Fire
Man's fascination with fire
perhaps signified his first steps to development. What started as a
necessity for the purpose of keeping warm - the sitting around a fire
- seemed to have played a significant role in the development of
social groups and family units. In due course man found more and more
uses for fire -for lighting, for cooking, for making tools and weapons
..... If the productive use of fire took man in the path of development,
controlling it proved to be one of his challenges. It continues to be
so. Fire is one of the major sources of losses - particularly in terms
of property damages - all over the world.
Fire Insurance
Fire insurance which has its origins in the late 17th century
is now one of the most sought after insurance. The scope of cover has also
been widened to include a host of perils which include :
· Lightning
· Riots & Strikes
· Malicious Damage
· Aircraft Damage
· Impact Damage (by vehicles & animals)
· Storm, Typhoon, Tempest & the
like
· Floods including overflow
of accumulated rain water following very heavy rains
· Earth-quake
· Bursting of Water tanks & other
apparatus
· Burglary involving the use
of force for entry into or exit from the insured premises
Policies are tailored by selection
from or addition to
the above list depending upon the nature of the risk and the type of
insurance protection required by a client.
Principal Exclusions
The Fire insurance policy would have
certain specific exclusions including
- War & related perils
- Nuclear perils
- Sabotage & Terrorism
- Fire due to own fermentation / spontaneous
combustion
- Pollution & Contamination (unless
caused by an insured peril)
Who Can avail Fire Insurance
Any person or firm that has a financial interest in the
property to be insured can avail this insurance. This means that owners of
property, firms that holds property in trust or on commission and
Financial Institutions which have a financial interest in a property can
avail this insurance.
What can be insured
- Buildings
- Plant & Machinery (including accessories
& spares)
- Fittings , Furniture , Fixtures, Office
Equipment & Office contents
- Stock-in-trade ( or Stock-of-raw materials
/ Stocks-in-process and Stock of Finished Products in case of a
manufacturing firm) etc.
- Loss of rent Payable / Receivable (if
a separate Consequential Loss Insurance is not being availed)
can be insured under a Fire Insurance policy.
- Liability to Landlord for loss or
damage to the premises caused by an insured peril can also be
included under the policy.
It is to be noted that the description
of the interests that are to be insured need to be clearly
declared for insurance. To cite a few examples if Sign Boards,
Money, Stock of Phone cards, Bullion, Unset precious stones & Other
Valuables, Works of Art, Manuscripts, Plans & Designs etc. need
to be specifically declared for insurance.,
How to obtain the Insurance
A proposal form properly completed
would assist the under-writer to understand the risk and provide terms.
It is possible that a visit to your premises would be required to get a
better idea about the risk in which case the under-writer would contact
you for a time convenient for his visit.
While completing the proposal form
please take care to complete the form clearly. The purpose of the proposal
form is to enable the under-writer get a clear idea about the risk and
hence all necessary information should be provided. If there is any
information known to you that would make an impact on the acceptance of
the risk or it's terms then it should be provided even if the proposal
form does not contain any specific question relating to such information.
Material Information that should be disclosed
As already mentioned all information
that would have an impact on the acceptability of the risk and the terms
at which it would be accepted, need to be provided. These would include :
- Narration of how the premises is
occupied and what processes are carried on in the premises.
- If there is any hazardous / flammable
materials stored / used OR if there is any hazardous process carried
on in the premises it should be specified in the proposal form.
- Information on past losses (if any) . If
there had been no losses in the past then this information also should
be provided. It should be remembered that this information relates to
whether there had been any past losses and the information should
include loss experiences even if no insurance claim was lodged.
- Information about whether any Insurer had
refused to provide insurance for the risk or whether any Insurer had
placed any restriction at any time on the insurance for the risk
Fire Prevention / Fire Protection
It is essential that a property
owner take adequate precautions to protect himself from fire losses.
It is always to be remembered that even insurance can compensate only
for the material valueof the loss suffered. But the damages caused by a
fire can go far beyond material loss. The following would provide the
reader with a preliminary list of measures that can be taken to prevent
fire incidences or if one arises, to protect against a major loss.
