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:
    1. The Policy number is quoted on the Loss advice.
    2. The date and time of loss is specified
    3. A brief summary of the loss incidence and the materials that are lost or damaged is specified
    4. The location of the premises where the loss has taken place is provided
    5. 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 :

  1. Claim intimation letter
  2. 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.


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