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

INDEXSR 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).INTRODUCTIONINSURANCE 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.

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2).DEFINITIONS1. 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.

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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 PRODUCTS2. WHOLE-LIFE INSURANCE3. TERM ASSURANCE4. JEEVAN SURABHI5. ANNUITIES6. MONEY-BACK POLICIES7. MARRIAGE ENDOWMENT/EDUCATION ANNUITY8. HEALTH INSURANCE9. JEEVAN SAATHI10. KOMAL JEEVAN11. COMPARATIVE VIEW OF CHILDREN’S POLICY12. UNIT LINKED INSURANCE PLAN

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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 INSURANCE1. FIRE INSURANCE2. MARINE INSURANCE3. MOTOR INSURANCE4. CROP/AGRICULTURE INSURANCE5. WEDDING INSURANCE6. REINSURANCE7. DOUBLE INSURANCE8. BANCASSURANCE

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4).FIRE INSURANCEFIRE 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.

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5).CONTIONS COVERS UNDER FIRE POLICY

1. BURNING OF ANY PROPERTY2. EXPLOSION/IMPLOSION AS MAY TO BOILERS3. AIRCRAFT DAMAGE CAUSED BY PRESSURE WAVES4. LIGHTNING5. RIOT,STRIKE,MALICIOUS AND TERRORISM DAMAGE6. STORM,CYCLONE,TYPHOONS,TEMPEST HURRICANE,TORNADO,FLOOD7. SUBSIDENCE AND LANDSLIDE INCLUDING ROCKSLIDES8. MISSILE TESTING OPERATIONS9. LEAKAGE FROM AUTOMATIC SPRINKLER INSTALLATIONS10. IMPACT DAMAGE BY RAIL,ROAD,VEHICLE OR ANY ANIMAL BY DIRECT CONTACT NOT

BELONGING TO,OR OWNED BY THE INSURED OR HIS EMPLOYEES

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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 WAR3. LOSS, DESTRUCTION OR DAMAGE DUE TO NUCLEAR HAZARD4. LOSS, DESTRUCTION OR DAMAGE CAUSED BY POLLUTION5. LOSS, DESTRUCTION OR DAMAGE TO UNSET PRECIOUS STONES FOR AN AMOUNT

EXCEEDING RS. 10,0006. LOSS, DESTRUCTION OR DAMAGE TO THE STOCKS IN COLD STORAGE PREMISES

CAUSED BY CHANGE IN TEMPERATURE7. 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

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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 PART3. NOTICE OF LOSS OR DAMAGE SHOULD BE GIVEN TO THE INSURER IMMEDIATELY AND

THE CLAIM SHOULD BE SUBMITTED WITHIN 15 DAYS4. 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

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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.

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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. AFTER OUR

NEGOTIATIONS THE INSURER AGREED TO REPLACE THE WHOLE KITCHEN INCLUDING WALL TILING

THROUGHOUT.

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10).REFERENCE

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

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

3.) ICMR-INDIA ORGANISATION

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