In a Home :
- Carelessness is the major causes of fires
in residential premises and many a fire occurs because of carelessness
in the kitchen. So :
- do not forget to turn of the stove
/ oven once cooking is completed or if you are leaving home (even
if it is only for a few minutes)
- do not forget to turn off the
electrical appliances - particularly the cooking appliances -
which do not operate on self timer once use is over or if you are
leaving home
- do not overload electrical points
- Electrical short-circuiting is one of the
major causes of fire any where in the world. This can happen due
to overloading of electrical points or due to use of sub-standard
material . In this connection
- It is essential to ensure that the
plugs fit into their sockets snugly and are not loose and moving
within the sockets ( e.g. the use of a two pin plug in a
conventional three-pin socket )
- It is advisable not to use multi-pin
sockets as if they are not of good quality or if they are not
properly manufactured arcing can result which may lead to fire.
- Jointing of electrical wires
should be avoided as far as possible. If it cannot be avoided then
ensure that
- the jointing of the two wires (the Phase
and the Neutral leads) are jointed at different levels and not
adjacent to each other
- the joint should be properly taped with good
quality insulation tape and the joint should be checked from time
to time to ensure that the insulation tape is properly in place
(some times the tape would come loose because of humidity and
temperature drying of the glue )
- Cigarette smoking is not only injurious to
health but can also cause fires. Leaving burning cigarette / cigarette
butts (even in ashtrays) has lead to many a fires. So if one smokes
in a house it should be ensured that the cigarette is properly put
out. It is essential to check that the cigarette butts are put out before
cleaning the ash trays into waste bins.
- It is advisable to have a
Fire Extinguisher at home and the family embers should be familiar
about how to use it in case of an emergency.
- All family members should know emergency
procedures in the event of a fire.
In an Office
- Electrical short-circuiting is one of the
major causes of fire anywhere in the world. This can happen due to
overloading of electrical points or due to use of sub-standard material.
In this connection:
- It is essential to ensure that the plugs
fit into their sockets snugly and are not loose and moving within
the sockets
- It is advisable not to use multi-pin sockets
because if they are not of good quality or if they are not properly
manufactured arcing can result which may lead to fire
- Jointing of electrical wires should be avoided
as far as possible. If it cannot be avoided then ensure that
- the jointing of the two wires (the
positive and the negative leads) are jointed at different levels
and not parallel to each other
- the joint should be properly taped with
insulation tape and the joint should be checked from time to time to
ensure that the insulation tape is properly in place (some times
the tape would come loose because of humidity and temperature)
- Cigarette smoking is not only injurious to health
of the employees but can also cause fires. Leaving burning cigarette /
cigarette butts (even in ash trays) has lead to many a fires. So if one
smokes in an office it should be ensured that the cigarette is properly put out.
- It is essential to check that the cigarette butts are put out before
cleaning the ash trays into waste bins. The cleaning staff also
must be made aware of the need for this precaution
- Fire Extinguishers should be provided in adequate numbers at various
parts of the office fixed in very visible and easily accessible positions
and the staff members should be familiar about how to use them in case of
an emergency.
- It is also essential to have the Fire
Extinguishers maintained under
a maintenance contract with a Fire Consultant of good repute. It is to be
ensured that the Fire Extinguishers are serviced regularly and the date of
last service should be recorded on the extinguisher.
- It is
preferable to select office premises in buildings which are fitted with
Fire alarm systems as it would alert the neighbours of a Fire emergency,
if one arises , and external help can be summoned at short notice.
