Fire and Allied Perils Insurance

Comprehensive insurance coverage for losses due to fire and other allied perils.

Fire and Allied Perils Insurance

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A fire and allied perils insurance policy is a unique insurance plan that protects a policyholder’s financial interests against unanticipated events brought on by accidental explosion, fire, lightning, damage or destruction by man-made hazards like riots, strikes, etc.

In addition, fire and allied insurance also provide monetary coverage against destruction caused by aerial devices and natural disasters like cyclones, storms, floods, etc. Lastly, it compensates for landslide damage, damages brought on by the on-road collision of a rail or vehicle, overflowing or bursting water tanks and pipes, hazards spurred by contamination and pollution, missile testing activities, leaks from automatic sprinkler installations, and bush fire.

In simple terms, A Fire and Allied perils insurance plan is a contract in which an insurer promises to compensate for losses and damages to a property for a specific time. Usually, the basic tenure on such policies is for one year; however, it can be extended annually..

Who needs Fire and Allied Perils insurance?

Any individual or organisation with a financial stake in the insured property can apply for this insurance. Therefore, fire & allied perils insurance is an ideal choice for property owners, businesses that hold property in trust or on commission, and financial institutions having a stake in a specific property.

Why Buy Fire and Allied Perils Insurance? 

The following are a few benefits of a fire and allied perils insurance policy:

  • For factory and office buildings, the policy covers damage to furniture, fixtures, and fittings caused by fire and allied perils.
  • The expense of repairing devices damaged by fire policy perils is also covered by insurance.
  • The premium rates are reasonable.
  • Comprehensive coverage also covers losses brought on by natural disasters, including landslides, cyclones, floods, earthquakes and inundation.

Possible Risk Scenarios Covered by Fire and Allied Perils Insurance

A fire and allied perils insurance plan provides financial coverage against a variety of risk scenarios, such as:

  • Thunderstorms
  • Rallies and strikes
  • Malicious harm
  • Impact damage (by vehicles & animals)
  • Aircraft damage
  • Storms, typhoons, cyclones, and similar natural calamities
  • Flooding, including the spilling of collected rainwater after torrential downpours
  • Earth-quake
  • Bursting of water tanks and other equipment
  • Burglary in the insured premises

Major Inclusions of Fire and Allied Perils Insurance

Fire and Allied Perils Insurance policy covers damage caused due to –

  • Aircraft hazard
  • Hurricanes, tornados, cyclones, floods, tempests
  • Riot, malicious injury, and strikes
  • The impact of a third party (animal or a car) on the road or rails
  • Subsidence, including road slides and landslides
  • Equipment or water tanks overflowing or bursting
  • Leakage caused by the automatic sprinkler setup
  • Any contamination or pollution brought on by the dangers mentioned above
  • Missile testing activity
  • Forest fire

In addition:

  • The policy compensates for up to a specific amount of the consulting engineer and surveyor's fees.
  • It also includes all costs associated with clearing the debris, which will come under the claim amount.
  • Temporary machinery and equipment removal for cleaning, repairs, renovations, or other similar purposes.

Major Exclusions of Fire and Allied Perils Insurance

Certain particular exclusions would apply to the Fire and Allied Perils Insurance policy, including: 

  • Risks related to war
  • Nuclear hazards
  • Terrorism and sabotage
  • A fire caused by spontaneous combustion or internal fermentation
  • Contamination & pollution (unless caused by an insured peril)

Factors Affecting the Price of Fire and Allied Perils Insurance

The Fire and Allied Insurance policy prices are determined based on many factors. The key variables that influence the cost of fire insurance are as follows:

  • Occupancy - The cost of fire insurance is based on the type of occupancy or the use to which the structure is put. Due to their smaller risk exposures, businesses, including offices, restaurants, and shops, are only charged a small premium. However, the premium rate for industrial, warehouse and manufacturing buildings may be higher because high-risk businesses use them. In addition, the premium costs go up if your structure is exposed to basement risk.
  • Location of the property - When determining premiums, the location of your facility is crucial. A larger premium is assumed in multiple-risk locations compared to a single-risk site.
  • The net worth of a business and overall assets - The fundamental determinant of the premium amount is the total value of your property and other assets. When determining the premium amount, the building's market worth and the purchase price of all the contents are considered.
  • Add-on covers - Several add-on covers are available for an extra premium charge. Fire insurance may include special perils coverage, and you can add these to the existing fire insurance coverage based on your needs.

Some add-ons that can help you in customizing Fire and Allied Perils Insurance according to your needs are:

  • Fees for surveyors, consulting engineers, and architects
  • Loss of rent
  • Debris removal
  • Initial start-up costs
  • Additional costs for accommodation

A fire can ruin the property and impede your business operations. However, with Fire and Allied Perils Insurance, you can continue the business operations as you will receive reimbursement for damages caused due to unforeseen circumstance. With Policybazaar as your insurance partner, you can opt for a right insurance policy and conduct your business with peace of mind.

FAQ's

Q1. What is the Fire and Allied Perils Insurance in UAE?

Ans: The Fire and Allied Perils Insurance offers financial protection to the movable and immovable financial properties of the insured against the risk or damages due to fire, lightning, explosions, earthquakes, storms, and more.

Q2. Who is eligible to avail of Fire and Allied Perils Insurance in UAE?

Ans: Fire and Allied Perils Insurance can be obtained by anyone who has a financial stake in the insured property like businesses, the general public, financial institutions, and government holdings.

Q3. What events are covered in the Fire and Allied Perils Insurance?

Ans: The Fire and Allied Perils Insurance plans cover damages due to the following events -

  1. Riots and strikes
  2. Lightning
  3. Aircraft damage 
  4. Malicious damage
  5. Damages by animals or vehicles 
  6. Storms and typhoons leading to thefire
  7. Earthquakes
  8. Bursting of water tanks and more
Q4. What are the additional coverages in Fire and Allied Perils Insurance?

Ans: The notable add-ons in the Fire and Allied Perils Insurance include -

  1. Swimming pools in the event of an earthquake 
  2. Loss of rent due to a fire 
  3. Loss and damages to underground tanks due to earthquake
Q5. What considerable factors are included to calculate the premium cost in the Fire and Allied Perils Insurance?

Ans: The calculation of premium for Fire and Allied Perils Insurance plans is based on the following elements -

  1. Nature and type of business
  2. Value of the property insured, like buildings, stocks, and so forth
  3. Nature of construction of the property 
  4. Housekeeping status
  5. Location of the premises insured
  6. Availability of the firefighting appliances
Q6. What benefits do Fire and Allied Perils Insurance offer?

Ans: With Fire and Allied Perils Insurance, numerous benefits come along such as -

  1. Coverage of massive potential losses
  2. Minimised financial burden of the insured
  3. Temporary accommodation
  4. Replacement of goods damaged in the fire
  5. Peace of mind for the insured