Fire Insurance

Your SI should not exceed 50Cr limit

Fire Insurance

Fire can ruin your years of hard work and turn your dream home or business property into ashes within a matter of minutes. With the increasing cost of real estate, the repair and replacement cost of property has shot up immensely.

A fire insurance policy can protect your savings against the financial burden of repairing, replacing, and reconstructing property damaged by fire and other perils.

What is Fire Insurance?

Fire insurance is a type of property insurance that individuals, or corporate or corporate entities can opt for to cover losses or damages caused to insured property due to fire. This property can be office buildings, private property like houses, or any other site or place where you run your business.

In short, it is essentially a contract between the insured and the insurance provider, where the insurance provider agrees to cover the financial loss that the insured suffers due to a fire outbreak.

Since fire insurance policies are unique, there are some key points to note when filing a claim. First, the loss caused by the fire must satisfy two conditions:

It Must be Due to an Actual Fire: No fire-related damages will be covered unless specifically stated in the policy.

The Fire Must be Accidental: No intentional or willful fire damage to the insured property on your part will be covered.

Second, any loss due to lightning strikes or natural disasters (included in the policy) leading to fire outbursts will be covered, and the amount claimed in most cases will be decided after quantifying the loss.

Why is Fire Insurance Important?

Protects Against Financial Losses

When operating a business of any kind, getting some form of property insurance is crucial to protect against financial losses. It is because unforeseen events like fire and natural disasters can cause excessive and, in some cases, a total loss of goods.

Without insurance, you will need to bear these expenses out of pocket. Moreover, repair and reconstruction costs are not cheap, so it is better to get fire insurance to protect against such damages at an earlier date.

Covers Property Damage

A fire insurance policy covers the repair and replacement costs of movable and immovable property in case of a fire explosion. Property types covered under a fire insurance plan include furnishings, office buildings, plant and machinery, fixtures, fittings, and stock.

Stocks here can include:

Finished goods, semi-finished goods, stock in process, stock invoiced and ready for dispatch.

Raw materials and packing materials.

Stocks held in trust for which the insured is responsible.

Stocks in Open in the Insured Premises.

Coverage for Other Perils

Businesses operating in certain regions are often more prone to fires and natural disasters. A fire insurance policy is the best way to ensure these properties are financially secured.

Moreover, fire insurance policies provide coverage for theft caused by fires and natural disasters. These plans also cover other perils like malicious damage, land subsidence, impact damages, etc.

Types of Fire Insurance

At Tata AIG, we offer a bundled Fire and Burglary Insurance Plan with two coverage limits - Business Guard Sookshma Policy and Business Guard Laghu Policy.

You can pick either one according to your desired coverage.

Business Guard Sookshma Package Policy

This fire insurance policy covers damages and losses for a sum insured that caps at ₹5 Crores. It covers physical loss by damage or destruction of the insured property due to unforeseen events outside your control. It includes fires, natural disasters, impact damage, riots, strikes, and structural damages unknown to you.

Business Guard Laghu Package Policy

Like our Sookshma Policy, the Laghu Policy also offers financial assistance in the event of damages caused to your insured property due to fires, natural disasters, and burglary. This fire insurance policy covers damages and losses for a sum insured exceeding ₹5 Crores and caps at ₹50 Crores.

Details of Coverage Under Both Policies by Tata AIG

The clauses for the plans stated below apply to both plans. Here are the losses we cover under our base covers after the occurrence of an insured event:

Partial Loss: Under a partial loss policy, the portion of the stock or property damaged is reimbursed after the incurred loss/occurrence of the insured event.

If your insured property is a partial loss, then we will reimburse you for the cost of repairs to the extent required to bring that property to a condition the same as, but not superior, better, or more extensive than its condition if it were new on the date it was damaged.

In case of a partial loss on the stock, we will reimburse you to the extent of the loss incurred.

Total Loss: As the name suggests, a total loss covers the full value of the insured property lost. Here are the losses covered under this policy under a total loss:

For Building or Plant and Machinery or Furniture, Fixture, Fittings: In cases of a total loss, we will pay for the total value of the building, plant and machinery or furniture, fixture, and fittings.

