Usually this policy is issued to cold storages. There should be Machinery Breakdown Insurance for the machineries of concerned cold storage units.
This policy covers the risk of loss or damage to the perishable stock by deterioration or putrefaction due to -
1- Rise or fall in temperature resulting from breakdown of refrigeration plant and equipment at the premises.
2- Damage to the said plant and equipment by an incidental extraneous cause subject to the perils excluded.
3- Failure of electric supply

Basis of Indemnity
The insured is indemnified for damage caused to the stocks by deterioration, contamination or rotting due to an accidental damage to the plant resulting in a rise in temperature.

The total liability of the company under this policy shall be limited to the insured value or market value whichever is less. Provided always that -
1- The insured should possess an unqualified permission in writing of the competent Licensing Authority to the Cold Storage during the entire period of insurance.
2- The damaged stock should be stored at the refrigeration chambers specified in the policy
3- The Plant and Machinery used should be covered by Machinery Insurance.
4- The insured has to maintain daily stock book, Log books as per the format prescribed by company
5- Stock book & log book should be made available for the inspection of company representative

Appropriate deductions for
- Shrinkage and rottage
- Value of damaged stock by sale or survey
- Under insurance, if any
- Excess
- Recovery of rent, if any