PATUCK GALA COLLEGE OF COMMERCE &

MANAGEMENT

SUBJECT – BUSINESS ASPECT ON BANKING & INSURANCE

TOPIC - FIRE INSURANCE

 GROUP MEMBERS

SEAT NO. NAMES

9.) AMIT GOERGE

11.) PRAVIN GUPTA

12.) VIJESH JADHAV

35.) RAMEEZ SHAIKH

36.) SHAZEB SHAIKH

40.) KARAMJEET SINGH

47.) PAWAN VYAISH

52.) VIJAY SINGH

INDEX
SR NO. CONTENT

1. INTRODUCTION

2. DEFINITIONS

3. INSURANCE IS OF TWO DIFFERENT PARTS

4. FIRE INSURANCE

5. CONTIONS COVERS UNDER FIRE POLICY

6. CONDITONS DOES NOT COVER IN FIRE POLICY

7. GENERAL CONDITIONS IN FIRE POLICY

8. PROCEDURE AND DOCUMENTATION

9. CASE STUDY

10. REFERENCE
 1).INTRODUCTION
INSURANCE MEANS THE PROTECTION OF THE ECONOMIC VALUE OF ASSETS.IT IS A
METHOD OF SPREADING OVER A LARGE NUMBER OF PERSONS,A POSSIBLE FINANCIAL
LOSS,WHICH CANNOT BE BORNE BY AN INDIVIDUAL.

INSURANCE IS A SOCIAL DEVICE TO REDUCE OR ELIMINATE RISK OF LOSS TO LIFE AND

PROPERTY.A GROUP OF INDIVIDUALS TRANSFER RISK TO ANOTHER PARTY IN ORDER TO
COMBINE LOSS INCURRED.

IN SHORT:

INSURANCE IS A FINANCIAL SERVICE,

INSURANCE IS POOLING OF RISKS,

IN A CONTRACT OF INSURANCE,THE INSURER UNDERTAKES IN CONSIDERATION OF A

SUM OF MONEY TO MAKE GOOD THE LOSS SUFFERED BY THE INSURED AGAINST A SPECIFIED
RISK OR ANY OTHER CONTINGENCY.

THERE ARE TWO PARTIES TO AN INSURANCE CONTRACT,INSURANCE COMPANY AND

INSURED PARTY.

THE DOCUMENT LAYING DOWN THE TERMS OF THE CONTRACT IS CALLED INSURANCE
POLICY.THE PROPERTY,WHICH IS INSURED IS THE SUBJECT MATTER OF INSURANCE.
 1.

2).DEFINITIONS
1. INSURANCE IS A FINANCIAL ARRANGEMENT THAT REDISTRIBUTES THE COST OF
UNEXPECTED LOSSES.

2. INSURANCE IS A DEVICE TO PRODUCT AGAINST RISKS OR A PROVISION AGAINST

INEVITABLE CONTINGENCIES OR A COOPERATION DEVICE OF SPREADING RISKS.

3. INSURANCE IS A CONTRACT BETWEEN THE INSURER AND THE INSURED UNDER WHICH
THE INSURER UNDERTAKES TO COMPENSATE THE INSURED FOR THE LOSS ARISING
FROM THE RISK INSURED.IN CONSIDERATION THE INSURED AGREES TO PAY A
PREMIUM REGULARLY.
 2.

3).INSURANCE IS OF TWO DIFFERENT

PARTS
1. LIFE INSURANCE : LIFE INSURANCE COVERS THE RISKS THAT EXISTS IN ONE’S LIFE.THESE
RISKS MAY ARISE DUE TO ACCIDENT,ILLNESS OR NATURAL CAUSES.LIFE INSURANCE AIMS
TO PROTECT THE FAMILY OF THE LIFE INSURED SO THAT THEY MAY NOT SUFFER FROM
FINANCIAL PROBLEMS ON DEATH OF INSURED PERSON.

IMPORTANT TYPE OF LIFE INSURANCE

1. ENDOWMENT PRODUCTS
2. WHOLE-LIFE INSURANCE
3. TERM ASSURANCE
4. JEEVAN SURABHI
5. ANNUITIES
6. MONEY-BACK POLICIES
7. MARRIAGE ENDOWMENT/EDUCATION ANNUITY
8. HEALTH INSURANCE
9. JEEVAN SAATHI
10. KOMAL JEEVAN
11. COMPARATIVE VIEW OF CHILDREN’S POLICY
12. UNIT LINKED INSURANCE PLAN

3.
2. GENERAL INSURANCE : IT HAS BEEN EVOLVED WITH THE EVOLUTION OF BUSINESS
AND LIFESTYLE OF HUMAN BEINGS.IT IS ALSO CALLED AS NON-LIFE INSURANCE.THE
CONCEPT OF GENERAL INSURANCE REPRESENTS THE CORE OF THE EVOLUTION OF THE
WORLD-WIDE PRACTICE OF INSURANCE.

