Fire Insurance

• Policy Purchase: Choose a fire insurance policy that offers the coverage, benefits, and add-ons to protect your business property.

• Premium Payment: Pay the applicable premium for your chosen fire insurance policy coverage.

• Coverage Activation: Once the policy is in force, business property is protected against various fire risks.

• Claim Filing: In case of unexpected events causing loss, damage, or destruction to your insured property, you can file a claim.

• Claim Settlement Process: The claim and supporting documents are reviewed, and the claim amount is paid as per the policy terms.

• High Incidence of Fire Accidents: According to Accidental Deaths and Suicides in India (ADSI)
  data published by the National Crime Record Bureau(NCRB), although the number of fire accidents has decreased, it remains significantly high. India recorded 7,566 fire accidents in 2022 and 7,054 accidents in 2023.

• Heavy Financial Losses: A fire breakout can lead to severe financial losses for businesses. For instance, a massive fire at a cotton ginning mill in Adoni, Andhra Pradesh, destroyed around ₹10 crore worth of cotton stocks and raw materials.

• Comprehensive Protection Against Fire & Allied Perils: Fire & burglary insurance doesn’t just protect against damage caused by fire. It offers all-around protection against damage caused by lightning, explosions, natural calamities, riots and theft.

• Prevents Business Interruption and Loss of Income: Fires can cause temporary shutdowns and disrupt business operations, resulting in even greater loss. With fire damage insurance, you can recover from these losses and resume operations sooner.

Also Read: Functions of Fire Insurance

Every business investing in properties and assets should consider buying a fire insurance policy. Below are a few business sectors and the possible losses they may suffer.

A fire insurance policy helps in recovering from these losses.

• Small and Medium Scale Enterprises

Small and medium-scale enterprises, such as grocery stores and salons, invest heavily on high-value equipment, machinery, furniture, etc. Fire damage to these assets can result in significant losses.

• Businesses that own Factories

Factories operate on large premises and depend on high-value plant, machinery, and equipment. Fire perils can damage production lines, raw materials, and finished goods. This leads to heavy losses and operational disruptions.

• Businesses that own Office Spaces

Corporate companies invest in building infrastructure and furniture. Fire accidents can damage workspaces. This can affect daily operations and continuity.

• Retail Outlets

Retail outlets stock finished goods across multiple price ranges. Damage to such inventory due to fire can result in immediate loss of revenue.

• Businesses that own Warehouses

Warehouses store large volumes of goods. When these include inflammable or combustible materials, fire can quickly spread and cause extensive inventory losses.

• Hospitals

Hospitals invest in high-value equipment, life-support systems and diagnostic devices. Fire incidents can damage these critical assets and installations, leading to major financial losses and disruption of medical services.

• Restaurants

Restaurants operate with cooking ranges, gas pipelines, and exhaust systems. Fire incidents can damage kitchen equipment, stored finished goods, and dining infrastructure. This can result in significant repair and replacement costs.

Also Read: What are the Characteristics of a Fire Insurance Policy?

Fire insurance offers a broader scope of coverage for different types of business properties against a wide range of risks.

Here is a quick overview of some of the common risks and damage, and the fire insurance policy coverage:

TATA AIG offers two fire insurance plans to cover business properties of different sizes and risk profiles. These policies provide protection against fire and other special perils, including natural and man-made disasters.

You can also enhance protection with a wide range of add-ons to address specific risks that may impact your business operations. While the risks covered and exclusions remain similar, the two plans differ mainly in sum insured.

Here, we have highlighted a few features that are better suited to different business sizes:

• Suitable for All Businesses: Protect warehouses, machinery, commercial buildings, and more with TATA AIG’s fire insurance plans designed for both SMEs and large-scale businesses.

• Comprehensive Coverage: Extensive coverage against a broad range of risks, including fire, lightning, spontaneous combustion, explosions, riots, strikes, and natural disasters.

• Quick Claim Settlements: A streamlined and transparent process for quick and efficient claim settlements.

• Property Protection: Coverage for buildings, plant, and machinery, furniture, stocks, and other insured business assets.

• Flexibility: Enhance protection by choosing from over 15 optional add-ons to cover specific risks that affect your business.

• Quick Digital Services: Enjoy instant policy issuance and a hassle-free claims process with TATA AIG’s online platform and mobile app.

• 5+ In-Built Covers: Includes coverage for consulting engineers, architects, and surveyors' fees, debris removal, temporary stock removal, and more.

• 24/7 Customer Support: Round-the-clock assistance at 022-6489-8282 for product-related queries and claims support.

At TATA AIG, the fire insurance coverage is bundled with burglary insurance to provide wider coverage against fire and other specified perils.

The key inclusions under the fire insurance policy coverage for the insured property, equipment, and stock include:

Property Damage

• Fire, bush fire, forest fire, and jungle fire cause damage to buildings.

• Explosion or implosion leading to structural damage.

• Lightning that may result in cracking of walls and fire outbreaks.

