12 Fire Insurance Perils 

As per the India Risk Survey Report 2021, businesses consider fire the fourth disruptive risk. Fire is voted the third most significant risk for the manufacturing sector. Fire insurance policies have thus been a major purchase for businesses in recent years. This policy safeguards the insured against unforeseen losses caused due to fire and allied perils. The perils of standard fire insurance policy can be both natural or manmade.

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Fire Insurance Policy for SMEs

Fire incidences can be disastrous to companies leading to a financial, physical and mental impact on the owner of the business as well as the employees. The right insurance policy can take care of the financial burden. Before you buy a fire insurance , it is always a great idea to thoroughly understand the inclusions and basic exclusions.

The first step to understanding the policy you wish to buy is to know the common perils of standard fire insurance policy that may be covered. A typical fire policy covers buildings, plant and machinery, stocks and other assets.

12 Fire Insurance Perils

Here is the list of 12 perils of standard fire insurance policy:

  1. Fire: Generally, any damage caused due to fire is covered under a fire insurance policy. However, there are a few exclusions like the damage or destruction caused by its fermentation or natural heating.
  2. Lightning: Damages caused due to lightning, for instance, damage to the roof or the building, are covered under the standard fire policy.
  3. Explosion / Implosion: If your insured premise is damaged due to a fire caused by either explosion or implosion, a fire insurance policy will cover damages caused by both. However, perils of standard fire insurance policy coverage exclude losses caused to:
    • Boilers
    • Economizers
    • Machinery or apparatus in which steam is produced
  4. Aircraft damage: Damage or loss caused by an Aircraft or any other aerial devices or articles dropped from them are covered under special perils insurance
  5. Riots, strikes, or terrorist activity: Perils of standard fire insurance policy coverage includes the losses or damages caused by external, violent situations like riots, strikes, or terrorist activity.
  6. Natural calamities like storms, cyclones, hurricanes, and floods: When you opt for a standard fire insurance policy, you safeguard your business property from natural disasters that can cause huge losses and destruction. However, it is to be noted that a standard fire policy does not cover earthquakes or volcanic eruptions. You can opt for an additional cover for the same.
  7. Impact damage: This policy also covers damage or loss caused to the property due to the impact of any vehicle or animal being in direct contact with the property. The said vehicle or animal should not belong to the insured, the occupier of the premise or an employee present during his employment.
  8. Subsidence and landslide: In case of an unfortunate event of a landslide or subsidence that may cause damage to your property, a standard fire insurance policy can get you covered. Exclusions to this include:
    • Normal cracking or bedding down of the insured property
    • Coastal erosion
    • Defective design or materials
  9. Bursting/overflowing of water tanks, pipes and apparatus: This policy covers damages of busting of pipes, water tanks and apparatus.
  10. Missile testing operations: Standard fire and special perils insurance also provide coverage for damages caused due to missile testing operations.
  11. Leakage from automatic sprinkler installations: Perils of standard fire insurance policy coverage includes accidental leakage from automatic sprinkler installations. But any damages caused while repairing or making alterations to the building, removing/extending the sprinkler installation or any other defect the insurer already knew are excluded.
  12. Bush fire: Bush fire causing damage to the property is covered under the fire insurance policy. However, it is to be noted that forest fires are not included in this policy.


For Small and Medium Enterprises (SMEs) or start-ups, damages caused due to fire can be financially exhausting. Not just damaging the property, a fire can also bring your business to a standstill. You can replace or repair the damages with fire insurance and keep your business running. All fire insurance policies usually cover the above-mentioned perils of standard fire insurance policy. However, it is always recommended to get in touch with an expert before purchasing any insurance policy for your business.

Written By: PolicyBazaar - Updated: 04 November 2022
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Policybazaar for Business - Fire Special Perils Insurance - Customer Reviews
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Based on 83 reviews
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4.8 October 09, 2022
Amazing Customer Support
I am using a fire insurance policy from policybazaar and experienced amazing feedback from them in claim settlement. I have a sports merchandise shop that caught fire last yearI raised a claim which was resolved within a few days without any hassles.
4.8 October 08, 2022
Helpful Support
The support team of Policybazaar is really helpful and prompt. They solve all your queries fast. Would definitely recommend Policybazaar for purchasing insurance .
4.8 October 07, 2022
Extensive Cover
Got a fire insurance policy for my shop and it was really extensive with so many features. Purchased it from Policybazaar without paying any commission fees. Great coverage.
4.5 October 06, 2022
User Friendly Website
We deal in the cotton industry and suffered a huge loss last year because of the fire. We were looking for insurance to safeguard us financially from any such incident in the future. We landed on the policybazaar website and bought fire insurance. Their website is well managed and gives all the necessary information.
4.8 October 05, 2022
Plans Are In Budget
Had to purchase a fire insurance which should be in my budget as I run a very small store. Got a lot of affordable plans on Policybazaar and purchased the one that suited my budget. All plans are in budget and with so many features.
4.3 October 04, 2022
Covered My Shop
I have a shop of garments and it caught fire last year in which I lost items worth thousands. Purchased a fire insurance from Policybazaar and now I feel really relieved that it would financially cover my shop in such circumstances.
4.3 October 03, 2022
Faster Claim Settlement
A part of my warehouse having thousands of material caught fire. Luckily I had a fire insurance policy that I could claim and received compensation from them. It was such a relief. The claim settlement team at Policybazaar is helpful and really quick.
4.5 October 02, 2022
I have a warehouse of clothes and was planning to buy a fire insurance policy to cover my material from unwanted fire. Got a really affordable plan from Policybazaar with some really great features.
4.5 October 01, 2022
Budget Friendly
Wanted to cover my crockery shop from fire and was searching for an affordable plan. Found a great plan at Policybazaar which suited my budget.
4.5 September 30, 2022
Instant Purchase
Wanted a fire insurance policy for my crockery business and could purchase it instantly from Policybazaar. The process was quick instant and very easy.