What are the 12 perils of standard fire insurance policy?

What does it cover?

A Standard Fire Insurance Policy (also known as a Standard Fire and Special Perils Policy) protects physical assets—like buildings, machinery, stock, and plant—from fire and 11 additional named perils. 

The 12 Perils 

1. Fire – Excludes spontaneous combustion, heat from processing, public-authority-ordered burning.
2. Lightning – Damage or structural cracks caused by strikes. 
3. Explosion/Implosion – Except damage to boilers, steam vessels, etc. 
4. Aircraft Damage – Includes losses from aircraft or aerial objects. 
5. Riot/Strike/Malicious Damage (RSMD) – Covers violent public acts. 
6. Storm, Flood, Cyclone, Typhoon, Tempest, Hurricane – Does not cover earthquakes or volcanic eruptions 
7. Impact Damage – From third-party vehicles or animals. 
8. Subsidence/Landslide/Rockslide – Excludes normal settlement, erosion, faulty construction. 
9. Bursting or Overflowing of Tanks, Pipes, Apparatus – Covers water-related structural damage. 
10. Missile Testing Operations – Damage from testing site mishaps. 
11. Leakage from Automatic Sprinkler Installations – Covers accidental water damage, not maintenance defects. 
12. Bush Fire – Covers fire spread in shrubs or bushes, not forest fires.

The 12 Perils of Standard Fire Insurance Policy – Explained

A fire insurance policy is a contract between the policyholder and the insurance company to indemnify the insured for the financial losses suffered due to the destruction or damage of the property/goods caused by the fire. All the movable and immovable properties like buildings, plants & machinery, equipment & accessories, stocks, and other contents are covered by a standard fire insurance policy. Following are the 12 perils of the standard fire insurance policy:

1) Perils of Fire:

Damage caused to the insured property/goods due to fire, a fire insurance policy covers it. However, this policy will not cover the property/goods against:

• Damage or destruction caused due to its own fermentation,
• Any damage or destruction caused due to natural heating
• Damage or destruction caused due to spontaneous combustion.
• Damage or destruction caused due to any heating or drying process.
• Burning of the insured property due to orders issued by the Public Authority.

2) Standard Fire Insurance against Lightning Insurance:

Fire or any other damage caused to the property due to a peril like lightning is covered by the fire insurance policy. Striking of lightning can cause cracks in the building; such damage is also covered by this insurance policy.

3) Explosion/Implosion:

This policy protects against the loss caused due to explosion and implosion. A vessel can explode when its inside pressure reaches or is more than the atmospheric pressure outside. Whereas, an implosion occurs when the external pressure is more than the internal pressure. Both these phenomena can result in a fire. However, the fire insurance policy does not cover the loss, destruction, or damage caused to:

• Boilers
• Economizers or other vessels
• Machinery, apparatus, or their contents generating steam

The policy also does not cover the damage or destruction caused by centrifugal forces.

4) Aircraft Damage:

It covers the loss or damage caused by Aircraft, and other aerial or space devices.

5) Riot, Strike, Malicious Damage insurance:

The fire insurance policy covers the loss, visible physical damage, or destruction to the property caused by external violent means. Riot, strike, and malicious damage are caused with an intention of causing disturbance to the public peace.

Read More: Type of useful covers you can add to your Fire Insurance Policy

6) Standard Fire insurance for Storm, Cyclone, Typhoon, and Flood:

The violent destruction caused to the property or goods due to the above-mentioned perils is covered by the fire insurance policy. However, the policy does not cover earthquakes, volcanic eruptions, or other perils of nature under the standard peril list. The insured must ask the insurance company for additional cover to get protection against the same.

7) Impact Damage:

The fire insurance policy covers the damage or destruction caused to the insured property due to direct impact/contact by any rail/road vehicles or animals. However, it is important that such vehicles or animals are not owned by the insured, any occupier of the premises, or the employees in the course of their employment.

8) Subsidence and Landslide including Rockslide:

Subsidence means the sinking of the area on which the property is located, and landslide means the collapse of the mass of the earth from a mountain or a cliff.