If required, we will also pay to reconstruct a new building on the same or another site.

In case of reconstruction on another site, we will only pay up to the amount required to reconstruct the property on the same site. Any additional expenses incurred due to site changes must be borne by you.

For Stock: For total losses in stock, we will pay you:

The landed cost at your premises for stock of raw materials.

The total manufacturing cost for stock of finished goods.

The input value of stock in process at the time of loss.

In Case Of Goods Sold But Not Dispatched: The claim amount will be paid based on the contract price of goods if the sale is cancelled wholly or to the extent of loss or damage caused by an insured event.

Additional Coverage Under the Business Guard Laghu Policy: With this plan, you can modify the built-in covers through additions, alterations, and extensions. We offer coverage for buildings, plants, machinery, furniture and fittings, and other contents you erect or acquire or for which you are responsible.

In the case of the latter, we will provide coverage as follows:

You must inform us of the newly erected property within 7 days of it becoming known.

The item or property is not otherwise insured.

The maximum limit under this cover is 15% (excluding stocks).

The newly erected property is subject to underinsurance clauses in our policy. Under this section, we will waive underinsurance up to 15%.

Characteristics of Fire Insurance

Extensive List of Inclusions: We understand that a fire can be caused for various reasons. Therefore, our fire insurance policy covers losses and damages to your property and valuables caused due to multiple reasons like lightning, spontaneous combustion, explosions, etc.

In-Built Covers: We provide in-built covers with your fire insurance policy for expenses such as professional fees for architects, surveyors, and consulting engineers, the cost of removal of debris, temporary removal of stock, and more, as mentioned in the policy schedule.

Easy Claim Process: We understand the inconvenience that property damage causes. Hence, we have a quick and straightforward claim process to support you in such difficult times. Moreover, you can track your claim status online anytime you want.

Suitable For All Business Sizes: From a Kirana store to a shopping mall, you can secure your business, however big or small, with our fire insurance policy.

Inclusions Under Fire Insurance

At Tata AIG, the fire insurance policy comes bundled with the burglary insurance policy to provide wider coverage under a combined Fire and Burglary Insurance Plan.

However, for a detailed understanding of the fire insurance part of the policy, here are the policy inclusions for damages against fire and similar perils:

" "
Insured Events Details 
FirePhysical damage, loss, or destruction caused to the insured property. It includes fires caused due to its own fermentation, natural heating, or spontaneous combustion.
Bush Fire/Forest Fire/Jungle Fire Spontaneous fires due to extreme weather conditions or setting fire to overgrown bushes, which end up causing damage to the insured property, are covered. 
Explosion or Implosion  Damages caused by fire explosions or implosions. (Explosions here would mean the violent tearing apart of a permanent structure and the forceful ejection of its components). 
Lightning  Damages and fire outbursts caused by lightning are covered. 
Landslides/Rockslides  Property damages resulting from land subsidence (the sudden sinking of land), landslides, and rockslides.
Impact Damage  Damages caused by the impact of external physical objects like vehicles, animals, falling trees, aircraft, walls, etc. 
Missile Testing Operations Damages or losses incurred due to missile testing operations performed on property premises. 
Riots, Strikes, and Malicious Damages Damages and losses caused to the insured property due to riots, strikes, or fear-mongering activity.
Bursting or Overflowing of Water Tanks, Apparatus, and Pipes Water damage caused to the insured property from the mentioned causes. 
Leakage From Automatic Sprinkler Installations Damage from accidental water discharge from automatic sprinkler systems 
Earthquakes and Volcanic Eruptions Violent destruction and loss caused to insured property or goods from the mentioned perils. 
Storms, Cyclones, Typhoons, Tempests, Hurricanes, Tornados, Tsunamis, Floods and Inundations
Theft  Within 7 days from the occurrence of and proximately caused by any of the above-insured events. 