- All staff members should know the emergency
procedures in the event of a fire
In Factories and Warehouses
- Electrical
short-circuiting is one of the major causes of fire any where in the
world. This can happen due to overloading of electrical points or due to
use of sub-standard material . In this connection
- It is essential to ensure that the plugs
fit into their sockets snugly and are not loose and moving within
the sockets
- It is advisable not to use multi-pin sockets
because if they are not of good quality or if they are not properly
manufactured arcing can result which may lead to fire
- Jointing of electrical wires should be avoided
as far as possible. If it cannot be avoided then ensure that
- the jointing
of the two wires (the positive and the negative leads) are jointed at
different levels and not parallel to each other
- the joint
should be properly taped with insulation tape and the joint should be
checked from time to time to ensure that the insulation tape is properly
in place (some times the tape would come loose because of humidity and
temperature)
- Cigarette
smoking should NOT be allowed not only inside the premises but even
within the compound and any employee found violating the rule should be
strictly dealt with.
- Cooking should NOT be allowed within the premises
- It is necessary that the premises are
fitted with Fire alarm systems as it would alert the neighbours
of a Fire emergency , if one arises , and external help arrives at
short notice.
- The premises should have adequate Fire
hose reel with water supplied by a dedicated fire water supply system
which would include one electrical pump and a standby diesel pump.
It is advisable that the Fire water-pump room be fitted with a
Automatic Sprinkler type of fire extinguisher.
- Fire Extinguishers should be provided
in adequate numbers at various parts of the office fixed in very
visible and easily accessible positions and all the staff members
should be familiar about how to use them in case of an emergency.
It is necessary that the Fire extinguishers provided are appropriate
for the risk . The Fire consultant should be clearly told about how
the premises will be used and the type of operations that would be
carried on / materials that would be stored in the premises.
- It is essential to have the Fire Extinguishers
and other Fire Fighting systems ( Fire alarm system, Fire water
pump , hose reels , hydrant points, sprinklers etc.) maintained under a
maintenance contract with a Fire Consultant of good repute. It is to
be ensured that the systems are regularly inspected and defects
if any are rectified in time. Fire Extinguishers need to be serviced
regularly and the date of last service should be recorded on the
extinguisher.
- All staff members should know emergency
procedures in the event of a fire.
- Civil Defence Certificate of approval
should be obtained for the premises and should be valid at all times.
What to do in case of a Claim under the Fire Insurance Policy
- Naturally a claim under the policy
would depend upon whether
- the property lost or damaged is covered under
the policy AND
- the cause of such damage is covered under
the policy
- In case a loss or damage happens which is
caused by one or more of the insured perils then the Insurers need to be
informed immediately. While advising the claim please ensure the following:
- The
Policy number is quoted on the Loss advice.
- The date and time
of loss is specified
- A brief summary of
the loss incidence and the materials that are lost or damaged
is specified
- The location of the
premises where the loss has taken place is provided
- The phone number of
the contact person who can assist the Insurers or a Loss Adjustor
deputed by them to verify the
damages
- In the event of a claim
happening all efforts should be made to minimise loss. These may involve
segregating damaged materials from the rest of the property, obtaining
competetive quotes for any repairs / replacements that may be required etc.
If any Third Party is responsible for the loss then they should be held
specifically responsible for the loss / damage so that the rights of
recovery are protected.
- At the earliest possible ,
a detailed estimate of loss / damage need to be prepared and provided
to the Company / Loss Adjustor
-
If the loss / damage involves repairs / replacement of damaged property
the detailed estimate of loss / damage (mentioned above) should be
supported by at least three quotations for such repairs / replacement ,
obtained from out-side sources
Claims Documentation
Claim documentation would depend
upon the nature of property damaged and the cause of loss . The principal
documents would include the following :
- Claim intimation letter
- Loss Estimate (supported with
external quotes in case of repairs / replacement of damaged property)
In addition to the
above the following documents need to be provided depending upon the
cause of damage :
- Fire , Explosion: Police Report / Civil
Defence Report , Laboratory report (if applicable)
- Aircraft Damage / Impact Damage / Riot ,
Strike Malicious Damage / Burglary : Police Report
Claim Procedure
Once a claim intimation is received
by the Company the Company's officials or an independent Loss Adjustor
would be appointed to attend to the loss and adjust the claim. The Insured
need to provide the Company official or the Loss Adjustor with all required
documents & assistance to establish the cause and extent of loss / damage.
|