CHAPTER 1:

STANDARD
FIRE POLICY
 FIRE INSURANCE POLICY STRUCTURE
Fire Policy comprise of 7 Sections. They are:
Heading
The Company’s name, logo, address

Recital Clause/ - Preamble

identifying the parties to the contract proposal and the declaration which acts as the basis to the contract.

Operative Clause/ Indemnity

identities the coverage of fire and lightning as the basic cover of the fire policy.

Signature /Attestation
the policy is only valid if signed by an authorized official from the company

Conditions / Exclusions
there are 24 conditions in RFT. The conditions and exclusions governs the operation of the policy in the event of a loss
or damage to the property insured.
STANDARD FIRE POLICY
24 CONDITIONS
 CONDITION 1 : MISREPRESENTATION

A misrepresentation is a false or misleading statement or a material

omission which renders other statements misleading, with intent to
deceive.

This is a reiteration of the implied condition of utmost good faith.

A breach of the duty by the insured may be fraudulent or innocent.

If the misrepresentation or failure to disclose is fraudulent, the
insurer can avoid or set aside the policy from when it started.
CONDITION 2 :
PAYMENT OF PREMIUM

This condition merely

ensures that payment of
premium is properly
made to the company.

printed form of receipt

signed by an official or
duly appointed agaent of
the company obtained.
 CONDITION 3 : OTHER INSURANCES

This condition merely Insurers would for the

ensures that insured purpose of enforcing the
notify the insurer if they principle of contribution
have more than one naturally like to ascertain
policy cover same the other insurances
interest, same subject effected to cover the
matter of insurance. insured property.
CONDITION 4 :
FALL AND
DISPLACEMENT

This condition provides

automatic cancellation of cover
in the event of collapse of the
building which would amount to
a radical alteration in the risk
originally accepted.

The cancellation of cover,

however, does not operate if the
fall or displacement is caused by
fire. The burden of proof that it
was so caused is upon the
insured.
CONDITION 5 : EXCLUDES CERTAIN TYPES OF
LOSSES

Loss or damage occasioned Loss or damage directly or

Loss or damage to property
by or through or in indirectly caused by or
occasioned by its own
Loss by theft during or after consequence of (1) the arising from or in
fermentation, natural heating
the occurrence of a fire. burning of property by order consequence of or
or spontaneous combustion
of any public authority and contributed to by nuclear
or by its undergoing any
(2) subterranean fire. weapons material.
heating or drying process.
CONDITION 6 : EXCLUDED
CERTAIN SPECIFIED
PERILS

Mutiny, riot,
military or popular
rising,
insurrection,
rebellion,
War, invasion, act
Typhoon, revolution, military
Earthquake, of foreign enemy,
hurricane, or usurped power,
volcanic eruption hostilities or
tornado, cyclone martial law or
or other warlike operations
or other state of siege or
convulsion of (whether war be
atmospheric any of the events
nature. declared or not) or
disturbance or causes which
civil war.
determine the
proclamation or
maintenance of
martial law or
state of siege.
 estruction or damage caused by pollution
mination EXCEPT destruction of or
o the property insured caused by :

CONDITION 7 :
EXCLUSION OF LIABILITY
AS A RESULT OF
POLLUTION
Pollution or contamination which itself
results from a contingency (peril) hereby
insured against.
Any contingency (peril) hereby insured
against which itself results from pollution
or contamination.
CONDITION 8 : EXCLUDES CERTAIN CLASSES OF
PROPERTY
Any curiosity or work of art
Goods held in trust or on Bullion or unset precious
for an amount exceeding
commission stones
RM500

Manuscripts, plans,
drawings or designs,
patterns, models or moulds
Securities, obligations or
documents of any kind,
Coal, against loss or
stamps, coins or paper
damage occasioned by its
money, cheques, books of
own spontaneous
account or other business
combustion.
books or computer system
records.

Any loss or damage occasioned by or

Any loss or damage through or in consequence of the burning,
Explosives occasioned by or through or whether accidental or otherwise, of forests,
in consequence of explosion bush, lalang, prairie, pampas or jungle and
the clearing of lands by fire.
CONDITION 9 : ALTERATION
If the trade or manufacture carried on be altered or if the nature of the occupation of or other circumstances affecting
the building insured or containing the insured property be changed in such a way as to increase the risk of loss or
damage by fire.

If the building insured or containing the insured property becomes unoccupied and so remains for a period of more
than thirty (30) days

If property insured be removed to any building or place other than that in which it is herein stated to be insured

If the interest in the property insured pass from the insured otherwise than by will or operation of law

If a notice to quit by any order by the local authorities for the requisition or acquisition of the land on which the
insured’s property is situated has been issued (notice to quit)
CONDITION 10 : MARINE CLAUSE

This condition relieves insurers of any liability for loss

which is recoverable under a marine policy except in
respect of excess beyond the amount recoverable
thereunder.
This condition is necessary because marine policies
include cover in respect of fire and it is possible for
fire and marine policies to overlap for that period
during storage or merchandise in port premises.
CONDITION 11 : CANCELLATION
⮚ This condition provides for cancellation of the policy by either party by
giving notice to the other party.
⮚ It is to be noted that no time limit is stipulated for giving notice.
⮚ If the policy is cancelled by the insured, refund of premium for the
unexpired term of the policy is affected on the basis of the short period
scale (refer Section 1 of the Fire Tariff).
⮚ If the insurer cancels the policy proportionate refund of premium is made
to the insured.
 CONDITION 12 : lOSS PROCEDURE

