements, definitions, exclusions, conditions, facts, and complete policy wording. Obtain professional advice and written insurer confirmation for a specific risk or claim.