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Standard Fire And Special Perils Insurance

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Fire Insurance is governed by All India Fire Tariff
  • The Standard Fire and Special Perils (SFSP) Insurance also called as Fire and Allied Perils Insurance can cover all properties on land (excluding cost of land), at various locations against named perils.
  • Building, Plant & Machinery, Stocks…etc can be covered under this policy
  • Long Term Policies are available for Dwellings (Residence)
  • Policy can be extended to cover certain additional Perils(Cause of loss) and expenses at additional premium.

  • Who can take this Policy?
    • Any Person, Company, Institution who may suffer financial loss in the event of operation of insurable perils may insure such property under the fire policy. They may be broadly categorised as under :
    • Owners of Building and Contents (Tenant can also Insure the Building if they have Insurable Interest through the lease agreement)
    • Shop Keepers
    • Godown Keepers / Warehouse
    • Industrial and Manufacturing units
    • Educational Institutions
    • Hotels, Boarding and Lodgings, Hospitals, Clinics
    • Stocks – Raw material , Semi finished goods, Finished goods, Packing materials
    • Trusts, Charitable Institutions.
    • Transporters and C & F Agents.
  • Building (Plinth and foundations also can be coved if required)
  • Compound Walls and Gates
  • Plant & Machinery, Equipment's & Accessories (including foundations, if required)
  • Stocks (All types and kinds pertaining to Insured line of activity)
  • Other Contents such as:
  • Furniture, Fixtures and Fittings
  • Cables, Pipings
  • Spares, Tools and Stores
  • Household goods… etc
  • Stocks can be covered under Floater or Declaration basis
  • Perils Covered:
    • Fire
    • Lightning
    • Explosion / Implosion
    • Aircraft damage
    • Riot, Strike, Malicious damage (RSMD)
    • Storm, Tempest, Flood, Inundation (STFI) Hurricane, Cyclone, Typhoon and Tornado.
    • Impact by any Rail/ Road vehicle or animal
    • Subsidence / Landslide including rockslide.
    • Bursting and / or overflowing of water tanks, apparatus.
    • Leakage form Automatic Sprinkler Installation.
  • Add on covers
    • Earthquake (Fire and Shock)
    • Terrorism
    • Deterioration of Stocks in Cold Storage premises due to power failure following damage due to an Insured peril
    • Forest Fire
    • Impact Damage due to Insured's own Vehicles, Fork lifts and the like and articles dropped therefrom
    • Spontaneous Combustion
    • Omission to insure additions, alterations or extensions
    • Spoilage material damage cover
    • Leakage and contamination cover
    • Temporary removal of stocks.
    • Architects, Surveyors and Consulting Engineer's Fees (in excess of 3% claim amount) expenses
    • Debris Removal (in excess of 1% of claim amount) expenses
    • Loss of rent
    • Insurance of additional expenses of rent for alternative accommodation.
    • Start up Expenses.
  • Exclusions Applicable:
    • Losses/ Expenses not covered:
    • Policy excess / deductable
    • Expenses incurred on Architects, Surveyors' Consultant Engineers fees and Debris Removal in excess of 3% and 1% of claim amount respectively.
    • Loss of earnings, loss by delay, loss of market or other consequential or indirect loss or damage of any kind.
    • Perils not covered:
    • War and allied perils.
    • Ionising radiations and contamination by radioactivity.
    • Pollution or Contamination.
    • Depreciation (If any) , Salvage (If any) ,Under Insurance (If any) , Excess are generally deducted from the claim amount (This rule applies for all Insurance Companies).
    • Please ready the policy Terms and conditions for complete list
  • Premium depends upon occupancy of the risk as per IIB rates
  • To avoid under insurance deduction during a claim we strongly recommend that the Sum Insured indicates as follows:

    Building, Furniture fixtures and fittings : Reinstatement value basis (i.e New for Old)

    Plant ,Machinery, Equipment’s, Air Conditioners & Stabilizers, Generators, Transformer and accessories: New replacement value basis

    Stocks : Market Value Basis

    Under Insurance formula % = Sum Insured / New replacement value X100

    Note: Depreciation is Not applicable if Sum Insured indicates reinstatement value

    Sample of Market Value Settlement
    Replacement value at the time of Loss 1,50,00,000
    Less Depreciation say 20% 30,00,000
    Value at Risk 1,20,00,000
    Sum Insured under the policy 75,00,000
    Cost of repairs & replacements 10,00,000
    LESS: Depreciation 20% 2,00,000
    Less: Salvage 25000
    Loss Assessed 7,75,000
    Under Insurance 37.5% 2,90,625
    Claim payable 4,84,375
    Policy Excess 10000
    NET CLAIM PAYABLE 4,84,375
    Sample of Reinstatement Value Settlement
    Replacement Value at the time of reinstatement completion 1,50,00,000
    Sum Insured under the policy 1,50,00,000
    NO UNDER INSURANCE 0
    Cost of repairs & Replacements 10,00,000
    Less: Salvage 25,000
    Less: Policy Excess 10,000
    NET CLAIM PAYABLE 9,65,000
    Sample of any other Sum Insured chosen by the customer
    Replacement value at the time of reinstatement completion 1,50,00,000
    Sum Insured under the policy 1,25,00,000
    Under Insurance by 25,00,000
    % of Under Insurance 16.67%
    Cost of Repairs & Replacements 10,00,000
    Less : Salvage 25,000
    Loss Assessed 9,75,000
    Less : Under Insurance 16.67% 1,62,533
    Loss after Under Insurance 8,12,467
    Less: Policy Excess 10,000
    NET CLAIM PAYABLE 8,02,467
    Sample Settlement of Claim in respect of Stocks
    Market Value at the time of Loss 1,00,00,000
    Sum Insured under the policy 75,00,000
    Under Insurance by 25,00,000 i.e. 25%
    Claim assessed 10,00,000
    Less: Salvage 25,000
    Loss after deducting Salvage 9,75,000
    Less: Under Insurance 25% 2,43,750
    Loss payable after applying under insurance 7,31,250
    Less: Policy Excess 10,000
    NET CLAIM PAYABLE 7,21,250
  • For Fire :
  • For Sum Insured upto INR 10 Crores : 5% of the claim amount subject to a minimum of Rs.10,000/- for each and every claim
  • For Sum Insured more than INR 10 Crores to INR 100 Crores : 5% of the claim amount subject to a minimum of Rs. 25,000/- for each and every claim
  • For Sum Insured more than INR 100 Crores to INR 1500 Crores : 5% of the claim amount subject to a minimum of Rs.500,000/- for each and every claim
  • For Claims under Terrorism (applicable only if terrorism is covered)
  • Fire Policy is an annual policy, generally, renewable each year.
  • Long Term policy (for a minimum period of three years) can be considered by Insurer for covering "dwellings" only.
  • Location of Risk:
    • The proposer shall describe all locations where the properties are built or installed or stored or kept at the inception
    • Any change of location of risk shall be sent to the Insurance Company in writting and endorsement needs to be obtained
    • Change of ownership in the insured property shall be intimated to the Insurance company
    • Any material change in the location of risk, trade or manufacturing activities shall be intimated to the insurer so that the changes are endorsed.
    • The proposer can opt to seek Add on cover in respect of the following perils/ expenses at inception or during renewal of the policy on payment of additional premium:
    • Note: The add on mentioned herein is only the standard and indicative covers available in the market
    • Note: The add on covers are optional and the relevant cover related to client's risk alone needs to be opted