Standard Fire & Special Perils Policy (SFSP)
A house/property is the most material possession of a man. It takes years of hard work and toils to buy your dream house or venture into a business entity. You have an obligation to protect it, guard it against all-natural calamities and, manmade losses. Memories of recent floods and landslides are yet to fade away from our minds. A fire insurance policy shall protect you from all these risks.
In terms of governance of the business, Corporations today face vast exposure in all areas of business, from property to human resources. With natural and man-made catastrophes hindering the growth of the economy, there is a need to cover these unforeseen circumstances.
Standard Fire & Allied perils insurance policy provides you with cover for accidental physical loss of or damage to the Property Insured whilst situated at the premises described in the policy.
Building (including plinth and foundation), plant and machinery, stocks, electrical installations, furniture, fixtures and fittings, and other contents can be covered under Standard Fire & Special Perils Policy (SFSP).
The policy covers loss or damage caused to the insured’s property resulting from Fire, Lightning, Explosion/Implosion, Riot, Strike, Malicious damage (RSMD) Storm, Tempest, Cyclone, Typhoon, Hurricane, Tornado, Flood, Inundation(STFI), etc.
The policy can be extended to cover the following (on payment of the additional premium):
- Earthquake (Fire and Shock only).
- Removal of debris.
- Architects Surveyors Consulting Engineers fees.
- Impact Damage due to the insured’s own rail, road Vehicles, forklifts, cranes, stackers, and the like.
- Omission to Insure additions, alteration, or extensions.
- Spontaneous Combustion.
- Leakage and Contamination.
- Spoilage Material Damage to plant & machinery and stocks.
- Startup expenses.
- Loss of rent.
- Additional expenses for alternative accommodation.
- Terrorism.
To overcome growing complexities and uncertainty, the policy can be further extended to cover Business Interruption Cover, or Consequential Losses Cover, or popularly known as Loss Of Profit, and many other covers specific to your business.
Fire Loss of Profit Insurance Policy
As a result of a loss due to the risk of fire and damages, entrepreneurs often suffer financial losses due to loss of gross profits on account of reduction in turn over, in addition to increased cost of working during the interruption period.
Besides the business coming to a halt, there are certain standing charges (fixed expenses) such as bank interests, employee’s salaries, rent, and electricity, which will continue to be incurred irrespective of the situation that the insured is placed in.
Fire Consequential Loss Insurance Policy is complementary to the traditional Standard Fire and Specials Perils Policy and covers the loss of Gross Profit due to reduction in turnover and increased cost of working.
This policy can be taken only if there exist Standard Fire and Special Perils Policy for the risk. It covers:
- Net profit due to the stoppage of business as a result of an insured peril.
- Standing charges which continue to accrue in spite of stoppage of business.
- Additional expenditure incurred by the insured to maintain normal business activity during the period in which the normal business is affected.
- The indemnity period commences with the date of damage and lasts till such a time as the business is restored to its pre damaged level or the period stipulated policy whichever comes first.
- The policy insures earnings of the business lost during the indemnity period.
- The consequential loss policy will follow the coverage of Material Damage policy (Standard Fire and Special Perils Policy). It is a condition of the consequential loss policy that for any loss under the policy will be payable only if the claim under Material Damage policy (under Standard Fire and Special Perils Policy) is admissible.
- It will not be possible to extend any peril in the consequential loss policy unless the peril is also an extension to the Material Damage policy (Standard Fire and Special Perils Policy).
- But, there are some covers which are critical in the consequential policy that can be extended to make the policy more comprehensive.