IMPORTANT TYPES OF GENERAL INSURANCE

1. FIRE INSURANCE
2. MARINE INSURANCE
3. MOTOR INSURANCE
4. CROP/AGRICULTURE INSURANCE
5. WEDDING INSURANCE
6. REINSURANCE
7. DOUBLE INSURANCE
8. BANCASSURANCE

4.
 4).FIRE INSURANCE
FIRE INSURANCE IS A CONTRACT BETWEEN THE INSURER AND THE INSURED WHEREBY
THE INSURER UNDERTAKES TO INDEMNITY THE INSURED FOR DESTRUCTION OF OR DAMAGE
TO THE PROPERLY CAUSED BY FIRE OR OTHER SPECIFIED PERILS DURING AN AGREED PERIOD
OF TIME,IN RETURN FOR PAYMENT OF A PREMIUM IN LUMPSUM OR BY INSTALMENTS.

FIRE INSURANCE IS THE OLDEST FORM OF INSURANCE.IN EARLY SOCIETY INDUSTRIAL

ACTIVITIES WERE NOT POSSIBLE WITHOUT FIRE.FIRE INSURANCE IS DESIGNED TO PROVIDE
FOR FINANCIAL LOSS TO PROPERTY DUE TO FIRE AND FEW RELATED HAZARDS.

FIRE INSURANCE IS GOVERNED BY A TARIFF UNDER THE TARIFF ADVISORY

COMMITTEE (TAC). THE PROPERTY THAT CANBE COVERED UNDER FIRE INSURANCE INCLUDES
BUILDING,MACHINERY,EQUIPMENTS,ACCESSORIES,GOODS,RAW MATERIALS,ELECTRICAL
INSTALLATIONS OF A BUILDING,RESIDENTIAL HOUSES,FURNITURES AND FITTINGS,PIPELINES
LOCATED OUTSIDE AND INSIDE THE BUILDING.

5.
 5).CONTIONS COVERS UNDER FIRE
POLICY
1. BURNING OF ANY PROPERTY
2. EXPLOSION/IMPLOSION AS MAY TO BOILERS
3. AIRCRAFT DAMAGE CAUSED BY PRESSURE WAVES
4. LIGHTNING
5. RIOT,STRIKE,MALICIOUS AND TERRORISM DAMAGE
6. STORM,CYCLONE,TYPHOONS,TEMPEST HURRICANE,TORNADO,FLOOD
7. SUBSIDENCE AND LANDSLIDE INCLUDING ROCKSLIDES
8. MISSILE TESTING OPERATIONS
9. LEAKAGE FROM AUTOMATIC SPRINKLER INSTALLATIONS
10. IMPACT DAMAGE BY RAIL,ROAD,VEHICLE OR ANY ANIMAL BY DIRECT CONTACT NOT
BELONGING TO,OR OWNED BY THE INSURED OR HIS EMPLOYEES

6.
 6).CONDITONS DOES NOT COVER IN
FIRE POLICY
1. 5% OF EACH AND EVERY CLAIM RESULTING FROM THE OPERATION AND LIGHTNING
SUBSIDENCE AND LANDSLIDE INCLUDING ROCKSLIDE COVERED UNDER THE POLICY
2. LOSS, DESTRUCTION OR DAMAGE CAUSED BY WAR
3. LOSS, DESTRUCTION OR DAMAGE DUE TO NUCLEAR HAZARD
4. LOSS, DESTRUCTION OR DAMAGE CAUSED BY POLLUTION
5. LOSS, DESTRUCTION OR DAMAGE TO UNSET PRECIOUS STONES FOR AN AMOUNT
EXCEEDING RS. 10,000
6. LOSS, DESTRUCTION OR DAMAGE TO THE STOCKS IN COLD STORAGE PREMISES
CAUSED BY CHANGE IN TEMPERATURE
7. LOSS, DESTRUCTION OR DAMAGE TO ANY ELECTRICAL
MACHINES,APPARATUS,FURNITURE ARISING FROM OVER-RUNNING,EXCESSIVE
PRESSURE,SHORT CIRCUIT,SELF-HESTING A LEAKAGE OF ELECTRICITY
8. EXPENSES INCURRED ON ARCHITECTS,SURVEYORS AND CONSULTING ENGINEER’S FEES
INCURRED BY THE INSURED IN EXCESS OF 3% AND 1% OF CLAIM AMOUNT
RESPECTIVELY