Damage or Loss to Equipment, Plant or Machinery

• Fire, explosion, or implosion damaging equipment, plant, and machinery.

• Sudden inflow of water caused by bursting or overflowing of water tanks, apparatus, and pipes, damaging machinery and other insured property.

• Impact damage from objects like walls, falling trees, vehicles, animals, or aircraft can lead to damage to equipment.

• Leakage from automatic sprinkler installations that damage machinery and other insured property.

Loss or Damage to Stock

• Theft leading to loss of stock, including raw materials and finished goods.

• Leakage from automatic sprinkler installations that damage stock

• Sudden inflow of water caused by bursting or overflowing of water tanks, apparatus, and pipes, damaging raw materials and finished products.

Loss, Damage, or Destruction due to Special Perils

• Riots, strikes, or other malicious activities resulting in damage to insured buildings, equipment, and contents.

• Sudden sinking of land, rockslides and landslides cause damage to the foundation and structural instability.

• Missile testing operations that cause loss, damage, or destruction to insured property.

• Natural calamities, including earthquakes, storms, floods, volcanic eruptions, cyclones, typhoons, tempests, hurricanes, tsunamis, and tornadoes, cause widespread damage to insured assets.

Theft and Disappearance

• Loss due to theft. Any items outside your building or anything attached to the outside of the outer walls or the roof of your building, unless securely mounted, will not be covered.

• If something is lost, misplaced, or disappears without a clear connection to an insured event, it won’t be covered under the fire policy cover.

Pollution

If your property is damaged due to pollution or contamination, it’s not covered, unless the pollution directly results from an insured event (like a fire) or causes an insured event.

High-value Items

Loss, destruction or damage to high-value items like bullion, precious and uncut stones, or artwork is not covered unless their value is declared and specifically mentioned in the fire insurance policy.

War, Terrorism, and Nuclear Perils

• Loss or destruction caused by war, invasion, foreign enemy attacks or war-like operations is not covered.

• Physical loss or destruction caused by an act of terrorism or sabotage, unless specifically covered through an optional add-on.

• Any damage caused by nuclear radiation, waste or materials, such as radioactive fuel or explosive nuclear components, is not covered.

Other Exclusions

• Deductibles are not covered and have to be paid by the policyholder.

• Fraudulent claims.

• Deliberate or wilful destruction.

• Costs for preparing any claim.

• Loss or damage of insured property caused by a halt in business operations.

• Consequential loss.

Disclaimer: These are some of the key inclusions and exclusions. Kindly refer to your policy document for the complete details.

Optional Add-On Covers

• Floater Cover: This add-on extends your coverage for physical loss or damage to goods stored at more than one location.

• Terrorism Cover: Covers physical loss or property damage due to terrorism at the insured property.

• Accidental Damage Cover: Covers accidental damage to the property by any external, visible and violent causes.

• Rent Insurance: Covers additional rent you may need to pay for shifting to another location when your insured property is damaged by fire or other covered perils.

• Declaration Policy for Stocks: Covers goods on payment of an advance premium based on your report of the value of goods.

• Omission to Insure, Additions, Alterations, or Extensions: Coverage for newly built or bought buildings and property for up to 5% of the total coverage amount.

• Escalation Clause: Covers the automatic regular increase in the sum insured throughout the policy duration for an additional premium payment in advance.

• Electrical Injury: Covers loss/damage to electrical appliances caused by overrunning, excessive pressure, short circuit, arcing, self-heating, or leakage of electricity.

• Contract Works: Covers permanent and temporary property being built as part of a project, along with materials and other items used in construction.

• Involuntary Betterment: Covers the cost of replacing damaged property with better replacements when the exact replacements are not available.

• Protection and Preservation of Property: Covers necessary costs to temporarily protect or preserve insured property from physical loss or damage.

• Brands and Trademarks: Covers loss or damage to goods with a brand or trademark caused by an insured peril. It allows for safe destruction and re-labelling to protect the brand.

• New Location Cover: Covers the property you own at a new location. The property will be automatically covered for up to 15 days from the date of acquisition.

• Deterioration of Stocks in Cold Storage Premises: Covers damage to your stocks caused by a change of temperature due to electricity failures.

• Fuel Contamination During Decantation: Covers loss due to fuel contamination in underground fuel tanks from water or other fuel mixing with your stored fuel.

• Wrong Fueling of Vehicles: Covers your legal responsibility to your customers from using the wrong fuel for vehicles by your employees at petrol or diesel pump stations.

In-Built Covers under Fire Insurance

• Additions, Alterations or Extensions: This cover offers a maximum of 15% of the sum insured for newly bought or built properties, such as buildings, plants or machinery.

• Temporary Removal of Stocks: This cover offers a maximum of 10% of the sum insured for goods that are temporarily moved for processing, fabrication or finishing.

• Specific Contents Coverage: This offers a fixed coverage for deeds or records, data recovery and personal effects of up to 20 individuals.

