Also known as: Standard Fire & Special Perils Policy
Cover for buildings, plant, machinery and stock against fire and a defined list of additional perils.
A Standard Fire and Special Perils Policy is the base property cover for Indian businesses. Despite the name, it covers considerably more than fire. The policy responds to a defined list of perils — fire, lightning, explosion, aircraft damage, riot and strike, storm, flood, subsidence, bursting of water tanks, and impact damage among them. It is the policy most businesses hold first, and the one most often left unreviewed as the business grows.
Any business that owns or leases premises, holds stock, or operates plant and machinery. Manufacturing units, warehouses, retail outlets, offices, hotels and hospitals all typically hold this cover. Where premises are leased, the landlord insures the structure and the tenant insures contents and improvements — a split that is frequently misunderstood.
Sum insured should reflect reinstatement value — what it would cost to rebuild or replace today — not the original purchase price or book value. Stock is usually declared at cost. Where the declared value falls short of actual value, the average clause applies and claims are settled proportionally. A business insured for half its value receives half of any claim, even a small one.
The difference between a policy that responds and one that disappoints usually sits in details that are easy to overlook at purchase.
Not sure which combination fits your business?
Speak to an AdviserNot by law for most businesses. However lenders almost always require it as a condition of secured lending, and commercial lease agreements frequently make it contractual.
Not as standard. Earthquake cover is available as an add-on and is worth considering depending on the seismic zone of the location.
If the sum insured is lower than the actual value at risk, the insurer settles claims in the same proportion. Insure for 60% of value and you recover 60% of any claim.
Standard Fire covers named perils only. Industrial All Risk covers all perils except those specifically excluded, which is broader. IAR is generally available to businesses above a defined sum insured threshold.
No. Loss of income during the period of repair requires a separate Fire Loss of Profit policy, which is usually placed alongside.
It depends on claim size and documentation. A surveyor is appointed for most commercial claims. Accurate documentation and early notification materially shorten the timeline.