7.
 7).GENERAL CONDITIONS IN FIRE
POLICY
1. THE POLICY WILL BECOME VOID IN CASE OF NON-DISCLOSURE OF MATERIAL FACTS OR
MISREPRESENTATION
2. CANCELLATION OF THE POLICY IS POSSIBLE BY EITHER PART
3. NOTICE OF LOSS OR DAMAGE SHOULD BE GIVEN TO THE INSURER IMMEDIATELY AND
THE CLAIM SHOULD BE SUBMITTED WITHIN 15 DAYS
4. THE INSURER HAS A RIGHT TO ENTER AND TAKE POSSESSION OF THE BUILDING OR
PREMISES WHERE THE LOSS HAS INCURRED,REMOVE OR SALVAGE THE INSURED
PROPERTY
5. IF THE CLAIM IS FRAUDULENT OR FALSE,THE INSURED WILL LOSS ALL THE BENEFITS
UNDER THE POLICY
6. THE INSURER HAS RIGHT TO REPLACE,RE-INSTATE THE PROPERTY LOST OR DAMAGED
INSTEAD OF PAYING FOR THE LOSS OR DAMAGE
7. AN INSURED IS EXPECTED TO INSURE HIS PROPERTY TO THE FULLEST EXTENT OF ITS
VALUE,OTHERWISE AVERAGE CLAUSE IS MADE APPLICATE AND THEN INSURED WILL
GET PROPORTIONATE AMOUNT OF LOSS
8. IN CASE OF ONE OR MORE POLICIES COVERING THE SAME PROPERTY FOR THE SAME
HAZARD,ALL POLICIES WILL CONTRIBUTE THE CLAIM IN THE PROPORTION OF SUM
ASSURED
9. IF THE LOSS OR DAMAGE IS CAUSED BY A THIRD PARTY,THE INSURED IS REQUIRED TO
HELP AND ASSIT THE INSURER TO ENABLE IT TO RECOVER THE LOSS FROM THE THIRD
PARTY RESPONSIBLE FOR THE LOSS OR DAMAGE
10. THE AMOUNT OF PREMIUM PAYABLE UNDER THIS POLICY IS DEDUCTED FROM THE
NET CLAIM PAYABLE UNDER THE POLICY
11. ANY DISPUTE REGARDING THE AMOUNT OF CLAIM SHOULD BE REFFERED TO
ARBITRATION
12. ALL NOTICES UNDER THIS POLICY SHOULD BE GIVEN IN WRITING

8.
8).PROCEDURE AND DOCUMENTATION
1. PROPOSAL FORM: A TYPICAL PROPOSAL FORM OF A FIRE POLICY SEEKS
INFORMATION FROM THE INSURED,WHICH COVERS THE IMPORTANT ASPECTS OF
RISK ASSESSMENT SUCH AS DESCRIPTION OF THE PROPERTY SUM ASSURED,HISTORY
OF INSURANCE AND RISK INSPECTION REPORT OF THE INSURER’S ENGINEER.

2. COVER NOTE: THE COVER NOTE IS AN UNSTAMPED DOCUMENT OF THE EVIDENCE

OF INSURANCE COVER UNTIL THE ISSUANCE OF THE POLICY.THE COVER NOTE
PROVIDES INSURANCE AGAINST SPECIFIC PERILS ON THE USUAL TERMS AND
CONDITIONS OF THE INSURER.IT IS ISSUED AFTER THE INSURER RECEIVES THE DULY
COMPLETED PROPOSAL WITH THE INSPECTION REPORT AND OTHER INFORMATION
SOUGHT BY INSURANCE COMPANY.

3. POLICY: THE POLICY DOCUMENT IS THE FINAL CONTRACT BETWEEN THE INSURER
AND THE INSURED.IT IS A STAMPED DOCUMENT.IT CONTAINS THE DETAILS OF THE
CONTRACT WITH RELEVANT SCHEDULES AND RATES.

4. CLAIM: THE CLAIM IS A FORM PRESCRIBED BY THE INSURER WHICH CONTAINS THE
NAME AND ADDRESS OF THE INSURED,POLICY NUMBER,DATE,TIME,PLACE AND CAUE
OF FIRE,THE DETAILS OF PROPERTY DAMAGED,ETC.

5. SURVEY REPORT: A SURVEY REPORT IS A REPORT SUBMITTED BY THE SURVEYOR

TO THE INSURANCE COMPANY GIVING THE DETAILS OF THE FIRE,LOSS,VALUE OF
SALVAGE,EXPENSES,ETC.THE SURVEYOR IS APPOINTED BY THE INSURANCE COMPANY
TO ASSESS THE LOSS OF THE POLICY.SURVEYOR GIVES REPORT TO COMPANY,ON THE
BASIS OF REPORT THE INSURANCE CLAIM IS TO BE SETTLED WITH THE INSURED.

