What are the 12 Perils of a Standard Fire Insurance Policy?

Businesses and homeowners face constant risks from natural and man-made disasters. One of the most effective ways to safeguard property and financial stability is through fire insurance protection.

In India, the Standard Fire and Special Perils (SFSP) Policy offers broad protection against several unforeseen events, making it a cornerstone for individuals and enterprises seeking reliable coverage.

What is the Standard Fire Insurance Policy?

The Standard Fire Insurance Policy, also called the Standard Fire and Special Perils Policy (SFSP), is a comprehensive insurance product designed to protect physical assets. It covers damages not only from fire but also from a list of defined perils.

For businesses, it has become simpler to buy business insurance online, ensuring convenience and immediate access to coverage tailored to operational risk.

The Standard Fire Insurance Policy is regulated by the Insurance Regulatory and Development Authority of India (IRDAI). It is standardised in structure, ensuring uniformity across insurers while offering policyholders clarity about the risks covered.

● Assets like buildings, plants, machinery, furniture and stocks are usually covered.

● The policy follows a “named perils” approach. Losses are covered only if they result from listed events.

● Add-on covers can further extend the scope of coverage.

The 12 Standard Perils Explained

Fire

This is the core of the policy, covering damage caused by accidental fire outbreaks. It excludes cases where the fire is intentional or arises from nuclear risks, war or pollution. For instance, if machinery overheats and sparks a fire that damages stock, the policy covers the loss.

Lightning

Lightning strikes can cause direct damage to structures, electronics or even ignite fire. This peril ensures compensation for destruction caused by lightning, including collapsed walls, burnt electrical fittings or fire-related damages.

Explosion/Implosion

Explosions from gas cylinders, boilers or industrial machinery, as well as implosions from sudden inward collapse of equipment, are covered. For example, a chemical storage tank explosion causing property damage would fall under this peril.

Aircraft Damage

Any loss or damage by aircraft articles dropped from them (except sonic boom vibrations) is included. For instance, if debris from an aircraft damages a factory roof, it’s covered.

Riot, Strike and Malicious Damage

Losses resulting from civil commotion, labour unrest, or vandalism are included. This helps businesses that may suffer damage during public disturbances, protests or deliberate attacks on property.

Storm, Cyclone, Typhoon, Hurricane, Tornado

Extreme weather events like strong winds, hurricanes or cyclones can cause roof collapses, uprooted trees or shattered glass. This peril covers structural and asset losses from such natural calamities.

Flood, Inundation

Heavy rainfall or rising water levels that flood premises, warehouses or offices are covered. This also includes damage from waterlogging, which is common in urban areas during monsoons.

Impact Damage

If property is accidentally damaged by vehicles (not belonging to the insured), animals or falling trees/poles, the policy provides compensation. For example, a truck losing control and hitting a warehouse wall would be covered.

Landslide, Rockslide

Natural shifts in terrain, such as landslides or falling rocks, often triggered by heavy rain or earthquakes, can severely damage property. This peril ensures protection for such geophysical risks.

Missile Testing Operations

Losses resulting from official and authorised missile testing operations are included.

Leakage from the Automatic Sprinkler System

Fire suppression systems can sometimes malfunction, leading to accidental water leakage that damages goods or equipment. This peril ensures such incidents are covered, even if there was no actual fire.

Bush Fire

Uncontrolled bush or jungle fires can spread rapidly, damaging nearby buildings, farms or warehouses. This peril offers protection against such natural fires, excluding controlled agricultural burning.

TATA AIG: A Reliable Protection for Your Property and Business

When looking for reliable fire insurance, TATA AIG offers comprehensive coverage under its Standard Fire and Special Perils Policy. With flexible add-ons, transparent claims processes and the option to buy business insurance online seamlessly, TATA AIG ensures both individuals and businesses remain secure against unpredictable risks. Choosing a trusted insurer like TATA AIG not only safeguards your property but also provides peace of mind and long-term stability.