When PAR is more appropriate than fire
Move from a fire policy to a PAR (or IAR) policy when one or more of the following applies:
- The landlord lease requires “All Risk” or “Industrial All Risk” cover rather than fire-only.
- Contents, stock and plant values are material relative to building value.
- Operations depend on high-value plant or electronic equipment vulnerable to accidental damage.
- Premises sit on a flood-prone street or basement, or in a strata-titled building with shared-services risk.
- Business interruption is critical — PAR + BI is a cleaner construction than fire + multiple named extensions + BI.
- The trade includes warehousing, manufacturing or anything with significant stock-holding.
For pure office tenancies on a basic landlord covenant, fire insurance is usually adequate — see our fire insurance page.
What PAR covers
A Singapore PAR (Property All Risk) or IAR (Industrial All Risk) policy responds to all sudden and accidental physical loss or damage to the insured property, subject to a list of named exclusions. The benefit relative to a fire policy is the breadth of cause: you do not need to argue whether the damage was caused by an insured peril; you only need to show it was not caused by an excluded peril.
Typical perils that fall within PAR but require named extensions on a fire policy:
- Water damage — burst pipes, sprinkler discharge, neighbouring-unit leaks.
- Storm, tempest, flood and inundation.
- Theft and burglary.
- Malicious damage and riot.
- Accidental impact — falling objects, vehicle impact on premises.
- Sudden electrical breakdown causing physical damage.
- Accidental damage to stock and plant.
Standard exclusions
- Wear, tear, gradual deterioration and inherent vice.
- Mechanical and electrical breakdown not causing physical damage to other parts of the insured item.
- Cyber events and data loss.
- War, terrorism (separate extension) and nuclear risks.
- Consequential loss with no physical damage (covered by business interruption).
- Pollution from gradual seepage.
- Subsidence, ground heave and landslip (often by extension only).
- Damage by rodents, vermin and insects.
- Loss while premises are unoccupied beyond a stated period.
Business interruption pairing
PAR pays for physical reinstatement. Business interruption (BI) pays the cash gap while the insured cannot trade. The two go together. BI is added as a section of the PAR policy with the sum insured set against annual gross profit (or fixed costs plus net profit), and the indemnity period set to the realistic time-to-full-recovery for the specific business.
Typical Singapore indemnity periods:
- 12 months — office tenants and light services.
- 18 months — retail and F&B with operational fit-out, suppliers and brand recovery.
- 24 months — manufacturing, specialist plant, anything dependent on lead-time-heavy equipment replacement.
- 36 months — heavy industrial, where the rebuild and commissioning genuinely takes that long.
Setting the sums insured
The PAR sums insured by section:
- Building — reinstatement cost (rebuild cost), not market value or original purchase price.
- Contents — replacement cost of furniture, fittings, plant, equipment and electronics.
- Stock — declared at average level, declarations and adjustments for peak periods.
- Tenant-installed fit-out (for tenants) — replacement cost of fit-out works and tenant improvements.
- Removal of debris — usually 10 to 15 percent of sum insured automatically, extendable.
- Architects', surveyors' and engineers' fees — reinstatement professional fees.
Under-declaration triggers average and proportionate claim reduction. Re-state sums insured at every renewal.