FIRE GENERAL CONDITIONS:

1. (Utmost Good Faith) THIS POLICY shall be voidable in the event of mis-representation, misdescription or non-disclosure of any material particular.

2. (Material Changes of the Property) All insurances under this policy shall cease on expiry of seven days from the date of fall or displacement of any building or part thereof or of the whole or any part of any range of buildings or of any structure of which such building forms part. PROVIDED such a fall or displacement is not caused by insured perils, loss or damage which is covered by this policy or would be covered if such building, range of buildings or structure were insured under this policy.
Notwithstanding the above, the Company subject to an express notice being given as soon as possible but not later than seven days of any such fall or displacement may agree to continue the insurance subject to revised rates, terms and conditions as may be decided by it and confirmed in writing to this effect.

3.(Material Changes of the Property) Under any of the following circumstances the insurance ceases to attach as regards the property affected unless the Insured, before the occurrence of any loss or damage, obtains the sanction of the Company signified by endorsement upon the policy by or on behalf of the Company :-
a) If the trade or manufacture carried on be altered, or if the nature of the occupation of or other
circumstances affecting the building insured or containing the insured property be changed in such a
way as to increase the risk of loss or damage by Insured Perils.
b) If the building insured or containing the insured property becomes unoccupied and so remains for a period of more than 30 days.
c) If the interest in the property passes from the insured otherwise than by will or operation of law.

4. (In case of Existence of Marine Policy) This insurance does not cover any loss or damage to property which, at the time of the happening of such loss or damage, is insured by or would, but for the existence of this policy, be insured by any marine policy or policies except in respect of any excess beyond the amount which would have been payable under the marine policy or policies had this insurance not been effected.

5. (Cancellation) This insurance may be terminated at any time at the request of the Insured, in which case
the Company will retain the premium at customary short period rate for the time the policy has been in
force. This insurance may also at any time be terminated at the option of the Company, on 15 days' notice
to that effect being given to the Insured, in which case the Company shall be liable to repay on demand a
rateable proportion (Pro rata) of the premium for the unexpired term from the date of the cancellation.

6. (Duties of Insured following a loss)
(i) On the happening of any loss or damage the Insured shall forthwith give notice thereof to the Company
and shall within 15 days after the loss or damage, or such further time as the Company may in writing allow
in that behalf, deliver to the Company
a) A claim in writing for the loss or damage containing as particular an account as may be reasonably
practicable of all the several articles or items or property damaged or destroyed, and of the amount of
the loss or damage thereto respectively, having regard to their value at the time of the loss or damage not including profit of any kind.
b) Particulars of all other insurances, if any
The Insured shall also at all times at his own expense produce, procure and give to the Company all such further particulars, plans, specification books, vouchers, invoices, duplicates or copies thereof, documents, investigation reports (internal/external), proofs and information with respect to the claim and the origin and cause of the loss and the circumstances under which the loss or damage occurred, and any matter touching the liability or the amount of the liability of the Company as may be reasonably required by or on behalf of the Company together with a declaration on oath or in other legal form of the truth of the claim and of any matters connected therewith.

No claim under this policy shall be payable unless the terms of this condition have been complied with
(ii) In no case whatsoever shall the Company be liable for any loss or damage after the expiry of 12 months from the happening of the loss or damage unless the claim is the subject of pending action or arbitration; it being expressly agreed and declared that if the Company shall disclaim liability for any claim hereunder and such claim shall not within 12 calendar months from the date of the disclaimer have been made the subject matter of a suit in a court of law then the claim shall for all purposes be deemed to have been abandoned and
shall not thereafter be recoverable hereunder.

7. (Rights of the Insurer following a loss) On the happening of loss or damage to any of the property
insured by this policy, the Company may
a) Enter and take and keep possession of the building or premises where the loss or damage has happened.
b) Take possession of or require to be delivered to it any property of the Insured in the building or on the premises at the time of the loss or damage.
c) Keep possession of any such property and examine, sort, arrange, remove or otherwise deal with the same.
d) Sell any such property or dispose of the same for account of whom it may Concern.
The powers conferred by this condition shall be exercisable by the Company at any time until notice in writing is given by the insured that he makes no claim under the policy, or if any claim is made, until such claim is finally determined or withdrawn, and the Company shall not by any act done in the exercise or purported exercise of its powers hereunder, incur any liability to the Insured or diminish its rights to rely upon any of the conditions of this policy in answer to any claim.

