Fire Insurance

• Fire insurance meaning: Insurance coverage for business property against fire and related risks.

• Importance of fire insurance: Fire-related incidents remain high in India, and loss or damage can lead to extensive financial losses. Business continuity during recovery may be essential.

• Key features of fire insurance: Choice of two policy options, Flexible features, coverage beyond fire-related risks, and optional add-ons to enhance coverage.

• Key factors to consider: Total value of insured properties and fire insurance policy inclusions and exclusions.

• Factors that affect fire insurance premiums: Nature of business, risk profile, risk location, type of policy and add-on chosen.

• Because the Risk of Fire Damage is High: According to the Accidental Deaths and Suicides in India (ADSI) data, the number of fire accidents remains significantly high. India recorded 7,566 fire accidents in 2022 and 7,054 accidents in 2023.

• To Protect your Business Financially: A fire breakout can lead to severe financial losses for businesses. With a fire insurance policy, you can cover these losses and other related expenses, such as the cost of clearing debris.

• For Wider Protection: Fire insurance also covers risks like damage caused by natural calamities, riots and theft. It can also be customised with add-ons for specific risks, such as stocks in cold storage and contract works.

• To Ensure Business Continuity: Fires can cause temporary shutdowns and disrupt business operations. With fire insurance, you can recover from these losses and resume operations sooner.

• For Building Trust and Credibility: When you invest in a fire policy, it reflects a commitment to risk management. Customers, partners, and stakeholders can feel reassured knowing the business is prepared for unforeseen situations.

TATA AIG offers two fire insurance plans to cover business properties of different sizes and risk profiles. You can also enhance protection with a wide range of add-ons to address specific risks that may impact your business operations.

As both policies cover a wide range of business risks beyond fire, such as landslides and impact damage, they are also known as the Standard Fire and Special Perils Insurance Policies.

While the risks covered and exclusions remain similar, the two plans differ mainly in sum insured as follows:

TATA AIG also offers the option to combine the coverage to include financial losses related to burglary under Fire and Burglary Insurance.

To extend the fire policy coverage for risks such as money insurance, public liability, plate glass, electronic equipment, and machinery breakdown, you can explore shop insurance.

Inclusions

• Fire

• Explosion or Implosion

• Bush fire, forest fire, jungle fire

• Natural disasters like earthquakes, storms, cyclones, floods, etc.

• Subsidence of land, landslide, or rockslide

• Impact damage due to falling trees, vehicle collisions, etc.

• Lightning

• Riots, strikes, and other man-made damages

• Bursting or overflowing of water tanks, apparatus and pipes

• Missile testing operations

• Theft

Additional Coverage Benefits

• Coverage for newly acquired or extended business property.

• Coverage for stocks in other locations on floater basis.

• Temporary removal of stocks.

• Cover for specific contents like money and computer programmes.

• Start-up expenses and professional fees

• Costs for removing debris.

• Costs incurred to comply with Government regulations.

Exclusions

• Fire due to heating or drying process and burning by a Government order.

• An explosion or implosion caused by centrifugal force or by machinery in which steam is generated.

• Subsidence of land caused by normal cracking, coastal or river erosion, and defective design.

• Impact damage caused by aircraft at supersonic speeds and vehicles, animals, or aircraft owned by the insured.

• Interruption or slowdown of work, the Government taking over property, or illegal occupation of buildings.

• The leakage from automatic sprinkler installations due to repairs, removal, or extension, defects in the construction, and repairs in the building.

• Theft outside business premises.

• Loss or damage to electrical or electronic equipment due to over-running, short circuiting, or self-heating, unless specified under the policy.

• War, ionising radiation, or radioactive toxicity.

• Terrorism, unless specified under the policy.

• Pollution or contamination.

Please note: We have highlighted the key aspects of the inclusions and common exclusions. Kindly refer to the policy document for complete details.