• Start-Up Expenses: Covers essential start-up expenses to restart business operations after a covered loss or damage.

• Professional Fees: This covers 5% of the claim amount for consultation fees for architects & surveyors when rebuilding insured property. It does not cover costs for preparing estimate reports or claim reports.

• Debris Removal Costs: This offers up to 2% of the claim amount for debris removal costs, dismantling, demolition, shoring or propping insured property or machinery.

• Costs Compelled by Municipal Regulations: This covers additional construction costs required by municipal, local, state or central laws.

• Visit the official TATA AIG website and click on the “Business” dropdown to buy fire insurance online.

• Select Fire & Burglary Insurance and browse through our available fire insurance plans.

• Select your business occupancy type from the dropdown menu. For example, if you own a marriage hall, select marriage hall from the menu.

• Next, enter your location pin code and phone number. Verify the details with an OTP to get an instant quote.

• Select your fire insurance policy, add-ons (if required), and provide additional details. Review the quote and complete the payment process.

• TATA AIG offers a secure platform to buy fire insurance online in India. You can also benefit from 24/7 customer support to clarify product-related concerns.

• Business owners across various industries, including retail outlets, manufacturing units, warehouses, restaurants, and hospitals, can buy fire insurance.

• You are an Indian citizen and above 18 years of age.

• The property you insured under fire insurance online is located in India.

• You are a legal owner, tenant, lessee, or occupier of the property.

• You have all the valid documents required.

• The insured property is not unoccupied for more than 30 days.

In June 2017, Chennai Silks faced severe damage due to a massive two-day fire. Major portions of the 7-storeyed building were damaged, resulting in a loss of ₹60 Crores for the shop owner.

Thankfully, the shop was insured for ₹250 Crores with a comprehensive fire insurance policy. The quick claim initiation and reports submitted to the insurance company and local law enforcement authorities helped the business recover quickly.

The insurance company’s surveyor calculated the losses based on fire brigade reports, FIR, stock registers, and through an in-person inspection of the damaged building. The shop was offered a settlement amount based on the report, which helped speed up the recovery after this incident.

(Source: Chennai Silks Building – Insurers to Assess Damage in a Week – Deccan Chronicle)

Fire insurance premium calculation is done after considering multiple factors that directly influence the price and coverage of your chosen plan.

Here are some factors considered when calculating fire insurance premiums:

• Property Value: The replacement cost of the property directly affects the premium amount. The higher the replacement value, the higher the premium price.

• Risk Profile: Premiums for high-risk properties, such as warehouses or workshops, are higher, whereas those for low-risk properties, such as shops or offices, are lower.

• Location Risk: Properties in fire-prone zones, such as Madhya Pradesh and Gujarat or disaster-prone zones, incur higher premiums than those in safer areas.

• Coverage Amount: The sum insured you select is a key factor that determines the premium. Opting for a higher coverage increases the premium.

• Safety Measures: Fire alarms, sprinklers, and other safety installations can reduce premiums, as they reduce the risk of damage and total destruction of the property.

• Add-Ons Opted: Additional covers, such as debris removal or rent loss, enhance the coverage but increase the premium rates of the base policy.

TATA AIG’s online fire insurance premium calculator simplifies the process, helping you estimate your premium accurately based on these factors.

• Claim Intimation: Inform TATA AIG 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.

• Report to Authorities: File reports with the fire brigade, police or other relevant authorities, depending on the nature of the incident.

• Documentation and Submission: Complete the fire insurance claim form and submit it with necessary documents like proof of loss and authority reports within 30 days.

• Survey and Assessment: Cooperate with TATA AIG’s surveyor to assess the damage to your property. Submit any additional documents required.

• Claim Settlement: Once we have verified your fire claim and documents, you will receive your claim payout amount.

*Please note that fire insurance claims over ₹1 lakh need to be filed manually as per Insurance Regulatory and Development Authority (IRDAI) guidelines.

Also Read: How Do You Treat Salvaged Goods In Fire Insurance Claims

Here is a list of some commonly required documents and certain other specific documents based on the type of claim:

• A completely filled-out fire insurance claim form.

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

• A copy of the fire brigade report/FIR

• Photographs of the extent of the damage

• Valuation-related documents

• KYC documents (ID and address proof)

For Property and Equipment Claims

• Repair/replacement estimates

• Repair bills with payment receipts

For Stock

• Purchase invoices

• Stock register or inventory records

• Reliable Brand: Experience reliable support with TATA AIG, backed by over 25 years of expertise in the insurance industry.

• Coverage across Multiple Industries: Get financial protection against fire-related loss or damage across a wide range of industries, including restaurants, hospitals, engineering workshops, and more.

• Extensive Coverage: Benefit from comprehensive coverage for business property valued up to ₹50 crores.

• Customisable Plans: Choose the required sum insured and choose from various optional covers to customise the fire insurance policy to your specific business needs.

• Efficient Claim Settlements: Benefit from a streamlined claim settlement process with defined timelines for timely support.