Fire Insurance Policy – Risks & Perils

It is important to get adequate insurance coverage for your premises in order to provide sufficient protection to your property. Amongst all, Fire Insurance is the most common and important insurance that is required.

There are several perils can be chosen under a Fire Insurance Policy to cover your property against risk. The premium for your fire insurance policy is depending on the perils that you want to be included in. The perils that usually available by most of the fire insurance companies are as follow: -

Fire:
Destruction or damage to the property insured by its own fermentation, natural heating or spontaneous combustion or its undergoing any heating or drying process cannot be treated as damage due to fire. Spontaneous combustion means some goods, such as copra or coal, can spontaneously heat and catch fire, when stored in bulk.

Lightning:
Lightning may result in fire damage or other types of damage, such as a roof broken by a falling chimney struck by lightning or cracks in a building due to a lightning strike. Both fire and other types of damages caused by lightning are covered by the policy.

Explosion/ Implosion:
An explosion is a sudden increase in volume and release of energy in a violent manner, usually with the generation of high temperatures and the release of gases. An explosion causes pressure waves in the local medium in which it occurs. An explosion is caused inside a vessel when the pressure within the vessel exceeds the atmospheric pressure acting externally on its surface. An explosion may cause fire damage or concussion damage.

Implosion means bursting inward or collapse. This takes place when the external pressure exceeds the internal pressure. This policy, however, does not cover destruction or damage caused to the boilers (other than domestic boilers), economizers or other vessels in which steam is generated and machinery or apparatus subject to centrifugal force by its own explosion/ implosion. These risks can be covered in other special policy, which is specially designed to handle these risks.

Aircraft Damage:
The loss or damage to the property (by fire or otherwise) directly caused by aircraft and other aerial devices and/ or articles dropped there from is covered. However, destruction or damage resulting from pressure waves caused by aircraft travelling at supersonic speed is excluded from the scope of the policy.

Riot, Strike and Malicious Damage:
This peril is defined as ‘the act of any person taking part together with others in any disturbance of the public peace, or the action of a lawfully constituted authority in suppressing such act.

Storm, Tempest
The peril is to cover caused by abnormal weather conditions, not damage attributable to poor maintenance or wear and tear, such as a leaking flat roof.

Impact Damage:
Impact by any Rail/ Road vehicle or animal by direct contact with the insured property is covered. However, such vehicles or animals should not belong to or owned by the insured or any occupier of the premises or their employees while acting in the course of their employment.

Subsidence and Landslide including Rockslide:
Destruction or damage caused by Subsidence of part of the site on which the property stands or Landslide/ Rockslide is covered. While Subsidence means sinking of land or building to a lower level, Landslide means sliding down of land usually on a hill.
However, normal cracking, settlement or bedding down of new structures; settlement or movement of made up ground; coastal or river erosion; defective design or workmanship or use of defective materials; and demolition, construction, structural alterations or repair of any property or ground-works or excavations, are not covered.

Bursting and/ or overflowing of Water Tanks, Apparatus and Pipes:
Loss or damage to property by water or otherwise on account of bursting or accidental overflowing of water tanks, apparatus and pipes is covered.

Sprinkler Leakage:
It covers for property damage caused by unintentional discharge from an automatic sprinkler system. However, such destruction or damage caused by repairs or alterations to the buildings or premises; repairs removal or extension of the sprinkler installation; and defects in construction known to the insured, are not covered.