If the insured or any person on his behalf shall not comply with the requirements of the Company or shall hinder or obstruct the Company, in the exercise of its powers hereunder, all benefits under this policy shall be forfeited.

The Insured shall not in any case be entitled to abandon any property to the Company whether taken

possession of by the Company or not.

8. (Utmost Good Faith) If the claim be in any respect fraudulent, or if any false declaration be made or used in support thereof or if any fraudulent means or devices are used by the Insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the willful act, or with the connivance of the Insured, all benefits under this policy shall be forfeited.

9. (Enabling Condition to see whether the claim amount is exaggerated) If the Company at its option, reinstate or replace the property damaged or destroyed, or any part thereof, instead of paying the amount of the loss or damage, or join with any other Company or Insurer(s) in so doing, the Company shall not be bound to reinstate exactly or completely but only as circumstances permit and in reasonably sufficient manner, and in no case shall the Company be bound to expend more in reinstatement than it would have cost to reinstate such property as it was at the time of the occurrence of such loss or damage nor more than the sum insured by the Company thereon. If the Company so elect to reinstate or replace any property the insured shall at his own expense furnish the Company with such plans, specifications, measurements, quantities and such other particulars as the Company may require, and no acts done, or caused to be done, by the Company with a view to reinstatement or replacement shall be deemed an election by the Company to reinstate or replace.

If in any case the Company shall be unable to reinstate or repair the property hereby insured, because of any municipal or other regulations in force affecting the alignment of streets or the construction of buildings or otherwise, the Company shall, in every such case, only be liable to pay such sum as would be requisite to reinstate or repair such property if the same could lawfully be reinstated to its former condition.

10. (Condition of Average) If the property hereby insured shall at the breaking out of any fire or at the commencement of any destruction of or damage to the property by any other peril hereby insured against be collectively of greater value than the sum insured thereon, then the Insured shall be considered as being his own insurer for the difference and shall bear a rateable proportion of the loss accordingly. Every item, if more than one, of the policy shall be separately subject to this condition.

11. (Contribution) If at the time of any loss or damage happening to any property hereby insured there be any other subsisting insurance or insurances, whether effected by the Insured or by any other person or persons covering the same property, this Company shall not be liable to pay or contribute more than its rateable proportion of such loss or damage.

12. (Subrogation) The Insured shall at the expense of the Company do and concur in doing, and permit to be done, all such acts and things as may be necessary or reasonably required by the Company for the purpose of enforcing any rights and remedies or of obtaining relief or indemnity from other parties to which the Company shall be or would become entitled or subrogated, upon its paying for or making good any loss or damage under this policy, whether such acts and things shall be or become necessary or required before or after his indemnification by the Company.

13. (Arbitration) If any dispute or difference shall arise as to the quantum to be paid under this policy (liability being otherwise admitted) such difference shall independently of all other questions be referred to the decision of a sole arbitrator to be appointed in writing by the parties to or if they cannot agree upon a single arbitrator within 30 days of any party invoking arbitration, the same shall be referred to a panel of three arbitrators, comprising of two arbitrators, one to be appointed by each of the parties to the dispute/difference and the third arbitrator to be appointed by such two arbitrators and arbitration shall be conducted under and in accordance with the provisions of the Arbitration and Conciliation Act, 1996.

It is clearly agreed and understood that no difference or dispute shall be referable to arbitration as hereinbefore provided, if the Company has disputed or not accepted liability under or in respect of this policy.

It is hereby expressly stipulated and declared that it shall be a condition precedent to any right of action or suit upon this policy that the award by such arbitrator/ arbitrators of the amount of the loss or damage shall be first obtained.