Exclusions Under Fire Insurance

Here is the list of exclusions that fall under the fire insurance part of the Tata AIG Fire and Burglary Insurance:

" " " " " " " " " " " " " "
Exclusions Under Insured Events Details 
FireFires Caused By: Heating or drying processes. Burning of Insured Property by order of any Public Authority
Explosion or implosion Caused to boilers, economisers, other vessels, machinery, or apparatus in which steam is generated, or their contents, resulting from their own explosion or implosion. Caused by centrifugal forces.
Landslides/Rockslides Caused By: Normal cracking, settlement, or bedding down of new structures. The settlement or movement of the made-up ground. Coastal or river erosion. Defective design or workmanship or use of defective materials. Demolition, construction, structural alterations or repair of any property, groundworks, or excavations
Impact Damage Pressure waves caused by aircraft or other aerial or space devices travelling at sonic or supersonic speeds. Damage by a vehicle, animal, or aircraft belonging to or owned by the insured or their employee(s) caused during employment.
Leakage From Automatic Sprinkler InstallationsRepairs or alterations in the building in which your business is located. Repairs, removal, or extension of any sprinkler installation. Defects in the construction known to you
Riots, Strikes, and Malicious Damages Caused By: Total or partial cessation of work, retardation/interruption/cessation of any process/operations/omissions of any kind. Temporary or permanent dispossession (of property), confiscation, commandeering, requisition, or destruction by order of the government or any lawful authority. Permanent dispossession of any building by unlawful occupation by any person.
Theft Not Covered if it is: Of any article or item outside your premises. Of any article or thing attached from the outside of the outer walls or the roof of your premises, unless securely mounted.

Who Needs Fire Insurance?

Fire and other perils are sudden and unpredictable; in most cases, they result in excessive loss and damage. Therefore, a fire insurance plan suits homeowners and businesses in various fields. If you belong to one or more of the following categories, consider securing your property against fire and other perils with a fire insurance policy:

Owners of a housing property: No matter how big or small, your house is undoubtedly one of your most valuable possessions. So, securing your dream abode against damages caused by fire makes sense.

Renters: It is a common misconception that fire insurance is only for home or business owners. However, even if you have rented a house, you may have expensive appliances, gadgets, and other possessions. With Tata AIG, you can insure what you own in a rented property and secure yourself against probable losses.

Owners of Small Businesses: It takes extensive effort and considerable finances to set up even a small business. Therefore, if you run a small independent business like a grocery store or a salon, you can protect it for a reasonable premium against fire with a fire insurance policy.

Owners of Medium-Size Businesses: A fire insurance policy is suitable for medium-sized businesses also, like a chain of restaurants or apparel stores. You can insure your businesses against minor or major damages due to unexpected and unpleasant fires and other insured incidents.

Owners of Large Businesses: Large business owners may have multiple properties, like factories, godowns, warehouses, and sale outlets, to support their business operations. The stakes are high for such a large scale of operations, and even a small damage can result in significant losses. With our fire insurance policy, you can secure all your properties and reduce the risk of loss or damage.

Add-On Coverage in Fire Insurance

Enhance the protection under your fire insurance policy with the following add-on covers available with Tata AIG:**

Floater Cover: Covers physical loss or damage to stocks at more than one location.

Declaration Policy for Stocks: Covers stock on receipt of provisional premium based on the declaration of the value of the stock.

Omission to Insure, Additions, Alterations, or Extensions: Coverage for buildings and/ or machinery, plant, and other contents as defined, which you erect or acquire or become responsible for, up to a limit of 10% of the total sum insured.

Escalation Clause: Covers automatic regular increase in the sum insured throughout the period of the policy in return for an additional premium to be paid in advance.

Accidental Damage Cover: Covers accidental loss or damage to the property by any external, visible, and violent means.

Involuntary Betterment: Covers cost incurred to replace damaged property wherein the like, kind, and quality are not obtainable due to technological obsolescence or statutory or regulatory requirements, with one which is capable of performing the same function.

Rent Insurance: Covers additional rent incurred by you for alternate premises in the event of damage to the insured property by an insured peril.

Protection and Preservation of Property: Covers reasonable and necessary costs incurred for actions to temporarily protect or preserve insured property, provided such actions are necessary due to actual or to prevent immediately impending, insured physical loss or damage to such insured property.

Contract Works: Covers permanent works and temporary works erected or in the course of erection in performance of the contract and the materials and all other property of whatsoever nature or description for incorporation therein.

