Perils of Standard Fire Insurance Policy

In India, several factors like natural calamities and industrial incidents can contribute to fire risks. The common fire insurance perils under a standard fire insurance policy are as follows:

-Fire-

A fire insurance policy covers any damage to the insured property or goods caused by fire. However, the policy does not provide coverage to the insured assets against the following:

• Damage caused by its fermentation

• Damage caused by natural heating

• Damage caused by spontaneous combustion

• Burning of the insured assets due to Public Authority’s orders

• Damage caused during the process of heating or drying

-Explosion/Implosion-

An explosion can occur when the pressure inside a vessel is more than the outside atmospheric pressure. On the other hand, an implosion can occur when the pressure outside is higher than the pressure inside the vessel.

Damages caused by explosions or implosions are covered under a fire insurance policy. However, damage, loss or destruction of boilers, economisers, machinery, apparatus or other contents producing steam are not covered.

-Lightening-

Damages to the insured property caused by lightning strikes are also covered under fire insurance. These may include cracks in buildings or roofs.

-Aircraft Damage-

Damages to the insured property or goods that occur due to aircraft or other aerial devices are included in the standard fire insurance.

-Natural Calamities-

A standard fire policy safeguards the insured property against natural calamities like storms, cyclones, typhoons, hurricanes, inundations, tornadoes and tempests. However, it does not provide coverage against volcanic eruptions and earthquakes.

-Riots, Strikes and Malicious Damages-

A fire insurance policy provides coverage against damage, loss or destruction to the insured property caused due to violent activities like strikes, riots or terrorism.

Missile Testing Operations-**

Damage or loss to the insured property caused by missile testing operations is also covered by standard fire and special perils policy.

-Bursting/Overflowing of Pipes, Water Tanks and Apparatus-

The policy covers damage or loss to property caused by bursting or overflowing of pipes, water tanks and apparatus.

-Bushfire-

Fire insurance provides coverage against damage caused due to bushfires. However, the policy does not cover forest fire damages.

-Leakage from Automatic Sprinkler Installations-

Damages occurring due to leakage of water from automatic sprinkler installations are also covered under a fire insurance policy. However, the following loss or damage is not covered under this peril:

Building repairs or alterations

Removal, repair or extension of sprinkler installations

Any construction defects the insured party already knew about

-Subsidence and Landslide Including Rockslide-

Fire insurance provides coverage against loss, damage or destruction due to landslides and the sinking of the area where the property stands. However, the peril does not include the following:

• Coastal or river erosion

• Alteration, repair or demolition of the property or excavations or groundwork

• Defective workmanship or construction or use of defective materials

• Usual cracking or bedding down of the property

• Movement or settlement of the made-up ground

-Impact Damage-

Fire insurance covers damage or loss caused by the impact of any animal or vehicle that came into direct contact with the insured property.

However, such animals or vehicles should not be owned by the insured party, any occupier of the premises or any employee during his employment.

For small and medium enterprises (SMEs) and start-ups, fire insurance can be vital in risk management. It provides financial protection against unforeseen circumstances and helps keep your business running.

India has numerous small and medium enterprises. Tata AIG offers flexible SME insurance policies to support their growth and protect them against significant financial losses.

Which peril is not included in a standard fire and special perils policy national insurance?

A few exclusions under standard fire insurance are damages caused by war or war-like operations, nuclear risks, pollution/contamination, earthquakes, volcanic eruptions, etc.

What is covered under a standard fire insurance policy?

A standard fire insurance policy includes the following perils:

• Fire

• Lightening

• Aircraft damage

• Explosion/implosion

• Riot, strike, malicious damages

• Impact damage

• Subsidence, rockslide and landslide

• Bush fire

• Missile testing operations

• Natural calamities including storms, cyclones, typhoons, hurricanes, inundations, tornados, tempests

• Bursting/overflowing of pipes, water tanks and apparatus

• Leakage from Automatic sprinkler installations

What is a standard fire and special perils policy?

A fire and special perils insurance cover is a traditional insurance cover that offers protection against fire and allied perils that are named in the policy. It can cover plant and machinery, building (including Plinth and Foundation), furniture, stocks, fixtures and fittings, etc.