A warehouse fire in Jebel Ali. A burst sprinkler line that floods a showroom overnight. A forklift that punches a hole through a stockroom wall. Every one of these is a property claim, but whether it gets paid in full, partly, or not at all often comes down to a decision made months earlier: was the policy written on a Fire & Allied Perils (F&AL) basis, or a Property All Risks (PAR) basis?

The two are frequently confused because they insure the same physical assets: your building, contents, stock, and equipment. But the way they define what’s covered is fundamentally different, and that difference decides how a claim actually plays out.

This guide breaks down what each policy really covers, who tends to buy which one, and how to work out which basis of cover fits your business.

What Is F&AL (Fire & Allied Perils) Insurance?

F&AL is a named perils policy. The policy document lists out exactly which events are covered, typically fire, lightning, explosion, aircraft impact, riot and strike, storm and tempest, flood, impact by vehicles, and subsidence. If your loss was caused by something on that list, you’re covered. If it wasn’t, you wouldn’t.

This makes F&AL straightforward and relatively affordable. It also means the burden is on you, the policyholder, to show that the cause of loss matches one of the named perils when you file a claim.

What Is PAR (Property All Risks) Insurance?

PAR flips the logic. Instead of listing what’s covered, it covers all risks of physical loss or damage to your property, unless the cause is specifically excluded in the policy. Common exclusions include things like wear and tear, inherent defects, or deliberate acts, but beyond that, the cover is broad by default.

Because the starting position is broad coverage, PAR responds to a wider range of everyday incidents: accidental damage, equipment being dropped, water damage from sources beyond flood, and often theft or machinery breakdown when added as extensions. The burden also shifts: if an insurer wants to deny a PAR claim, they need to point to a specific exclusion, not just the absence of a named peril.

The Difference in a Claim Scenario

Say a contractor’s crane accidentally damages the roof of a warehouse during nearby construction work, and rainwater then damages stock inside. Under F&AL, you’d need this specific chain of events to fall within a named peril such as impact or storm damage; if it doesn’t map cleanly, the claim can be disputed or reduced. Under PAR, unless the policy specifically excludes this kind of incident, the loss is presumed covered, because the default position is ‘covered unless excluded’ rather than ‘covered only if listed.’

Side-by-Side Comparison

Which One Does Your Business Need?

The right answer depends on how much risk exposure your operation actually carries, not on which policy sounds more comprehensive on paper.

• Choose F&AL if you run a straightforward operation—a single office, a standard retail unit, or a warehouse holding low-value, easily replaceable stock—and want solid core protection at a lower premium.
• Choose PAR if your business has higher-value assets, multiple locations, manufacturing or processing equipment, or stock that’s expensive or slow to replace, where a single uncovered incident could be financially significant.
• Consider PAR if your lender, landlord, or head office contract specifically requires ‘all risks’ cover as a condition of financing or leasing.
• Consider PAR if your past claims history includes losses that wouldn’t have mapped cleanly onto a named-perils list—for example, accidental damage during fit-outs, moves, or day-to-day operations.

A Simple Way to Decide

F&AL insures against the risks that are most likely to cause serious loss. PAR insures against nearly everything, then carves out what it won’t cover. The more your business would struggle to absorb an unusual or hard-to-classify loss, the more that difference in wording matters.

Getting Started

At Omega Insurance Brokers, we assess your actual risk profile, your assets, your operations, and your contractual obligations before recommending a basis of cover. In many cases, the right structure isn’t a straight either/or, but a PAR policy with specific extensions, or an F&AL policy layered with targeted add-ons, built around what your business can and can’t afford to lose.