COVERAGE DUE TO EFFORTS TAKEN TO CHECK THE INTENSITY OF

FIRE

Loss or damage or destruction can be due to smoke resulting from fire, fire
fighting assistance expenses, demolitions by fire brigades for checking the
intensity of fire spreading etc.

What is meant by ‘fire’ in the insurance parlance?

There must be ignition (accompanied with heat &/or flame &/or heat i.e.
some kind Chemical reaction - oxidation/addition of oxygen from air)
A loss or damage may be said to be by fire when:

There has been ignition of insured property which was not intended to be
ignited. There must be ignition (accompanied with heat &/or flame &/or
heat i.e. some kind Chemical reaction - oxidation/addition of oxygen from
air). A loss or damage may be said to be by fire when there has been
ignition of insured property which was not intended to be ignited. When
insured property has been damaged otherwise than by ignition as a direct
consequence of the ignition of other property not intended to be ignited.
Damage by smoke, sparks, water etc. consequent on ignition of other
property.
Fire must be accidental and fortuitous.
All incidental losses covered like water damage while fighting fire, re-
fuelling charges of the Fire Extinguishers used to fight fire, etc.
]

Fire Insurance Contract

Fire Insurance Contract is an agreement enforceable at law between the

insured and the insurer whereby the insurer having received the premium,
undertakes to indemnify the insured in respect of his financial loss arising
out of any specified peril within the specified period. The Standard Fire and
Special Perils Policy is formal document issued by the Insurer expressing
the contract of fire insurance between the parties.

Basic principles of Fire Insurance Contract:

Insurable Interest :
Essential Feature – The legal right to insure.
How does the interest arise in fire insurance: May be-
By ownership,
Bailer/ Baillie,
Leaser/ Lessee;
By Agreed Bank Clause;
Goods held in trust; etc.
Actual time when the interest should exist – both at the time during
issuance of policy and also at the time of claim
Assignment of Insurable interest in various situations

Utmost Good Faith

The contract put the proposer in a superior position- facts material to the
risk with example - duty of utmost good faith evolves-reciprocal duty-
breach of duty may make the contract void or voidable depending upon the
nature of the breach- breach of condition - duration of observance of the
duty-before accepting the risk, throughout the policy- following a loss.

Indemnity
Fire Policy is a strict indemnity policy.
Limit of liability govern by
Average ClauseExcess Clause
Maximum normal liability - sum insured
Subrogation & Contribution aspects

Tariff Provisions
SEC I General Rules & Regulations
SEC II Standard Fire and Special Perils Policy
SEC III Dwellings, Offices, Hotels, Shops Located outside the compounds
of Industrial/Manufacturing Risks
SEC IV Industrial Manufacturing Risks
SEC V Utilities located outside the compound of Industrial/Mfg. Risks
SEC VI Storage Risks (Godown &/or in Open) outside the compound of
industrial/mfg. Risks.
SEC VII Tank Farms/Gas Holders outside the compound of
Industrial/MFG. Risks

Add-on Covers
Annexure A: Standard Clauses
Annexure B: Proposal Form