14. (Communication) Every notice and other communication to the Company required by these conditions must be written or printed

15. (Reinstatement of SI) At all times during the period of insurance of this policy the insurance cover will be maintained to the full extent of the respective sum insured in consideration of which upon the settlement of any loss under this policy, pro-rata premium for the unexpired period from the date of such loss to the expiry of period of insurance for the amount of such loss shall be payable by the insured to the Company. The additional premium referred above shall be deducted from the net claim amount payable under the policy. This continuous cover to the full extent will be available notwithstanding any previous loss for which the company may have paid hereunder and irrespective of the fact whether the additional premium as mentioned above has been actually paid or not following such loss. The intention of this condition is to ensure continuity of the cover to the insured subject only to the right of the company for deduction from the claim amount, when settled, of pro-rata premium to be calculated from the date of loss till expiry of the policy.

Notwithstanding what is stated above, the Sum Insured shall stand reduced by the amount of loss in case the insured immediately on occurrence of the loss exercises his option not to reinstate the sum insured as above.

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FIRE GENERAL EXCLUSIONS

1. (Excess) This Policy does not cover (not applicable to policies covering dwellings) w.e.f. 01/04/2011

a) SI up to INR 10 crore per location– 5% of claim amount subject to a minimum of Rs 10,000/-
b) SI INR 10 to 100 crore per location- 5% of claim amount, minimum of INR 25,000
c) SI INR 100 to 1500 crore per location- 5% of claim amount, minimum of INR 5 lakhs
d) SI INR 1500 to 2500 crore per location- 5% of claim amount, minimum of INR 25 lakhs
e) SI above INR 2500 crore per location- 5% of claim amount, minimum of INR 50 lakhs
The Excess shall apply per event per insured.

2. (War Perils) Loss, destruction or damage caused by war, invasion, act of foreign enemy hostilities or war like operations (whether war be declared or not), civil war, mutiny, civil commotion assuming the proportions of or amounting to a popular rising, military rising, rebellion, revolution, insurrection or military or usurped power.

3. (Nuclear Perils) Loss, destruction or damage directly or indirectly caused to the property insured by
a) Ionising radiations or contamination by radioactivity from any nuclear fuel or from any nuclear
waste from the combustion of nuclear fuel
b) The radioactive toxic, explosives or other hazardous properties of any explosive nuclear assembly or nuclear component thereof

4. (Pollution & Contamination unless caused by insured perils) Loss, destruction or damage caused to
the insured property by pollution or contamination excluding
a) Pollution or contamination which itself results from a peril hereby insured against.
b) Any peril hereby insured against which itself results from pollution or contamination

5. (Curios, documents etc. > Rs. 10,000) Loss, destruction or damage to bullion or unset precious stones, any curios or works of art for an amount exceeding Rs. 10000/-, manuscripts, plans, drawings, securities, obligations or documents of any kind, stamps, coins or paper money, cheques, books of accounts or other business books, computer systems records, explosives unless otherwise expressly stated in the policy.

6. {Change of temp. (Stocks in cold storage)} Loss, destruction or damage to the stocks in Cold Storage premises caused by change of temperature

7. (Pure electrical fires) Loss, destruction or damage to any electrical machine, apparatus, fixture, or fitting arising from or occasioned by over-running, excessive pressure, short circuiting, arcing, self heating or leakage of electricity from whatever cause (lightning included) provided that this exclusion shall apply only to the particular electrical machine, apparatus, fixture or fitting so affected and not to other machines, apparatus, fixtures or fittings which may be destroyed or damaged by fire so set up. 

8. {Architects etc. fees (beyond 3% of claim amount) & Removal of debris (beyond 1% of claim
amount)} Expenses necessarily incurred on (i) Architects, Surveyors and Consulting Engineer's Fees and
(ii) Debris Removal by the Insured following a loss, destruction or damage to the Property insured by an insured peril in excess of 3% and 1% of the claim amount respectively.

9. (Consequential losses) Loss of earnings, loss by delay, loss of market or other consequential or indirect loss or damage of any kind or description whatsoever.

10. (Spoilage due to cessation of process) Loss or damage by spoilage resulting from the retardation or interruption or cessation of any process or operation caused by operation of any of the perils covered.