Deterioration of Stocks in Cold Storage Premises: Covers damage to the insured property caused by a change of temperature as a consequence of a failure of the electric supply.

New Location Cover: Covers the property at a new location which is acquired by you. The property will be automatically covered for a period of up to 15 days from the date of acquisition.

Brands and Trademarks: Covers loss or damage to the branded or labelled property insured in the event of loss or damage by an insured peril to the goods bearing a brand or trademark. The salvage value of such damaged goods will belong to the insurer and shall be determined after removal in the customary manner of all such brands or trademarks.

Electrical Injury: Covers any loss or damage by fire to the electrical appliance and installation insured under the policy, arising from or occasioned by overrunning, excessive pressure, short circuit, arcing, self-heating, or leakage of electricity.

Fuel Contamination during Decantation: Cover against the loss arising due to contamination caused by water or alternate fuel in the underground fuel tanks during the decantation process.

Wrong Fueling of Vehicles: Covers your liability to your customers arising out of wrong fueling of vehicles by your employees.

Terrorism Damage: Covers physical loss or physical damage occurring during the period of the policy caused by an act of sabotage and/ or terrorism to the locations mentioned, subject to the exclusions, limits, and excess.

Public Liability: Public liability in the event of food and beverage contamination, other facilities extension, valuables under care, custody and control extension, and an act of God extension.

Plate Glass: Cost of repairing and reinstating frames and/or framework

All Risk: Reinstatement value cover and omission to insure.

Burglary: Theft, omission to insure, a non-occupancy clause of 30 days.

Consequential Loss (Fire): Extension to cover the customers’ premises, extension to cover the insured property stored in other situations, extension to cover loss due to accidental failure of public utility, and prevention of access.

Electronic Equipment: Omission to insure additions, alterations, or extensions.

Neon Sign: Third-party liability

Fire Insurance Claim Process

Follow these steps to file a claim against your Fire and Burglary Insurance Policy with Tata AIG:

Visit the Tata AIG official website.

Click on 'Claims' on the top tab of the homepage.

Click 'Initiate A Claim' and choose your product type; in this case, it will be 'AIGC.'

Login with your registered phone number.

Fill out the claims form and upload any necessary documents.

After submitting your claim, an insurance agent will contact you to guide you through the process.

Documents Required for Fire Insurance Claim

An authorised copy of the fire insurance policy. The copy must include the policy schedule and clauses.

A completely filled-out claim form.

Substantial proof of the incident if the claim was published in newspapers or news reports.

Records of previously filed claims, if any.

Fire brigade report.

Forensics report if needed.

A copy of the investigation report.


Eligibility Criteria to Buy Fire Insurance Policy

If you fulfil any of the following criteria, you can buy fire insurance to secure your property:

You own an organisation or a firm

You own a building, furniture, or household items

You are a retailer, shopkeeper, or godown keeper

You run a bank, or a financial/ educational/ research institution

You are a part of the service industry and own a hotel, hospital, restaurant, etc.

You run a manufacturing or industrial firm.

Selecting Sum Insured for Fire Insurance

Fire can have devastating effects on your personal or business property. The restoration and repair costs for such damages can be exceptionally high. If you have a fire insurance policy, obviously, you will depend on it for support if your property suffers damages due to any of the insured events. However, if the sum insured is insufficient under your fire insurance policy, it may not be enough to cover your damages.

On the other hand, if you select an unnecessarily high sum insured, you will end up paying an unnecessarily high premium against the policy. Therefore, it is essential to choose the right sum insured for your fire insurance policy.

You can consider the value of the following items when deciding the sum insured on your fire insurance plan so that there are sufficient funds to cover their cost if a need arises:

  • Stock

  • Valuables, expensive and precious materials, and high-priced antique items.

