Fire and Allied Perils

Fire implies the actual ignition of something which ought not to be on fire and it must be accidental or fortuitous as far as the insured is concerned. The fire need not originate in the insured premises, so if a fire occurs in a neighbouring premises and as a result damage by scorching or blistering is caused to the insured property, that would be recoverable under the policy. Other circumstances in which the loss is so closely connected with the fire that it is regarded as covered by the policy include:

(a)       property damaged by water or other extinguishing agents used in putting out the fire;

(b)       damage done by the fire brigade in the execution of their duties;

(c)       damage caused by falling walls or parts of a building in which the fire takes place;

(d)       loss of or damage to property removed from a burning building caused by rain, theft, or damage during removal, provided that the removal was justified and that the insured took steps, as soon as reasonably possible, to protect the removed property from further damage.

Fire resulting from the spontaneous fermentation or heating of goods is generally excluded under the standard fire policy as is fire caused by or resulting from the use of any process involving the application of heat. Two examples will illustrate the practical effect of these exclusions;

Ø       a haystack catches fire through it’s own spontaneous heating. The haystack itself is not covered, but if the fire spreads and damages nearby property, such further damage would be covered.

Ø       Goods undergoing a heating process ignite and the fire spreads. The only part of the loss not covered is that in respect of the goods being heated.

Lightning

This peril covers any damage caused by a direct strike by lightning but does not cover the indirect effects such as damage to any dynamo, transformer, motor, wiring, main or other electrical appliance directly caused by short circuiting, overrunning, excessive pressure or leakage of electricity. Damage caused by fire resulting from such causes and originating outside the appliance would be covered.

Explosion

Although a fire policy insures fire resulting from explosion, the concussion damage is not covered (apart from the limited cover given in respect of explosion of boilers used for domestic purposes only, and of gas used for domestic purposes and for heating). The intention of this exclusion is to avoid an overlap with the cover normally available for such plant under an engineering policy. The exclusion would not, however, exclude destruction or damage directly caused by the explosion of unburnt gases in any part of a steam boiler or other pressure vessel or in the flues (flue gas explosion). Destruction or damage caused by any consequent bursting of such boiler or vessel would be excluded.  

Explosion hazard is frequently present in industry. Apart from the bursting of boilers or other enclosed vessels, there are the risks of dust explosion and explosion of flammable vapours. Chemical works present their own hazard and bad storage arrangements may present an explosion risk through bringing together substances which should be kept apart. The inherent danger of some substances must be recognized.      

Aircraft

Damage caused by an aircraft crashing into an insured property is covered under the policy. Destruction or damage caused by pressure waves from aircraft or other aerial devices travelling at sonic or supersonic speeds is excluded.

Storm and Tempest

These words are used in their everyday day sense to denote some form of atmospheric disturbance such as wind, rain or snow storms. Cover would include damage caused by overflowing rainwater pipes and gutters as a result of heavy rainfall.

Flood

Flood can be better described as “the inundation of normally dry land by water overflowing from the normal confines of any natural watercourse or lake (whether or not altered or modified), reservoir, canal or dam.”

Subsidence or landslip resulting from flood or heavy rains would not be covered.

Earthquake

This extension gives cover for both fire and shock damage caused by

earthquake.

Burst Pipes and Overflowing of Water Apparatus

The cover given for damage following the bursting or overflowing of water tanks, apparatus or pipes in buildings usually presents few difficulties provided the property is maintained in a good state of repair. The nature of the contents, if insured, is important because some articles or commodities are highly susceptible to damage by water.

Riot, and Civil Commotion

The basic riot cover includes damage caused by persons acting on behalf of or in connection with any political organization but excludes damage caused directly or indirectly by the total or partial cessation of work. Civil commotion is used to indicate a stage between a riot and civil war. It has been defined as an insurrection of the people for general purposes, not amounting to rebellion.  

Malicious Damage

Covers damage directly caused by a malicious act whether or not the act is committed in the course of a disturbance of the public peace but excluding damage by explosion and damage arising out of or in the course of theft or attempted theft. This peril should only be covered as an extension of RCC cover and not in isolation.

Accidental Damage

This coverage is not normally found in the basic Fire policy. However, Brokers may ask that it be inserted subject to a sub-limit.  Basically, it covers any other damage (other than those perils listed above) to the insured property.  The limit provided for the cover is substantially lower than the policy limit and usually reflects a first loss amount only.

Any questions or comments please feel free to give me a call

IMAM MUSJAB – 08128079130

imusjab@qbe.co.id