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Standard Fire & Special Perils Policy

Fire Insurance is governed by All India Fire Tariff effective from 31.3.2001 issued by Tariff Advisory Committee, a Statutory Body.

• The Standard Fire and Special Perils Policy covers all properties on land (excluding cost of land), moveable or immoveable, at various locations against named perils.

• Special Types of Policies are designed for Stocks (declaration and floater), Building, Plant & Machinery keeping in mind the nature of property, proposers' requirements and basis of indemnification.

• Long Term Policies available for Dwellings with suitable discounts in premium.

• Policy can be extended to cover certain additional perils and expenses at additional premium.

• Certain perils can be deleted with discount in premium rates.

• Discount in premium available for good claims experience for sum insured more than Rs. 50 crores in one location and for installation of fire extinguishing appliances.

• Concept of "one risk one rate" for all properties in an Industrial or Manufacturing Complex, for administrative convenience of the proposer.

Who can take the policy?

Any person / firm / organisation / 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 :

1. Owners of Building and contents such as house hold articles, furniture etc.

2. Shop Keepers.

3. Educational/ Research Institutions.

4. Hotels, Boarding and Lodgings, Hospitals, Clinics or such service providers.

5. Industrial and Manufacturing Firms.

6. Godown Keepers.

7. Bailees, Lessor, Lessee, Banks, Financial Institutions, Mortgagors, Mortgagees.

8. Traders in stocks.

9. Trustees, Charitable Institutions.

10. Transporters and C & F Agents.


Properties that are covered: All moveable/ immoveable properties of the proposer on land (excluding those in transit) broadly categorised as follows :

1. Building (including plinth and foundations, if required)

2. Plant & Machinery, Equipments & Accessories (including foundations, if required)

3. Stocks

4. Other Contents such as o Furniture, Fixtures and Fittings o Cables, Pipings o Spares, Tools and Stores o Household goods etc.

5. Specific Items such as bullion, unset precious stones, curios, work of arts, manuscripts, plans, drawings, securities, obligations or documents, stamps, coins or paper money, cheques, books of accounts, computer system records, explosives.

Special types of Policies available for Stocks

1. Declaration Policy

a) To care of frequent fluctuations in Stocks/ Stock Values o Minimum Sum Insured Rs. 1 crore per location.

b) Monthly declaration on any one of the following basis to be submitted before the last day of the succeeding month:

1. Average of the highest values at risk on each day


2. Highest value on any day of the month.

Refund of premium, on expiry of policy, based on the average declaration upto 50% of the provisional premium.

2. Floater Policy

a) To take care of frequent changes in values at various locations.

b) Single sum insured for all the stocks in all the locations.

c) Nominal premium loading to cover all the stocks in all the locations.

Perils Covered

• Fire

• Lightning

• Explosion / Implosion

• Aircraft damage

• Riot, Strike, Malicious and Terrorism damage (hereinafter called RSMTD Perils)

• Storm, Tempest, Flood, Inundation, 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.

• Missile Testing Operation.

• Pollution or contamination resulting from any of the above perils

• Any insured peril resulting from pollution and contamination.

• Bush Fire Expenses Covered:

The policy automatically covers the following expenses incurred following loss / damage / destruction of a covered property as a result of the operation of an insured peril.

1. Architects, Surveyors and Consulting Engineers' Fees upto 3 % of the claim amount.

2. Expenses incurred for removal of debris to clear the site upto 1 % of the claim amount.

Exclusions Applicable

1. Losses/ Expenses not covered

a) 1. 5% of each and every claim subject to minimum of Rs. 10,000 resulting from Lightning, STFI and Subsidence and Landslide including Rockslide and Rs. 10,000 in respect of all other perils.

b) Expenses incurred on Architects, Surveyors' Consultant Engineers fees and Debris Removal in excess of 3% and 1% of claim amount respectively.

c) Loss of earnings, loss by delay, loss of market or other consequential or indirect loss or damage of any kind.

2. Perils not covered

a) War and allied perils

b) Ionising radiations and contamination by radioactivity

c) Pollution or Contamination

3. Properties not covered

a) Items like manuscripts etc. unless specifically declared.

b) Cold storage stocks due to change of temperature.

c) Loss / damage/ destruction of any electrical and/or electronic machine,apparatus, fixture or fitting arising from over running, excessive pressure, short circuiting, arcing, self heating or leakage of electricity, from whatever cause including lightning.

d) Loss / damage / destruction of Boilers, Economisers or other Vessels in which steam is generated machinery or apparatus subject to Centrifugal force, by its own explosion/ implosion.

Location of Risk

1. The proposer shall describe all locations where the properties are built or installed or stored or kept at the inception

2. Any change of location of risk shall be covered on intimation of such change.

3. Change of ownership in the insured property shall be intimated so that the new owner may be covered be means of suitable endorsement. 4. Any material change in the location of risk, trade or manufacturing activities shall be intimated to the insurer so that the changes are endorsed to offer continuous cover.

Period of Coverage

1. Fire Policy is an annual policy, generally, renewable each year.

2. Long Term policy (for a minimum period of three years) can be considered for covering "dwellings" only with suitable discounts in premium.

3. Cover for STFI and RSMTD perils can be considered during currency (where they are deleted at inception by choice) in special circumstances.

4. Policy can be cancelled at any time during the currency with suitable refund of premium for the unexpired period.

Deletion of Perils at the inception

STFI and RSMTD perils can be deleted at the inception of the policy for which suitable reduction in package premium rate is allowed.

Add on covers In addition to the perils/ expenses covered, the proposer can opt to seek cover in respect of the following perils/ expenses at inception or during currency of the policy on payment of additional premium :

Perils: Loss/ damage/ destruction of the property caused by

• 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

• Earthquake (Fire and Shock).

• 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)

• Debris Removal (in excess of 1% of claim amount)

• Loss of rent.

• Insurance of additional expenses of rent for alternative accommodation.

• Start up Expenses.