  • Building

  • Plant and machinery

  • Furniture

  • Other important personal items

Tips to File a Fire Insurance Claim

Inform the insurer immediately: As soon as any loss or physical damage occurs to an insured property due to an insured event, it is advisable to immediately give notice to the insurer of the loss or damage. It is necessary so that the insurer can survey and investigate the loss or damage. Add the following information to the notice:

i. Policy Number,

ii. Name of policyholder

iii. Details of the report to the police that you have made

iv. Details of the report to any authority that you made

v. Details of the insured event

vi. A brief statement of the loss

vii. Particulars of any other insurance of the insured property, your premises, or any other property on your premises

viii. Details of loss or damage under add-ons, if any

ix. Photographs of loss or physical damage, wherever possible

Take necessary steps to prevent loss and damage: Take all reasonable steps to prevent further loss or damage to the insured property. Do not sell, dispose, or give away any damaged items of any property. Further, do not wash or clean, or remove any damaged item or debris except for any urgent necessity, and do not carry out repairs unless such repairs are urgent and you cannot contact the insurer.

Notify the authorities immediately: As soon as any loss or damage occurs to the insured property, give an immediate report to appropriate legal authorities. For example, report to the local fire brigade authority and the police if there is damage by fire/ explosion / implosion or lightning. In case of subsidence/ landslide/ rockslide, inform the district administration. In the event of impact damage of any kind or riot strikes, malicious acts, and acts of terrorism, inform the police.

Submit the claim to the insurer: Submit your claim to the insurer at the earliest and well within the stipulated period. With Tata AIG, you can submit the claim online through a quick digital process.

Establish loss: Support your claim for the insured property with plans, specification books, vouchers, and invoices pertaining to costs incurred by You for reconstruction/ replacement/ repairs. Cooperate with the insurer’s surveyors or representatives when they visit to inspect the insured property. Provide any additional information that the insurer requires for verifying Your claim.

Avoid fraudulent claims: Avoid making a claim which is false or fraudulent or where there is misrepresentation or non-disclosure of material facts, as it may lead to the cancellation of the policy and legal actions against you.

To initiate a claim against your fire insurance policy with Tata AIG, click here.

Types of Personal Properties Covered in Fire Insurance

Individual apartment: If you live in an independent flat that is part of a standalone building or a housing society, you can secure your apartment with fire insurance. If you are a homeowner, you can insure the property along with your valuables, and if you have rented the apartment, you have the freedom to insure only your valuables in the apartment.

Independent building: If you own multiple apartments in a single building or housing society, you can secure all of them under a fire insurance policy. Additionally, if you, your children, parents, and other family members or relatives have purchased or rented multiple apartments in the same building or housing society, you can secure all of them with fire insurance.

Independent villa: if you prefer a row house over an apartment, you have several options to choose from, like a small house, a bungalow, a duplex house, or a villa. You can insure your dream home with fire insurance, irrespective of its size.

Types of Business Properties Covered in Fire Insurance

Grocery stores, general merchant shops, and stationery shops: Grocery and general stores and stationery shops have several items like cooking oils, books, matchboxes, etc., which can easily catch fire. No matter the size of your business, you can secure your neighbourhood Kirana shop, a busy supermarket or general store, or a stationery shop with a fire insurance plan.

Electronic and automobile shops: If you own an electronic store where you sell expensive appliances, gadgets, and mobile phones or an automobile or automobile accessory shop, you can buy fire insurance to protect it.

Offices and educational workspaces: If you run a coworking office space or have a personal office set-up, you can secure it with fire insurance. Educational institutions such as schools, coaching centres, and degree colleges can also be secured under a fire insurance plan.

Home, lifestyle, and fitness stores: Outlets that sell home furniture and furnishing items, gyms, spas, salons, etc., can be insured with a fire insurance policy.

Repairs and workshops: Motor garages, carpenter workshops, plumber workshops, and such other repair service providers can insure their working space with fire insurance.

Cafes and restaurants: Whether you own a fancy cafe, a French bakery, a multi-cuisine fine- dine restaurant, or a chain of food joints, you can secure it with fire insurance.

Healthcare centres: Healthcare centres like hospitals, medical stores, physiotherapy centres, diagnostic centres, or natural treatment institutions can all be covered under fire insurance.

Others: Apart from the services mentioned above, several other services and businesses can be covered under fire insurance, like boutiques, antique shops, bookstores, call centres, etc.

