Standard Fire & Special Perils Insurance

A standard fire and special perils policy is a type of fire insurance policy that covers physical loss, damage, or destruction of your business property caused by fire and specified allied perils. These perils include natural disasters, man-made risks, and impact damage.

It provides coverage for:

• Buildings, plant and machinery, furniture, fixtures and fittings, and any other contents.

• Stocks, including raw material, stock in process, and finished goods.

• Bullion, unset precious stones, curios, works of art, and obsolete machinery.

The fire & special perils insurance may also cover additions or alterations to buildings, plant or machinery, temporary removal of stocks, removal of debris, start-up expenses, and other related costs.

Explore TATA AIG’s Standard Fire and Special Perils Policy for extensive coverage across various industries and reliable financial protection for your business.

Financial Safeguard against Major Losses

When business establishments are damaged, it can lead to significant financial losses. This is especially true when high-value assets and inventory are involved. With an SFSP policy, you can cover such losses and reduce out-of-pocket expenses related to repair or replacement.

Ensured Business Continuity after Disruptions

Damage to business property, particularly assets critical to operations, can disrupt day-to-day business activities and impact profitability. A standard fire and special insurance perils policy helps cover such losses and supports resuming your business activities at the earliest.

Supports Effective Risk Management and Planning

Taking timely measures to restore your business and prevent further damage is key to effective risk management and strategic planning. An SFSP policy provides the necessary financial support to implement recovery and risk mitigation measures efficiently.

Fire and Allied Perils Laghu Udyam Suraksha

It is a fire and special perils insurance policy issued to businesses whose total value of insured properties and assets at a single location is more than ₹5 lakhs but does not exceed ₹50 lakhs at the start of the policy.

Fire and Allied Perils Sookshma Udyam Suraksha

It is a fire and special perils policy issued to businesses whose total value of insured properties and assets at a single location does not exceed ₹50 crores at the start of the policy.

The Standard Fire Insurance policy covers a wide range of risks, commonly referred to as the 12 perils. Understanding these perils covered under standard fire policy will help you identify the types of risks that can cause physical loss, damage, or destruction to your property.

• Fire: An accidental fire that spreads and causes destruction to property.

• Lightning: Damage caused when lightning strikes the business property, leading to physical loss or damage.

• Explosion or Implosion: Damage incurred due to sudden bursting or inward collapsing of a structure, often due to high pressure.

• Aircraft Damage: Damage caused when an aircraft or parts of an aircraft hit the business property.

• Man-made Calamities: Destruction resulting from human actions such as riots, strikes, or intentional acts.

• Natural Disasters: Physical loss or damage to business property due to natural events, such as earthquakes, storms, floods, and cyclones.

• Impact Damage: Physical loss or damage caused by external objects such as vehicles or falling objects.

• Subsidence and Landslides, including Rockslides: Damage caused by the movement of underlying ground or around the business property.

• Bursting or Overflowing of Water Tanks, Apparatus, and Pipes: Damage caused when water tanks, apparatus, or pipes suddenly burst or overflow within the premises.

• Missile Testing Operations: Damage resulting from missile testing activities carried out by authorised authorities.

• Leakage of Automatic Sprinkler Installations: Accidental leakage of water from sprinkler systems causes significant damage.

• Bush Fire: A fire that breaks out in open areas such as farm fields or forests and spreads to business property, leading to substantial damage.

• Fire: Covers loss or damage caused by fire, including combustion, natural heating, or its own fermentation. It also includes bush fire, forest fire, and jungle fire.

• Explosion or Implosion: Covers physical loss or damage caused by explosion or implosion.

• Impact Damage: Covers impact or collision damage of any kind caused by external physical objects like vehicles, falling trees, aircraft, etc.

• Lightning: Covers physical loss or damage caused by lightning.

• Landslides and Rockslides: Covers losses incurred due to landslides, rockslides, or subsidence of land on which your business premises are located.

• Natural Disasters: Covers loss or damage caused by natural disasters, such as earthquakes, volcanic eruptions, storms, cyclones, etc.

• Man-made Risks: Covers physical loss or damage, or destruction caused by man-made risks, such as riots, strikes, and other malicious damage.

• Missile Testing Operations: Covers physical loss or damage caused to the business property due to missile testing operations organised by authorised officials.

• Leakage of Automatic Sprinkler Installations: Covers damage caused by leakage of automatic sprinkler systems.

• Bursting or Overflowing of Water Tanks, Apparatus, and Pipes: Covers damage caused by the sudden inflow of water due to the overflowing of water tanks and pipes.

• Theft: Covers loss due to theft that happened within 7 days from the occurrence of any of the insured events mentioned under inclusions.

Further Inclusions

In addition to the insured events, the fire and special perils insurance covers the following additional expenses.

