Commercial insurance · Singapore

Property All Risk (PAR / IAR) Insurance

Broader cover than fire insurance — protects against all sudden and accidental physical loss or damage to commercial property, including water damage, accidental damage, theft and impact, subject to named exclusions.

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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.

Frequently asked questions

What is the difference between Property All Risk and fire insurance?

Fire insurance is a named-perils cover — it pays for loss or damage caused by a defined list of perils, principally fire, lightning and explosion of boilers. Property All Risk (PAR, sometimes called Industrial All Risk or IAR) covers all sudden and accidental physical loss or damage to the insured property, subject to a list of named exclusions. PAR is broader and usually more expensive, and is appropriate for businesses with high-value plant, electronics, stock or where business interruption from any cause matters.

What does PAR cover that fire does not?

PAR covers accidental damage from any cause not specifically excluded — for example, water damage from a burst pipe, theft and burglary, malicious damage, storm and tempest, accidental impact by the insured's own equipment, electrical breakdown causing physical damage, and similar “sudden and accidental” events. Under a fire policy these require named extensions (storm, tempest and flood; burst water pipes; riot, strike and malicious damage) added at additional premium and often with separate sub-limits.

What is typically excluded from PAR?

Standard PAR exclusions include wear, tear and gradual deterioration; mechanical and electrical breakdown not causing physical damage to the insured item (separate machinery breakdown cover); inherent vice and own latent defect; cyber events; war and nuclear risks; consequential loss with no physical damage (separately covered by business interruption); pollution from gradual seepage; subsidence (unless extended); rodents and vermin; loss while the property is unoccupied beyond a stated period.

Should PAR include business interruption?

Yes, in almost every case. PAR pays to repair or replace the physical property; it does not pay your rent, payroll and overhead while you are unable to trade. Business interruption (BI) is the corresponding cover and is added as a section of the PAR policy. The BI sum insured is calculated against annual gross profit (or fixed costs plus net profit) for the chosen indemnity period — typically 12, 18 or 24 months — and pays the cash gap between insured event and full trade recovery.

How is the PAR sum insured set?

Set the building section at the reinstatement cost (the cost to rebuild). Set the contents and stock section at the replacement cost of the items at risk. Most PAR wordings include an average condition — under-insurance triggers proportionate claim reduction. Re-state the sum insured at every renewal to account for renovations, new equipment, stock build-up and inflation in building costs. For tenants, the relevant sums are tenant-installed fit-out, contents, stock and plant — the building structure is the landlord's responsibility.