Optional add-ons enhance your fire insurance policy coverage for additional protection beyond the standard policy. You can choose the add-on covers based on your risks specific to your business.

Add-on Covers for Property and Asset Protection

• Floater Cover: For stocks stored across multiple locations.

• Accidental Damage to Property: Caused by external, violent, and visible incidents.

• Electrical Injury: For damage to electrical equipment due to a short circuit or overload.

• Contract Works: For permanent and temporary works under a contract.

• Brands and Trademarks: For finished goods. It also allows for salvaging them or re-labelling them to secure the brand.

• Sabotage and Terrorism Damage Cover: For damage caused by acts of terrorism.

Business Expansion and Continuity

• Omission to Insure Additions, Alterations, or Extensions: For newly built or acquired business properties.

• New Location Cover: For newly acquired property at a new location.

• Escalation Clause: For a regular increase in the sum insured throughout the policy period.

• Rent Insurance: To cover additional rent expenses incurred for alternate premises or loss of rental income.

• Protection and Preservation of Property: For expenses incurred to protect or preserve the damaged property.

• Involuntary Betterment: For replacement with a similar new property in quality and functionality.

Stock, Financial, and Industry-specific Covers

• Waiver of Underinsurance: Claim amount will not be reduced due to a lower sum insured.

• Detritation of Stocks in Cold Storage: To cover stock damaged due to a power failure or machinery breakdown.

• Declaration Policy for Stocks: Covers fluctuating stock values throughout the policy period.

• Fuel Contamination during Decantation: For loss due to contamination caused by water or alternate fuel (for diesel and petrol pump stations).

• Wrong Fuelling of Vehicles: Covers the insured’s liability for losses to customer vehicles caused by incorrect fuelling.

Follow these simple steps within the required timelines for a smooth and quick fire claim process:

• Inform TATA AIG: Notify us immediately or within 7 days by calling 022 6489 8282 or sending an email to general.claims@tataaig.com. Provide your policy details and share a description of the incident.

• Prevent Further Loss & Inform Authorities: Take necessary steps to prevent further damage and avoid disposing away items before inspection. Inform the fire brigade, police or relevant authorities, if required.

• Assist with the Survey Process: Provide the required documents to the surveyor during the inspection.

• Submit Documents: Fill out the claim form and submit the required supporting documents within 30 days.

• Claim Settlement: Once the documents are verified and the claim is approved, the claim amount will be settled.

Here are some commonly required documents for filing a fire insurance claim. Additional documents may be requested based on the nature of the incident.

• Duly filled claim form

• Photographs or videos of the damage

• Fire brigade report or FIR copy

• Newspaper clipping or news report, if available

• Valuation-related documents

• KYC documents (ID and address proof)

• Repair or replacement estimates

• Purchase invoices or bills.

• Stock register or inventory records

On September 23, 2024, a fire broke out at Tata Power’s Trombay plant in Mumbai. A short circuit in the wiring room caused the fire. It completely destroyed the main control room and shut down operations.

The company filed an insurance claim of around ₹221 crore for the losses. Since large claims can take time for assessment and final settlement, the insurer paid an advance of ₹50 crore. This amount was released to support immediate repair and restoration work and help resume operations faster.

This incident highlights how a fire insurance policy keeps a business running even after a major fire accident.

The fire insurance calculator available at the top of this page can help you calculate your premium instantly. Just enter the required details and get your premium quote instantly.

Here are some of the key factors that can affect your premium:

• Nature of Business: Businesses with a higher risk exposure, such as factories or warehouses, may have higher premiums than low-risk properties like shops or offices.

• Risk Profile: The type of materials stored, machinery used, and day-to-day operations can impact the overall risk level and premium.

• Location Risk: Properties located in fire-prone or disaster-prone areas may have higher premiums.

• Coverage Amount: The sum insured will be based on your asset value, including building, machinery, or stock. A higher coverage amount increases the premium.

• Add-Ons Opted: Additional optional covers added to the policy will increase the premium.