What’s worse than waking up in the morning and finding out that your factory has burned down? Understanding that the insurance coverage may be partial because you did not adhere to proper maintenance routines.

The Fire Department visit sites according to their level of risk. For example, a low-risk warehouse (Risk Level 1) will be inspected once every seven years, while a factory handling hazardous materials (Risk Level 5) will be inspected every year. In each Audit, the Fire Department makes sure that there are adequate measures in place and that routine tests are carried out for all systems. After that, they are usually satisfied with submitting test documents every year through the internet portal. That is, where there is a Fire Department Approval, this means that the protection measures on the site were found to be in order, and to the satisfaction of the Fire Department.


Regardless of the validity of the Approval of the firefighting arrangements (one to seven years), in the coverage for the property insurance we additionally require presenting references for the annual maintenance of the protection measures in case of fire, such as the sprinkler system, detection and extinguishing systems, and fire extinguishers, as well as to perform continuous maintenance of the electrical system and more, and all this irrelevant to the frequency of visits by the Fire Department to the site, and sometimes beyond the requirements of the Fire Department.


For example – The Fire Department does not require an annual thermographic scan of the electrical panels (despite what is required by the electrical regulations), and the insurance company does. This is a test in which they go through with an infrared camera and identify areas in the electrical panels where there is overheating. It is the best means of detection for the early detection of electrical faults that lead to a fire outbreak.


Ultimately, if the fire investigator determines that the source of the fire is in the main electrical panel, and it turns out that they did not perform an inspection by an Electrical Engineer in the period leading up to this, the Insured may find themself with reduced insurance coverage in the best case, and with criminal charges in the worst case.


So what are the main documents that need to be presented to the insurance company every year?


  • A copy of the last Audit Report of the Fire Department, with comments on the report regarding the execution status of rejects (if any). Alternatively, a Fire Department Approval must be presented


First page of the annual Approval certificates from service companies:


  • Firefighting equipment including fire extinguishers
  • Fire-detection system
  • Automatic gas extinguishing systems (in electrical panels)
  • Sprinkler system
  • Gas system (if LPG is used)
  • Electrical system by a qualified electrician or a checking electrician
  • Thermographic Scan Report of the electrical panels
  • PA system
  • Emergency Grab Pack of the complex, which was/will be presented to the Fire Department
  • Toxins Permit (if required)
  • Water characterization
  • Systems integration

A classic condition in a contract works policy is to place a security guard on the site, is this the only choice? No!

But…there are conditions that must be met in order for the insurance company to agree to deviate from the policy. See a creative example from a site that is divided into several sub-areas, where the permanent guard was actually replaced by three parallel security circles:


A mechanical breakdown insurance policy is designed to insure electro-mechanical equipment in case of unexpected accidental damage, and is also used as a basis for a loss of profits policy as a result of a mechanical breakdown event. On the one hand, they insure typical systems such as pumps, compressors, air-conditioning systems and refrigeration systems, generators and transformers, and elevators and escalators; and on the other hand, industrial systems such as printing presses, production lines in factories, processing machines (CNC), turbines and water desalination facilities, etc.


In the contract works insurance policy there is an exception for work stoppage, usually for a period exceeding 90 days. It is important to understand that the coverage is not stopped, but its scope may be affected.