MANESAR, India—A labor dispute that turned violent and led to the closure of the Maruti Suzuki India Ltd. auto plant in Manesar, India, is causing a supply chain disruption likely to be largely uninsured.

The subsidiary of Japanese car manufacturer Suzuki Motor Corp. makes two of the best-selling cars in India's fast-growing auto market.

The dispute reportedly is costing Maruti Suzuki an estimated $15 million in lost production each day. The Indian company has lost $700 million in market value since the riot closed the Manesar production plant almost two weeks ago.

Shares in Suzuki Motor Corp. had fallen 10% in value late last week.

The dispute started July 18, when a supervisor at the Manesar plant in the Indian state of Haryana made a job-related warning to a worker, which led to the worker's suspension.

The situation deteriorated into mob violence, resulting in the fatal burning of a general manager and the hospitalization of nearly 100 other managers and supervisors, according to Maruti Suzuki's website.

Safety fears meant that plant workers were locked out, halting production for more than a week.

Indian newspaper The Economic Times reported that Maruti Suzuki has 162.13 billion Indian rupees ($2.93 billion) of insurance coverage with four local insurers: Gurgaon, India-based Iffco Tokio General Insurance Co. Ltd.; Pune, India-based Bajaj Allianz General Insurance Co. Ltd.; Kolkata, India-based National Insurance Co. Ltd.; and Chennai, India-based United India Insurance Co. Ltd.

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The lead insurer, Iffco Tokio, is a joint venture of the Indian Farmers Fertilizer Co-operative and Japanese insurer Tokio Marine & Nichido Fire Co. Ltd. Bajaj Allianz is a joint venture of Bajaj Finserv Ltd. and German insurer Allianz S.E.

The report, which cited unnamed executives at Maruti Suzuki and Iffco Tokio, said the automaker faces a revenue loss of 4 billion Indian rupees ($72.3 million), although insurance will cover plant damages of just 5 million Indian rupees ($903,500). The property insurance covers only damage to plant and machinery, not the loss of revenue due to the plant shutdown, a Maruti executive told the newspaper.

A spokesman for Suzuki Motor Corp. said the company was unable to comment because of the ongoing investigation.

Insurance for the plant is likely to reside in the domestic market, although reinsurance sometimes is purchased in the international market when required limits are high, said Stephen Ashwell, head of the political violence team at Hiscox Ltd. in London. Property insurance offered by Indian companies typically would not exclude damage caused by riots, strikes and civil commotion, he said.

Labor disputes are common in India, but it is unusual for a dispute to escalate into violence, said Rachel Shoemaker, Singapore-based head of Asia forecasting at political risk consultant Exclusive Analysis Ltd.

Foreign and Indian companies increasingly consider the supportiveness of local governments and their willingness to step in to take on the more militant labor unions, Ms. Shoemaker said.

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For example, Mumbai, India-based Tata Motors Ltd. in 2008 had to abandon its construction of a manufacturing plant for the Nano—billed as the world's cheapest car—in West Bengal after violent local protests. Tata eventually built its plant in Gujarat, and West Bengal has struggled to attract investment ever since, Ms. Shoemaker said.

The Indian state of Haryana has a history of labor disputes, and the Maruti Suzuki plant already experienced strikes last year.

Labor relations in industrial zones across all sectors in India will remain challenging because companies face restrictions on laying off permanent staff, said Nigel Singh, Singapore-based South Asia Analyst at Control Risks Group Ltd.

Employment disputes are likely to continue to pose risks until India reforms its labor laws, although strikes are far more likely than the violence seen at Maruti Suzuki, said Mr. Singh. However, the current government lacks the necessary support from its coalition partners to even attempt such reforms right now, he said.

“Reform is not likely until after the 2014 election,” Mr. Singh said. “Even then, a new government would find this tough.”

The closure of the Maruti plant is likely to affect the company's suppliers and customers, Ms. Shoemaker said.

Many of Suzuki's suppliers have set up plants in the region and will be concerned how the plant closure will affect them as well as being exposed to the same militant unions, she said.

About one-third of the 150 suppliers to Maruti Suzuki in Manesar reportedly were affected by the temporary shutdown.

Maruti Suzuki said it had run out of stock for its top-selling models, the Suzuki Swift and DZire, produced at the Manesar plant. It could take up to six months to clear the backlog, it said.