11. (Theft- during/ after loss) Loss by theft during or after the occurrence of any insured peril except as provided under Riot, Strike, & Malicious Damage.

12. (Earthquake) Any Loss or damage occasioned by or through or in consequence directly or indirectly due to earthquake, volcanic eruption or other convulsions of nature.

13. (Shifting of property to other place) Loss or damage to property insured if removed to any building or place other than in which it is herein stated to be insured, except machinery and equipment temporarily
removed for repairs, cleaning, renovation or other similar purposes for a period not exceeding 60 days.

14. Terrorism damage

FIRE PERILS COVERED:

1. Fire: Fire means actual ignition or burning under accidental circumstances.
Excluding destruction or damage caused to the property insured by
a) i) Its own fermentation, natural heating or spontaneous combustion.
ii) It’s undergoing any heating or drying process.
b) Burning of property insured by order of any Public Authority (Not a fortuitous event)

2. Lighting: Lightning includes any damage caused by lightning with or without ignition (Fire)

3. Explosion/Implosion: Excluding loss, destruction of or damage
a) To boilers (other than domestic boilers), economizers or other vessels, machinery or apparatus( in
which steam is generated) or their contents resulting from their own explosion/implosion;
b) Caused by centrifugal forces. (Covered by engineering policy)

4. Aircraft Damage:
Loss, Destruction or damage caused by Aircraft, other aerial or space devices and articles dropped
therefrom excluding those caused by pressure waves (e.g. Damage to window panes by vibration from low
flying planes or from sonic or supersonic aircraft.

5. Riot, Strike, and Malicious Damage:
Loss of or visible physical damage or destruction by external violent means directly caused to the
property insured but excluding those caused by
a) Total or partial stoppage of work or process or operations or omissions of any kind.
b) The insured having lost the right of possession of building or machinery etc. or premises due to
action of any lawful person or lawful authority.
c) The property has been unlawful occupied by any person or access to the premises is prevented
thereby making the insured unable to use his property.
d) Any malicious act committed in connection with Burglary, housebreaking, theft, larceny or any such attempt or any omission of any kind of any person.
If the insurer alleges that the loss/damage is not caused by any malicious act, the burden of proving the contrary shall be upon the insured.
Terrorism Damage Exclusion Warranty: The policy excludes loss, damage or expenses directly or
indirectly caused by any act of terrorism.
If the insurer alleges that the loss/damage is caused by terrorism act and not covered by the policy, the burden of proving the contrary shall be upon the insured.
TERRORISM COVER: (The Optional Cover – In conjunction with RSMD only)
Definition of Terrorism: an act or series of acts, including but not limited to the use of force or violence and/or the threat thereof, of any person or group(s) of persons, whether acting alone or on behalf of or in connection with any organisation(s) or government(s), or unlawful associations, recognized under Unlawful Activities (Prevention) Amendment Act, 2008 or any other related and applicable national or state legislation formulated to combat unlawful and terrorist activities in the nation for the time being in force, committed for political, religious, ideological or similar purposes including the intention to influence any government and/or to put the public or any section of the public in fear for such purposes. Scope & Applicability: Applicable to all insurances of terrorism risk insured along with the insurances of property in any of the insured classes.
Rates, Terms and Conditions for Terrorism Risks: These shall be decided by Pool Underwriting
Committee of GIC Re (Manager to the Indian Market Terrorism Risk Insurance Pool) and filed with IRDAfor approval under File and Use Guidelines. At present it follows overall limit per location Rs. 750 crores. The wordings for Terrorism Damage cover Endorsement and Terrorism Damage Exclusion Warranty hasbeen revised w.e.f. 01.07.2010.

6. Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation:
(Act Of God) Loss, destruction or damage directly caused by Storm, Cyclone, Typhoon, Tempest, Hurricane,Tornado, Flood or Inundation excluding those resulting from earthquake, Volcanic eruption or other convulsions of nature. (Wherever earthquake cover is given as an “add on cover” the words “excluding hose resulting from earthquake volcanic eruption or other convulsions of nature” shall stand deleted.

