Fire Insurance

 

	Fire Insurance
	Fire Consequential Loss Insurance
	Industrial All Risk Insurance

 

FIRE INSURANCE

Introduction

In usual circumstances the major part of a commercial company's assets are vested in their buildings, machinery, stocks and the like. Therefore it is imperative that adequate insurance be effected on such assets to protect against the possibility of physical damage to the property in question. The standard coverage in the Fire Insurance covers Fire, Lightning and Explosion of gas used for domestic purposes. Extraneous perils can be arranged as follows:

Extraneous Peril

	Aircraft Damage
	Earthquake and volcanic eruption
	Storm Tempest
	Flood
	Explosion
	Aircraft and other aerial devices and/ or articles dropped therefrom
	Impact Damage (Own & Third Party Vehicles)
	Bursting or overflowing of water tanks, apparatus or pipes
	Electrical Installations
	Riot Strike and Malicious Damage
	Damage by Falling Trees or Branches and Objects Therefrom
	Sprinkler Leakage Damage

Minimum Information Required for Quotation

	Name of Insured
	Nature of Risk Occupation
	Location of Risk
	Construction of Building
	Sum Insured
	Claims History

 

FIRE CONSEQUENTIAL LOSS INSURANCE

Introduction

Whilst the material damage Fire Policy provides protection and compensation to an Insured against physical loss or damage to the property, it does not provide any protection against the "after effects" of such loss; namely, the loss or reduction of the ability of the Insured to maintain business at its pre-damage level due to the fact that his buildings and/or machinery have been lost or damaged, thus restricting or possibly halting the operations of the company.

Cover

The Fire Consequential Loss policy covers loss of Gross Profit following an indemnifiable peril (the perils usually follow that of the Fire policy) and is measured on the reduction in turnover compared to the same period in the last twelve months and applying the Rate of Gross Profit. Cover also extends to include Additional Expenditure reasonably incurred to minimise the loss of Gross Profit. The costs of non productive wages can be included either as treating them as a standing charge, or taking out more specific covers such as Dual Wages. Professional accountants' charges to produce certified details for the Insured's presentation of a claim could be included.

 

Interest Insured

	Gross Profit
	Wages/ Salaries
	Rental
	Auditors' Fees

 

Indemnity Period

The indemnity period is the maximum period during which the policy is to provide an indemnity following any damage and is selected by the policyholder. It should be sufficient to allow for the premises to be rebuilt and re-equipped and for the premises to be restored fully to normal conditions in every way. The indemnity period of 6 months, 12 months, 18 months, and 24 months or higher can be selected.

Information Required for Quotation

	Rate applicable on Fire Consequential Loss follows rate of the Fire Insurance
	Sum Insured of interest insured and the indemnity period selected are the major factors affecting premium costs

 

INDUSTRIAL ALL RISKS INSURANCE

Introduction

A company with total value of risks of at least RM50 million has an alternative to protect its insurance needs with the Industrial All Risks (IAR) Insurance as compared to the traditional Fire Insurance and its related Consequential Loss Insurance

Cover

As the name suggests, IAR policy is an "all risks" form of insurance which cover not only all the "named perils" of Fire Insurance but also extend to cover "accidental damage" which could not be covered under the fire insurance, subject only to specific exclusions of the policy.

Examples of Coverage in the IAR

	Theft of equipment, plant & machinery and all contents including stocks of every description kept at Insured's premises can be covered under the IAR policy instead of a separate Burglary Insurance.
	Equipment of plant & machinery in transit within the premises is covered under the IAR policy.
	Accidental damage to plate glass or any fragile item or to movable equipment e.g. forklift, hoist, crane etc by collision or overturning or impact is covered under the IAR policy (but not the Fire Policy).
	Other accidental damage not specifically excluded from the Policy.