Submission within 15
days of the loss or
within such extension
as may be granted by
the insurer, of a
Submission of all A declaration, on oath
written statement of
reasonable or in other legal form
Immediate notification the claim giving full
information and proof of the truth of the
of the loss to the particulars of the loss
in respect of the claim claim but this is rarely
insurer. or damage and of the
at the insured’s insisted upon in
property affected and
expense. practice.
details of other
insurances, if any.
Usually, the insurers
supply a claim form
for the purpose.
CONDITION 13 : COST INCURRED IN
EXTINGUISHING FIRE
Wages of the insured’s employees other
than full time members of a works fire
brigade.

The cost of replacement of fire fighting

appliances and destruction of or damage to
materials (including employees’ clothing
and personal effects).

Fire brigade charges (if any)

CONDITION 14 : INSURER’S RIGHTS IN THE
EVENT OF LOSS
This condition confers certain
rights on the insurers in the
event of a claim.
These rights are necessary for
the insurers to ascertain the
cause and extent of loss or
damage to minimize the
damage and to protect the
salvage.
The condition enables the loss
assessors to enter the premises
to establish the cause and
extent of loss and to protect the
salvage and minimize the
damage that may be caused in
the process of extinguishment.
The right of entry is also
explicitly reserved by insurers to
be able to enter the insured
premises without committing the
offence of trespass.
CONDITION 15 : FRAUD
The claim if fraudulent

The claim is supported by a false declaration.

Fraud means are used by the insured or anyone acting on

his behalf.
Loss or damage is caused by the willful act of the insured or
with his connivance.
If the claim be made and rejected and an action or suit be
not commenced within 3 months after such rejection.
Within 3 months after the arbitrators/umpire shall have made
their award.
CONDITION 16 : REINSTATEMENT
Reinstatement is at the option of the insurer. The insured has no right to claim reinstatement.

Reinstatement shall not be exact or complete but shall be in reasonably sufficient manner.

Expenditure is limited to the cost of reinstating the property to its pre-fire condition and to the sum insured.

It is the duty of the insured to furnish at his expense, the insurer with all plans and such other particulars as may be required.

Any act done by the insurer with a view to reinstatement is without prejudice to the final decision regarding reinstatement.

If due to municipal or other regulations in respect of building construction etc. the insurer is unable to reinstate then liability is
limited to such sum as would be requisite to reinstate such property if the same could lawfully be reinstated to its former
condition.
 CONDITION 17 :
SUBROGATION

•This condition provides that the

insured shall render necessary and
reasonable assistance to the insurer
to recover the loss from any third
party who was responsible for the
loss. In other words, the condition
provides for subrogation of insured’s
rights to the insurers. This condition
supports the principle of indemnity in
insurance.
CONDITION 18 :
CONTRIBUTION

•This condition provides that in the

event of double insurance the insurers’
liability will be limited to rateable
proportion of the loss. This condition
also supports the principle of
indemnity in insurance.
CONDITION 19 : AVERAGE – UNDER INSURANCE

the sum insured under the policy is less than the value of the property on the date of fire the
amount of loss payable will be proportionately reduced.
The object of the condition is to penalize under insurance by a corresponding under
payment of claim.If the policy covers more than one item of property each item of property
will be separately subject to average.

AMOUNT SUM
OF LOSS INSURED
CONDITION 20 : AUTOMATIC
REINSTATEMENT OF SUM INSURED
•In the event of a loss, the insurance
shall be maintained in force for the
full sum insured and the insured
shall be liable to pay an additional
premium.
 CONDITION 21 : ARBITRATION
•The object of this condition is to ensure that disputes are settled quickly.
Arbitration procedure is less expensive than litigation and this results in
savings. Arbitration is also a private process hence it avoids undue
publicity to the insurers of an adverse nature.
•The important feature of this condition:
• Only difference in respect of quantum of claim is to be referred to
arbitration. Questions involving liability under the policy are not to be
referred to arbitration.
• The arbitrator is to be appointed in writing by the parties in difference.
• If the parties cannot agree upon a single arbitrator, two arbitrators are
to be appointed of whom one shall be appointed in writing by each of
the parties within two calendar months after received written notice to
do so by the other party.
• If either party refuses or fails to appoint arbitrator, the other party is at
liberty to appoint a sole arbitrator.
• If there is disagreement between the arbitrators, the difference is to be
resolved by an umpire appointed by the arbitrators.
CONDITION 22 :
LIMITATION
The liability of the insurer for any loss
is extinguished after the expiry of 12
months from the date of loss unless
the claim is subject of pending action
or arbitration

This condition provides necessary

protection to the insurer against
unnecessary delay on the part of the
insured in making the claims. It is not
possible for the insurer to keep its
accounts open for an indefinite period.
CONDITION 23 : CONDITION 24 :
NOTICE POLICY & SCHEDULE

Every notice and communication The policy and the schedule herein
required by these conditions shall be read together as one contract.
must be in writing or printed.
THANK YOU