7. Impact Damage:
Loss of or visible physical damage or destruction caused to the property insured due to impact by any Rail/
Road vehicle or animal by direct contact not belonging to or owned by
a) The Insured or any occupier of the premises or
b) Their employees while acting in the course of their employment.
8. Subsidence and Landslide including Rock slide: Excluding loss, destruction or damage caused by
a) the normal cracking, settlement or bedding down of new structures
b) the settlement or movement of made up ground
c) coastal or river erosion
d) defective design or workmanship or use of defective materials
e) Demolition, construction, structural alterations or repair of any property or ground works or
excavations.

9. Bursting and/or overflowing of Water Tanks, Apparatus and Pipes:

10. Missile Testing operations: By the Defence Department, Government of India.

11. Leakage from Automatic Sprinkler Installations: Excluding loss, destruction or damage caused by
a) Repairs or alterations to the buildings or premises
b) Repairs, Removal or Extension of the Sprinkler Installation
c) Defects in construction known to the Insured.

12. Bush Fire: Excluding loss, destruction or damage caused by Forest Fire.
PROVIDED that the liability of the Company shall in no case exceed in respect of each item the sum
expressed in the said Schedule to be insured thereon or in the whole the total Sum Insured hereby or such other sum or sums as may be substituted thereof by memorandum hereon or attached hereto signed by or on behalf of the Company.

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FIRE BASIC PRINCIPLES :-

BASIC PRINCIPLES:-

“Fire insurance business” has been defined in section 2 of Insurance Act, 1938 as “the business of effecting, otherwise than incidentally to some other class of insurance business, contract of insurance against loss by or incidental to fire or other occurrence customarily included among the risks insured against in fire insurance policies”.

Ordinarily one may get inclined to think that it is an insurance policy which indemnifies secure a person from a harm, a loss, etc; compensate; exempt from a penalty] the insured against loss or damage to property caused by fire. But this understanding is not correct. The Fire Policy is far wider than its superficial meaning. It protects the assets against a host of perils – as many as twelve groups of perils. In view of the very wide scope of this Policy it is misnomer to call it a Fire Policy. So it has been renamed by the TAC as: STANDARD FIRE & SPECIAL PERILS POLICY (SFSP). Fire insurance contracts are governed by the general law of contract as embodied in the Indian Contract Act, 1872. According to this general law of contract a fire insurance contract must have the following essential ingredients in order to make it enforceable at law:- a) Offer and acceptance, b) Consideration, c) Agreement between the parties, d) Legal Competence of parties and Basic Principles like

i) Utmost Good Faith: To disclose all material fact which have a bearing on the insurance. The duty of disclosure of material fact ceases when the contract is concluded under common law. But in Fire Insurance the Insured should give notice, if there are any material alterations during the currency of the policy.

ii) Insurable Interest: The competency of a person to effect a contract of a fire insurance is determined by his legal capacity to contract and his legal pecuniary [adj: of or concerning money] relationship to the property. In fire insurance the insurable interest should exist at the time of taking policy, continue throughout its currency and should exists at the time of loss. Fire insurance policies are personal contracts. The moral hazard of the insured plays vital role. Hence if the property is sold the policy is not transferred automatically. Transferring the policy in the new owners name has to be agreed to, accepted and endorsed by the insurance company.

iii) Indemnity: The principle of indemnity secure a person from a harm, a loss, etc; compensate; is strictly adhered to in fire insurance. Fixing the SI is an important aspect and the responsibility is with Insured. If insurer agrees to the value it becomes “Agreed Value Policy”.

iv) Subrogation: The principle of subrogation is a corollary of the principle of indemnity. If loss suffered by the insured is recoverable from third party (ies), who is/are responsible for the loss, the insured’s right of recovery is transferred or subrogated to the insurer when they indemnify secure a person from a harm, a loss, etc; compensate;

v) Contribution: The principle of contribution is a corollary of the principle of indemnity, provided that the same property is insured under more than one policy. Insured cannot recover more than his loss; he can recover only a rateable portion of loss under each policy.

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