Fire Insurance – What Is Covered in a Standard Fire Insurance Policy

Uncertainty is the nature of the world we live in. Natural disasters, flash floods, hurricanes and fires are among the several hazards that can happen anytime. Fire is a significant threat to businesses. Without a fire insurance policy in place, the monies you’ll be incurring for repairs could leave you bankrupt and out of business in quick succession.

The fire insurance policy offers cover against an unexpected loss or damage to property due to fire or other risks covered under the policy agreement.

What is Standard Fire Insurance Policy

Standard Fire Insurance Policy is a traditional cover that offers cover against fire and allied perils which are named in the policy. The policy can cover the building (including plinth and foundation), plant and machinery, stocks, furniture, fixtures and fittings and other contents.

What Does It Cover?

Standard fire policy provides cover for damage to property caused by fire, lightning or explosion: Where the explosion is brought about by Gas or boiler not used for an industrial purpose (i.e.) explosion of Gas or boilers used for domestic purpose only is covered.

Upon payment of additional premium, additional perils can be covered in the policy, and they include the following:

• Storm,
• Tempest or flood
• Subsidence
• Burst pipes
• Earthquake
• Aircraft and articles dropped from them.
• Riot
• Civil commotion
• Malicious damage
• Impact by vehicles and explosion

What are The Main Parts of A Standard Fire Policy

The Standard Fire Policy has four main sections in its contract, and they include the following:

1. Declaration- this includes the description and location of the properties insured, name of insured, as well as premium payable
2. Contractual agreements and guidelines of the policy which includes the premium amount, responsibilities of the insured, steps the insured must take in the event of loss and resultant claims.
3. Policy conditions – this describes what suspends or restricts the policy coverage, such as an increase in risk factor with the knowledge of the insured.
4. Policy exclusions – these are risks not covered under the policy,

Types Fire Insurance Issued By Insurance Companies in Nigeria

Nigerian Insurance companies provide fifteen different classes of fire insurance policies to protect individuals and businesses from losses caused by fire. There are various forms of policy contracts for different types of situations.

For meeting the various needs of individuals and businesses, there are multiple forms of fire policies that are issued.

1. Valued Policy.
2. Consequential Loss Policy.
3. Specific Policy.
4. Excess Policy.
5. Average Policy.
6. Floating Policy.
7. Adjustable Policy.
8. Declaration of Policy.
9. Maximum Value of Discount Policy.
10. Reinstatement Policy.
11. Comprehensive Policy.
12. Valuable Policy.
13. Escalation Policies.
14. Add on Covers Policy.
15. Sprinkler Leakage Policy.

Which Risk Cannot Be Covered Under The Standard Fire Policy

However, there are some risks which are exempted from the policy coverage on the insurance policy, they include but not restricted the following listed;

1. Any form of excesses as specified in the policy
2. Loss, destruction or partial damage caused by war, invasion, or the act of foreign enemy hostilities 
3. Nuclear risks
4. Loss or damage from Pollution or contamination
5. Loss of earnings, loss by delay, loss of market or other consequential or indirect loss or damage of any kind or description whatsoever

Conclusion

You must understand the policy conditions before opting for a standard fire insurance policy. This will guide your actions while the insurance policy is in force as well as ensure a seamless claim process experience in the event of a claim.