The current focus of the Reserve Bank of India on building financial resiliency underlines the importance of business enterprises moving away from their focus on just credit and liquidity risks and addressing the problem of operational disruptions, which could be more prominent in the peak summer period, characterized by occurrences of fires due to factors like electric overloading, overheated machines, and air conditioning needs. Hence, it would be imperative for any business enterprise to have a contingency plan in place to tackle issues arising out of such scenarios.
A fire break-out at any business enterprise can lead to a financial crisis that may become very difficult for an enterprise to cope with, especially for micro, small, and medium-sized enterprises who do not have the buffer of financial stability. While the first point of concern is asset loss, it is equally important for businesses to think about business continuity issues like no revenue generation, continued fixed overheads, and the time period taken in getting back to normalcy. Thus, fire insurance should be imperative from a financial standpoint , as well.