Fire Insurance

Fire insurance is designed to provide a financial protection for property against loss or damage caused by fire and other specific perils. Property that can be insured are : Buildings, Electrical installations, Plant & Machinery, Equipments, Goods (raw materials, semi finished, finished) in the factories as well as godowns. 

Also utilities such as water treatment plant, sub stations, pump house etc can be insured. 

Contents in residences, shops, offices, hotels etc including furnitures, fixtures and fittings are insurable. 

The standard fire and special perils policy offers the following covers:

Fire, Lightning, Impact Damage, Explosion & Implosion, Aircraft Damage, Storm, Tempest, Flood, and Inundation (STFI), Riot, Strike, Malicious Damage (RSMD) , Missile Testing, Subsidence and Landslide/ Rockslide, Bush Fire, Leakage from Automatic Sprinkler Installations, Bursting and/or overflowing of Water Tanks, apparatus and Pipes, Architect & Surveyor Fees (upto 3%), Debris Removal (upto 1%)

Exclusions

  1. A deductible of 5% of the claim amount sub to minimum of Rs 10000
  2. War and Allied perils
  3. Theft,
  4. Any consequential loss due to fire 
  5. Earthquake 
  6. Forest Fire 
  7. Spontaneous combustion.

Add ons 

  1. Architects & surveyors fees (beyond 3% of the claim amount)
  2. Removal of debris (beyond 1%)
  3. Deterioration of stock in cold storage ( if caused due to insured peril)
  4. Forest fire
  5. Spontaneous combustion
  6. Earthquake
  7. Loss of rent and additional expenses for alternate accommodation

General Conditions

  1. The policy is voidable in case of misrepresentation or non disclosure
  2. All benefits terminate after 7 days of fall or destruction of the building, unless caused by insured peril
  3. Benefits terminate if the occupation or the nature of job carried out is changed without prior notification and intimation
  4. Losses covered under marine insurance policy
  5. Policy may be cancelled either at the request of the insured or by the insurer
  6. The insured is expected to inform the company immediately on the happening of any event and file a claim with the company within 15 days of the incident occurring
  7. The company shall not be liable for any loss or damage after 12 days from the date of loss unless the claim is pending for action or referred for arbitration. 
  8. The company on the happening of the event may take possession of the building or a part thereof and deal with it as they deem fit. 
  9. All benefits under the policy shall be forfeited incase of fraudulent claim or false declaration.
  10. The company may reinstate the property if according to them it is beneficial to do so. 
  11. If the sum insured is less than then value of the property at the time of loss, the insured may bear a ratable proportion of the loss accordingly.
  12. Incase there exists a coinsurance, each company shall bear only a ratable proportion of the claim.
  13. The insured shall do or agree to do all things to preserve the company’s rights and remedies against the third parties to whom they may get subrogated to either before or after the settlement of the claim
  14. In case of dispute as to the quantum of claim, the same may be referred to an arbitrator or a panel of arbitrators.
  15. At all times during the policy  period, the sum insured will be maintained. If the liss has occurred, from the date of occurrence to the expiry of the policy a proportionate premium is payable which shall be deducted from the net claim payable by the company.

(For complete details, the documents may be referred to as these have been mentioned more for an understanding of the product)

Products offered

  1. Standard fire & Special perils policy

These are meant for offices, dwellings, schools, Theatres, Manufacturing units, godowns etc. This is a location specific cover, requires specific location wise sum insured.

  1. Floater policy

Issued for covering stocks across various locations under one sum insured. A break up of location wise sum insured need not be given for this policy. It is offered by charging a 10% floater loading.

  1. Declaration Policy

This policy is taken where there is a lot of fluctuation in the value of stocks. The minimum sum insured needed for this cover is Rs 1 crore. In this policy a monthly declaration needs to be submitted based on the value of stocks in the preceding month. The premium adjustment is made at the end of the year based on the actual value of stocks throughout the year. There is a minimum retention of 50% premium in this policy and although mid term sum insured increase is allowed, a reduction is not allowed. 

 

  1. Floater declaration policy

Floater declaration policy is similar to the declaration policy, meant for covering stocks in various locations on a floater basis. The minimum sum insured is Rs 2 crore, and has a minimum retention of 80% of the premium. 

 

Claims

Typical Documents required for assessing the Loss (the documents could vary based on nature of loss and case)

 

  1. Duly filled in claim form mentioning note on incident stating exact circumstances in which the incident took place.
  2. copy of FIR, police punchnama and fire brigade report in case of fire.
  3. Copy of metrological department in case of loss due to AOG perils
  4. Copy of agreement in case of loss has occurred in loan licensee
  5. Letter lodging monitory claim on the third party who is responsible for the loss
  6. Test reports of alleged damaged stock certifying the extent of damages & chemical configurations whether in permissible limits.
  7. Statement of claim in respect of Stocks stating each items, specification, unit rate, quantity, quality, manufacturing/ trading cost and value thereof supported by purchase invoices, delivery challans.
  8. Quotation of salvage
  9. Invoice and payment receipt for the repair/ reinstatement done.
  10. Documents to check adequacy of sum  insured viz. schedule of assets, provision balance sheet certified by auditors and value of stock available at insured location.
  11. In case of loss in Stock in process details of the batch in terms of quantity, ingredients ect.
  12. Confirmation in regard to cenvat/ VAT credit












Burglary Insurance 

Burglary Insurance can be taken by a commercial establishment, factories, godowns, shops, residences etc. Property in any form including cash in business premises can be covered. 

Coverage

The risks covered are a) theft of property by actual forceable and violent entry into the premises or exit from the premises, b) Damage to property or premises by burglars. Cash cover operates only if it is secured in a safe of an approved make and design. Cover is subject to the following clauses:

  1. The loss of cash abstracted from the safe following the use of key or duplicate key belonging to the insured is not covered unless the key or duplicate key is obtained by violence or threat of violence or through means of force. This is known as key clause.
  2. The complete accounts of the amount of cash in safe should me maintained in a place other than the safe and the liability of the insurer is limited to the amount actually shown in such records.

Exclusions

  1. Theft by persons lawfully in premises (larceny or ordinary theft) is not covered.
  2. Loss covered under fire or another policy 

The policy can be extended to cover the risk of riot strike and terrorism. Theft cover can also be offered as an add on in the burglary policy to cover subject to additional premium and conditions.

The Sum insured should represent the full value of the property or else underinsurance is applicable and only a proportionate amount is payable at the time of loss. 

However, where bulk commodity is covered or heavy machinery is covered, the policy can be taken on “First loss basis”, where a percentage of the total sum insured can be covered on discussion with the Insurance company and agreed accordingly. This is done in cases where total loss by burglary is a remote chance. 

Burglary policies can be issued on floater as well as declaration basis similar to fire policy. The premium and pricing depends upon the nature of property, commodity, value, location, safety and security measures etc. 

Incase of loss, the insured has to inform the police as well as the insurance company at the earliest. Most claims are investigated and the books are examined by the loss assessors and Insurers maintain close liaison with the police. The claim will be settled on the basis of final police report, comparing the items reported as lost and the claim bill. The claim will also be settled after obtaining a letter of subrogation and indemnity from the insured, that incase the stolen property is recovered subsequently, it becomes the property of the insurance company.

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