9.

9). CASE STUDY

FACTORY FIRE DAMAGE

FIRE DAMAGE AT FACTORY WAREHOUSE

AN EXTENSIVE FIRE IN A FURNITURE MANUFACTURERS IN KENT. WE WERE ABLE TO ASSIST WITH

OBTAINING ALTERNATIVE PREMISES WHILST BUILDING REPAIRS WERE UNDERTAKEN . WE NEGOTIATED

PREMIUM PAYMENTS WITH THE LANDLORD ’S INSURERS IN ORDER TO SPEED UP THE REPAIRS AND GET THE

FACTORY RUNNING AGAIN WITH THE LEAST POSSIBLE DELAY. WE NEGOTIATED WITH THE CLIENT ’S

INSURERS A BUSINESS INTERRUPTION CLAIM WHICH RESULTED IN PAYMENTS BEING MADE TO THE CLIENT

BY THE INSURER FOR A PERIOD OF 18 MONTHS AFTER THE FIRE.

PUBLIC HOUSE FIRE

SUBSTANTIAL FIRE DAMAGE TO A PUBLIC HOUSE IN LONDON. WE WERE ABLE TO NEGOTIATE A CASH

SETTLEMENT AS OPPOSED TO REINSTATING THE PROPERTY , WHICH WOULD NOT HAVE BEEN IN THE CLIENTS

BEST INTEREST , AS IT SUBSEQUENTLY PROVED MOST BENEFICIAL TO REDEVELOP THE SITE.

10.

EQUESTRIAN CENTRE FIRE

SIGNIFICANT FIRE SPREAD FROM ADJOINING FARMLAND AND RESULTED IN THE DESTRUCTION OF GRAZING

LAND AND INJURY TO SEVERAL HORSES. THIS IN TURN HAD A DEVASTATING EFFECT ON THE NEW BUSINESS
WHICH COMPRISED THE TRAINING AND SALE OF YOUNG HORSES . WE WERE ABLE TO CONVINCE INSURERS

THIS WAS A NEW ENTERPRISE AND THE BUSINESS INTERRUPTION LOSS SHOULD BE CONSIDERED ON THE

BASIS OF THE BUSINESS PLAN WHICH HAD BEEN PREPARED FOR THE BANK .

CONTRACTORS ALL RISK

CONTRACTORS CLAIM INVOLVING WATER DAMAGE , DUE TO VANDALISM , TO A DEVELOPMENT OF FLATS.

WE NEGOTIATED A SUBSTANTIAL INCREASE ON THE CLAIM SETTLEMENT ALTHOUGH THE FLATS WERE AT

VARYING DEGREES OF COMPLETION.

SUBSIDENCE
INSURERS REJECTED A SUBSIDENCE CLAIM IN CAMBRIDGE . WE
CONSIDERED THE INSURERS INTERPRETATION OF THE POLICY

WORDING TO BE INCORRECT . WE TOOK THE MATTER TO THE

INSURANCE OMBUDSMAN AND THE CLAIM WAS AGREED BY

THE OMBUDSMAN RESULTING IN A PAYMENT TO THE CLIENT

IN EXCESS OF £80,000.

11.

WATER DAMAGE
A MANUFACTURER OF CD’S & DVD’S IN SUSSEX HAD CONSIDERABLE DAMAGE TO SPECIALIST MACHINERY.
WE NEGOTIATED WITH INSURERS ON THE INTERPRETATION OF THE POLICY WORDING ; THEY MAINTAINED

THAT THE NEAREST EQUIVALENT REPLACEMENT WAS SIGNIFICANTLY LESS THAN THE CLIENT CLAIMED .

AFTER CONSIDERABLE NEGOTIATIONS INSURERS AGREED THAT WE WERE CORRECT WITH OUR

INTERPRETATION AND PAID OUT ON THE HIGHER PRICE .

DOMESTIC CLAIM
THERE WAS A DISPUTE OF POLICY WORDING IN RESPECT OF A FITTED KITCHEN & WALL TILING. A FTER OUR
NEGOTIATIONS THE INSURER AGREED TO REPLACE THE WHOLE KITCHEN INCLUDING WALL TILING

THROUGHOUT .

12.

10).REFERENCE

1.) ASPECTS IN BANKING & INSURANCE (VIPUL PRAKASHAN)

2.) ON THE WEB SITE (MEDWAY & KENT BUSINESS)

3.) ICMR-INDIA ORGANISATION

13.