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

Related Articles

1. How long does fire insurance protect me?

1. How long does fire insurance protect me?


The fire insurance policy keeps you insured for a duration of one year. You can renew your policy through a quick online process.

Do I need fire insurance if I have a comprehensive insurance policy?


If you have a comprehensive insurance policy for your property, you need not buy an additional fire insurance policy because damages caused by fire are covered under a comprehensive plan.

3. How will my insurance claim be cross-checked?


You will have to submit documented proof to your insurer, like photographs, videos, and invoices to support your fire insurance claim. Additionally, the insurer will send a surveyor or inspector to inspect the extent of damages to the insured property. On satisfactory completion of both these aspects, the insurer will process your fire insurance claim.

4. What are the risks covered under a fire insurance policy?


A fire insurance policy covers several risks, such as damages due to fire caused by fermentation, natural heating or spontaneous combustion, bush fire, forest fire, jungle fire, explosion, implosion, earthquakes, cyclones, landslides, and rockslides. It also provides coverage against mad-made perils, like riots, bursting of water tanks and pipes, missile testing operations, etc.

5. What is impact damage?


Impact damage is the partial or total damage or destruction caused to the insured property on coming in direct contact with a vehicle or animal. For example, if a truck hits an insured property and damages its door or wall, the repair costs for such damage are covered under the impact damage clause. This clause may vary for different property insurance policies.

6. What do you mean by reinstatement value?


Reinstatement value is a term commonly used in property insurance. It means the estimated cost of restoring your insured property back to its original condition. The estimated cost is not dependent on the insured property’s market value.

7. How can I increase my fire insurance coverage?


To increase the coverage scope of a fire insurance policy, you can support the basic plan with insurance riders. These riders or policy add-ons provide extended coverage to your property for an additional premium. With Tata AIG, you can add several add-ons to fire insurance, like floater cover, cover for stocks, accidental damage cover, rent insurance, etc.

8. What does insurance pay if your house burns down?


Although the coverage scope differs for different fire insurance policies, most of them cover the cost of repair or replacement of your damaged house and its insured valuables if your house burns down.

9. Can I insure my house for more than it is worth?


Yes, you can insure your house for more than it is worth. If your house is an old property and does not have a high value in the real estate market, it is advisable to insure it according to its reinstatement value rather than its market value. It is because even if the house has a lower resale value, the cost of rebuilding it may be high in case of damage due to fire.

10. Can I cancel my fire insurance policy and get back the premium?


Yes, you can cancel your fire insurance policy by giving a written notice to your insurer. With Tata AIG, we will cancel your fire insurance policy on receiving your written notice and refund the policy premium according to the schedule mentioned below:

Period (Not Exceeding)  Premium Refund
15 days  90% of the Annual rate
1 month  85% of the Annual rate
2 months  70% of the Annual rate
3 months  60% of the Annual rate
4 months  50% of the Annual rate
5 months  40% of the Annual rate
6 months  30% of the Annual rate
7 months  25% of the Annual rate
8 months  20% of the Annual rate
9 months  15% of the Annual rate
Exceeding 9 Months  No Refund

11. What commercial enterprises can opt for the fire insurance policy?


Several commercial enterprises can secure their business with a fire insurance policy. These include: Restaurants, cafes, hotels, food joints Grocery stores, supermarkets, stationery shops Repair shops Electronics and automobile stores Hospitals, medical stores, diagnostic centres, wellness centres Gyms, spas, salons, home decor stores Boutiques, apparel stores Educational institutions Several other categories of businesses with business operations of varied sizes like godowns, warehouses, manufacturing units, etc.

12. How much does the fire insurance policy cost, and how is the premium calculated?


The cost of a fire insurance policy includes the cost of the policy premium and the additional premium you must pay for policy add-ons. A fire insurance policy premium depends basically on the total value of the insured building and assets. The property’s market value and the cost of purchase of the insured valuables are considered when determining a fire insurance policy premium.

13. Can I make changes to the fire insurance policy during the policy tenure?


Yes, you can make changes to your fire and burglary insurance policy. However, you must make a written application to the insurer, and the policy changes will be applicable only when the insurer receives and approves the changes and receives the additional premium where applicable.