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Commercial Property (Fire Industrial)

What is Commercial Property (Fire Industrial) Insurance?

This is a type of insurance that covers the insured’s property against loss or damage caused by fire and allied perils.

Why do you need Commercial Property (Fire Industrial) Insurance?

This policy protects valuable assets such as your property and can be extended to include stock, fixtures and fittings, as well as machinery.

What are the main events covered under a standard Commercial Property (Fire Industrial)?

A standard fire insurance policy covers three perils, namely fire, Lightning and Limited explosion.

  1. Fire; there must be three conditions which must be fulfilled in order to constitute a fire in its real Sense.
    • There must be combination of Heat, Light, Flames & smoke (Actual Ignition)
    • There must be something on fire that ought not to be on fire
    • The fire must be accidental or fortuitous in its origin.
  2. Lightning; this is covered whether a fire occurs or not. All that is required of the Insured after a loss is to prove that lightning caused the loss.
  3. Standard explosion; this covers loss or damage to the property insured directly caused by explosion but excluding loss or damage to Boilers, Economizers or other Vessels.

The standard fire policy may be extended to cover other perils at an additional premium. The perils may be classified as Social, Chemical, Natural & Miscellaneous perils.

  1. Social Perils; these are perils causes by human activities
    • Riot, Strikes
    • Malicious Damage
  2. Chemical Perils; these perils include explosion and spontaneous fermentation or heating. These are losses resulting from chemical reactions.
  3. Natural Perils; these are perils originating from nature and are usually beyond Human Control.
    • Storm & Flood
    • Earth Quakes
    • Subterranean Fire
    • Subsidence
  4. Miscellaneous Perils; for example
    • Escape of water from tanks, apparatus or pipes
    • Air crafts, covers losses caused by aerial devices or articles dropping there from.
    • Impact, losses caused by vehicles and animals not belonging to or under the control of the insured.

The conditions associated with the fire insurance policy are divided into two general and claims conditions;

General Conditions:

  • Continuous duty of disclosure - insured is under an obligation to disclose all material facts not only at inception.
  • Alternations - insurer must be informed of any alternations to the risk
  • Warranties - this is an undertaking by the insured that something shall or some condition shall be fulfilled.
  • Reasonable precaution - the insured has to take the responsibility to do whatever is within means to put out the fire.

 

What are the additional benefits under a Commercial Property (Fire Industrial)?

  • Policy may be extended to cover loss of Rent caused by Insured Perils at an additional premium, provided the same specified at the inception of cover.
  • The policy will extend to cover the costs of demolition of the Buildings and Machinery and removal of debris from the site following destruction or damage to the property insured by fire or any other insured Peril.
  • The policy can be always maintained at full Sum Insured in the event of loss at additional premium agreed on the amount of loss.
  • The policy will extend to cover the additional costs of reinstating the destroyed or damaged property by reason of necessity to comply with Regulations framed in requirement by the local authority or Bye – Laws.
  • The Policy may extend to cover temporary removal of Property Insured (other than Stock in Trade or merchandise) for cleaning, renovating, repair or other similar purposes to any premises and not in the insured’s occupation or in Transit.
  • The policy may extend to cover loss or damage to the goods held by the insured in trust or on commission for which the Insured is responsible.

 

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