• Additions, Alterations, or Extensions: Covers newly added, altered, or extended business property, including buildings, plant and machinery acquired after the policy start date.

• Temporary Removal of Stocks: Covers stocks temporarily moved to another location for processing, fabrication, or similar purposes.

• Cover for Specific Contents: Covers specific contents such as money, important documents and records, computer data and programmes, and belongings of employees, directors, and visitors at your business premises.

• Start-up Expenses: Covers reasonable start-up expenses incurred to resume business operations after a loss or damage covered under the policy.

• Professional Fees: Covers reasonable fees for architects and consulting engineers involved in repairing or rebuilding the business property after a loss.

• Costs for Removal of Debris: Covers reasonable costs for removing debris and related expenses after a covered loss.

• Costs compelled by Municipal Regulations: Covers additional costs incurred to repair or reconstruct the insured property to comply with municipal or government regulations after a covered loss.

Please note: The inclusions may be subject to certain specific policy terms and conditions. Please refer to your policy document for complete details.

Excess as specified in the Policy: For every claim, 5% of the claim amount will be deducted, with a minimum deduction of ₹10,000. This amount will be borne by you.

Deliberate or wilful damage: Loss or damage to property caused by deliberate, wilful, or intentional acts is not covered under the SFSP policy.

Items in Cold Storage Premises: Loss, destruction, or damage to the stocks stored in cold storage premises caused by a change in temperature is not covered, unless included as an add-on.

Pollution or Contamination: Loss or damage due to pollution or contamination is not covered unless it is a result of a covered risk.

Bullion or Unset Precious Stones: Loss, destruction, or damage to bullion or unset precious stones, any curios or works of art, is not covered unless it is declared separately and stated in the policy.

Property Covered by Marine Insurance: Loss or damage to a property covered under a marine insurance policy, except in excess of the limits of that policy.

Electrical Equipment: Loss, destruction, or damage to electrical equipment by over-running, excessive pressure, short circuiting, arcing, self-heating, or leakage of electricity is not covered. This exclusion is subject to certain policy conditions.

Spoilage: Loss, or damage by spoilage resulting from the retardation, or interruption or cessation of any process or operation caused by the operation of any of the perils covered.

Terrorism: Physical loss or damage to business property due to acts of terrorism is not covered, unless the coverage is opted for under an add-on under the SFSP policy.

War and Nuclear Risks: Loss, destruction, or damage caused by war, invasion, acts of foreign enemies, civil war, or due to ionising radiation, nuclear fuel, or nuclear waste is not covered under the policy.

Certain Cases of Fire: Loss or damage caused by fire is not covered if it is due to heating or drying process or burning of the insured property by order of any Public Authority.

Certain Cases of Explosion or Implosion: Physical loss or damage due to explosion or implosion is not covered if it is caused to boilers, economizers or other vessels, or by centrifugal forces.

Certain Cases of Impact Damage: Impact or collision damages caused by pressure waves from aircraft or due to vehicles or animals owned by the business or its employees are not covered.

Certain Cases of Landslides or Rock Slides: Loss or damage caused by normal cracking, settlement or movement of made-up ground, or coastal or river erosion is not covered.

Certain Cases of Man-made Damages: Loss or damage resulting from suspension of work, government or legal authority actions, or illegal occupation of a building is not covered.

Certain Cases of Leakage of Automatic Sprinkler Installations: Loss or damage caused by leakage of automatic sprinkler installations due to building repairs or alterations known to you are not covered.

Please note: These are some of the key exclusions. Please refer to your policy wording for complete details and specific terms and conditions.

Waiver of Underinsurance: Ensures claim payouts are not reduced due to underinsurance, considering the sum insured and the actual value of the insured property.

Declaration Policy for Stocks: Covers fluctuating stock values by letting you declare and update stock levels periodically with premium adjustments.

Omission to Insure Additions, Alterations, or Extensions: Covers newly constructed or acquired buildings, plant, machinery, and other contents that were unintentionally omitted from insurance.

Escalation Clause: Increases the sum insured under the SFSP policy to account for the increasing asset values during the policy period.

Accidental Damage Cover: Covers accidental loss or damage due to sudden, external, visible, and violent events.

Involuntary Betterment: Covers the cost of replacing the damaged property with a similar property when identical replacements are not available. And this replacement will not be considered as a betterment.

Rent Insurance: Covers additional rent for alternate premises or loss of rental income when the property becomes unfit for occupation due to a loss or damage.

Protection and Preservation of Property: Covers costs incurred to temporarily protect or preserve insured property from further damage after a loss or damage.

Contract Works: Covers permanent and temporary works, including materials under construction during the contract period.

