The existence of property is susceptible to damage by fire or allied perils & the fact that this property has certain intrinsic value in terms of money makes Fire insurance a very important cover to have. Such an insurance policy provides much needed protection against fortuitous events which have the potential of adversely impacting the profitability of a business.
The typical assets which are covered under Fire policy are Building, electrical installation, civil installation including pipelines, furniture, fixtures & fittings, Plant and Machinery, stocks of raw material, finished goods as well stocks in process.
The Sum insured to be considered for building as well as Plant and machinery is the reinstatement value of such property to avoid application of under insurance at the time of a claim.
WHO SHOULD BUY
Owners / tenants of Residential complexes / apartments, bungalow & Commercial establishments such as Hotels, Shops, Malls, Hospitals, Salons, Educational Institutions and the like, factories, warehouses & stores, tank farms, petrol pumps etc for their respective interests.
Bankers/Financiers who have financial interest in such Property
KEY FEATURES OF THE POLICY
The policy covers any unforeseen and sudden physical loss or damage to the property insured due to any of the following causes :
• Fire
(Note: It is necessary to understand the exact meaning of the word ‘FIRE’ as used in insurance parlance. A ‘Fire’ as Covered under a Fire Policy, is said to have occurred when the following conditions are satisfied:-
• There is actual ignition of property.
• There must be something on fire which ought not to have been on fire;
• The fire must have occurred under accidental circumstances)
• Lightning
• Explosion / Implosion - (excluding boilers, economizers, vessel in which steam is generated)
• Aircraft Damage - (excluding loss caused by pressure waves)
• RSMD - Riots, Strike, Malicious damage
• STFI - Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood, And Inundation.
• Impact Damage – Rail/Road Transport & animals
• Subsidence, Land/Rock-Slide
• Bursting, Overflowing water tanks, Apparatus and Pipes.
• Leakage of automatic Sprinkler installations - (excluding repairs or alteration of building)
• Missile testing Operations
• Act of Terrorism
• Bush Fire - (excluding forest fire)
Various other in-built covers are also available and various add on covers can also be opted for by the insured.
KEY EXCLUSIONS
• Loss or damage due to war & nuclear risks
• Own Fermentation, Natural Heating, or spontaneous combustion.
• Explosion of Boilers, Economizers, or Vessels and machinery and Apparatus.
• Demolition, construction, alteration, repair, groundwork or excavation.
• Defect known to the insured at the time of commencement of the policy.
• Loss / Damage to stock in cold storage due to change in temp.
• Consequential Loss.
• Loss or damage to any electrical/ electronic machines, apparatus, fixtures and fittings arising from over running, excessive pressure, short circuiting, arcing, self-heating or leakage of electricity etc. These risks can be covered under Machinery Breakdown Insurance or Electronic Equipment Insurance
• Expenses incurred on (i) Architects, Surveyors and Consulting Engineers fees and (ii) Debris Removal necessarily incurred by the insured following a loss by an insured peril in excess of 3% and 1% of the claim amount respectively.
• Loss of market revenue, consequential losses/indirect losses of any kind. Fire Policy covers physical damages only, consequential losses can be covered under Loss of Profits Policy