Deterioration of Stocks in Cold Storage Premises: Covers loss or damage to insured property caused by changes in temperature due to accidental power failure or damage to cold storage machinery.

New Location Cover: Automatically covers property at a newly acquired location for a limited period, until it is declared and added to the SFSP policy.

Brands and Trademarks: Covers loss or damage to branded finished goods and allows safe destruction, removal, or re-labeling to protect the brand from misuse.

Electrical Injury: Covers damage to electrical appliances and installations caused by electrical faults like short circuits, arcing, or lightning.

Fuel Contamination During Decantation: Covers loss due to contamination caused by water or alternate fuel in the underground fuel tank during the decantation process. This applies to petrol and diesel pump stations only.

Wrong Fuelling of Vehicles: Covers the insured’s liability for losses to customers’ vehicles caused by incorrect fuelling by employees at petrol or diesel pump premises.

Sabotage and Terrorism Damage Cover Endorsement: Covers damage to insured property caused by acts of sabotage or terrorism.

Please note: The optional add-ons are subject to specific terms and conditions. Kindly refer to your policy wording for complete details.

The sum insured is determined based on the type of property insured. The basis of calculation is as follows:

Every business needs financial protection against unforeseen risks that can damage assets and result in significant financial losses. Here are certain commercial and service business segments that may consider buying the SFSP policy.

Business Owners: Businesses with high-value assets such as buildings, plant and machinery, furniture, and other contents need an SFSP policy to protect themselves from major financial losses due to fire and other specified risks.

Property Owners: Owners of commercial properties need an SFSP policy to secure their high-value structures against physical loss or damage.

Educational, Financial, and Healthcare Institutions: These institutions rely on their critical assets, such as their infrastructure, equipment, and other contents, for their day-to-day operation. An SFSP policy is needed to secure these assets.

Factory Owners: Manufacturing units rely heavily on machinery for continuous production. Standard fire and special perils insurance policy helps in repairing or replacing these assets in case of an unexpected loss.

Warehouse Operators: Warehouses store large volumes of goods and materials. An SFSP policy offers financial protection against risks that could damage this stock.

Shop Owners: Retail business owners rely heavily on ready-to-sell goods. An SFSP policy is essential to ensure financial security against damages to these goods that can result in heavy losses.

• Policy document

• Details of the damage or loss incurred caused by the insured event - brief statement of the loss.

• Police reports, such as FIR or any other report, if applicable.

• Other reports that were submitted to the relevant authorities related to the incident.

• Details of any other insurance policy covering the insured property.

• Vouchers and invoices pertaining to costs incurred for the repairs or reconstruction.

• Photographs supporting the physical loss or damage due to the insured event.

Please note: The documents required may vary depending on the nature of the incident and individual circumstances.

The claim process for the standard fire and special perils policy is straightforward. You can follow these simple steps to ensure a smooth claim experience. It is important to cooperate with our representative or surveyor during the inspection of the damaged property.

Step 1 - Notify the Damage Immediately

Inform TATA AIG about the incident and the details of the loss or damage at the earliest. The incident should be reported immediately and no later than 7 days from the date of occurrence.

Step 2 - Take Necessary Steps to Prevent Further Loss or Damage

Until the surveyor completes the inspection, do not sell or dispose of the damaged items, wash or clean any damaged item or debris, carry out repairs, or lodge a claim against a third party responsible for the loss or damage.

Step 3 - Notify Authorities Immediately

Inform the relevant authorities depending on the nature of the incident. For instance, inform the Police in case of an explosion, riots, strikes, or theft; the District Administrator in case of a landslide; and the Fire Brigade in case of a fire accident.

**Step 4 - Submit the Claim

Submit the duly filled claim form along with the relevant supporting documents within 30 days from the date of loss or damage. Ensure that all details are stated clearly and accurately.

Step 5 - Claim Settlement Process

We will assess the loss and process your claim under the standard fire & special perils policy. Upon approval, we will proceed with the necessary legal proceedings and settle the applicable claim amount.

TATA AIG offers a Standard Fire and Special Perils Insurance policy designed to protect your business assets, with personalised benefits and reliable support for a smooth claim experience.

Here is why you can consider TATA AIG for the SFSP policy:

Brand Trust

Benefit from a trusted brand backed by over 25 years of expertise in the insurance industry.

Flexibility

Customise your SFSP policy with a wide range of add-on options for enhanced and personalised protection specific to your business needs.

Dedicated Customer Support

Reach our customer service team for product and service-related assistance at any time on our 24/7 customer support number 022-6489-8282.

Digital Processes

Access TATA AIG products and services with ease through our user-friendly digital platforms, including the TATA AIG app.

Seamless Claim Experience

Enjoy a smooth claim experience supported by a streamlined process and dedicated assistance.

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