Fire insurance covers the loss, destruction, or damage directly caused by the subsidence of part of the site on which the property stands or landslide and rock slide. However, it does not cover damage or destruction caused to the property due to:

• Demolition, repair, or structural alterations of the property or groundwork or excavations
• Coastal or river erosion
• Normal cracking or settlement of new structures
• Settlement or movement of made-up ground
• Defective design or defective workmanship or use of defective materials

9) Standard Bursting and/or overflowing of water tanks, Apparatus, and Pipes:

This policy also covers the loss or damage caused to the property by water due to the above-mentioned perils like bursting and/or overflowing of water tanks, apparatus, and pipes.

Read More: What is Contribution in Fire Insurance?

10) Missile Testing Operations insurance:

This policy also covers the damage or loss to the property due to any kind of missile testing operation.

11) Leakage from Automatic Sprinkler Installations:

Damage caused due to accidental discharge of water from a leaked automatic sprinkler installation, this policy covers that as well. However, it does not cover the loss or damage caused due to:

• Repairs or alterations to the buildings
• Repairs, removal, or extension of the sprinkler installation
• Defects in construction, already known to the Insured

12) Bush Fire insurance:

The policy covers the damage caused due to the burning of bushes and jungles by fire. However, it does not cover any loss, destruction, or damage caused by the forest fire.

Case Study: 12 perils of standard fire insurance

A cloth manufacturer in Jaipur was in the business of exporting handcrafted finished goods to different parts of India. Once, a fire broke out in his factory, it burnt the majority of the exported cloth.

Fire brigade trucks rushed to the site immediately and took care of the fire. No one was injured. However, the fire caused huge damage to the property as well as the goods.

Since the owner of the cloth company had taken a fire insurance policy, he contacted his insurers immediately. The surveyor investigated the situation and reported that the cause of the fire was one of the 12 standard perils mentioned in the policy.

As the fire occurred due to the insured peril, the insurer covered all the losses of the cloth manufacturing company.

FAQ

1. What is a Standard Fire and Special Perils Policy (SFSP)?
   A Standard Fire and Special Perils Policy is an insurance product that provides financial protection against losses or damages to property caused by fire and 11 additional named perils such as floods, riots, and lightning.

2. What are the 12 perils covered under standard fire insurance?
   The 12 perils include:

1. Fire 
2. Lightning 
3. Explosion/Implosion 
4. Aircraft Damage 
5. Riot, Strike, and Malicious Damage (RSMD) 
6. Storm, Cyclone, Tempest, Typhoon, Hurricane, Flood, Inundation 
7. Impact Damage 
8. Subsidence and Landslide 
9. Bursting or Overflowing of Water Tanks, Pipes 
10. Missile Testing Operations 
11. Leakage from the Automatic Sprinkler System 
12. Bush Fire 

3. Are earthquakes covered under the Standard Fire Policy?
   No, earthquakes are not covered under the standard policy. You need to purchase an add-on (rider) for earthquake coverage.

4. What is excluded from a Standard Fire Insurance policy?
   Common exclusions include:

• War or nuclear risks 

• Willful negligence 

• Pollution or contamination 

• Electrical/mechanical breakdown 

• Theft 

• Consequential losses 

• Forest fires (unless explicitly covered) 

5. Can I customize the Standard Fire Policy with additional coverage?
   Yes. You can include optional riders such as:

• Earthquake cover 

• Terrorism cover 

• Forest fire cover 

• Architect and surveyor fees 

• Debris removal 

6. Who should buy a Standard Fire and Special Perils Policy?
   This policy is ideal for:

• Business owners 

• Factory and warehouse managers 

• Shop owners 

• Homeowners 

• Institutions and schools
  Anyone who owns physical property or valuable assets should consider this policy. 

7. What is the claim process under this policy?
   In case of damage or loss:

1. Inform your insurer immediately. 
2. Submit photos, documents, and proof of ownership/damage. 
3. Cooperate with the insurer’s surveyor for inspection. 
4. Receive a claim settlement based on policy terms. 

8. What is RSMD in fire insurance?
   RSMD stands for Riot, Strike, and Malicious Damage. It covers property damage due to violent public disturbances or intentional harm caused by a third party.

9. Is fire due to an electrical short-circuit covered?
   Yes, but only if the resulting fire causes damage. The short-circuit itself (e.g., to internal machinery or circuits) may not be covered unless included under an extension.

10. Where can I check if my fire insurance includes all 12 perils?
    You should review your policy schedule and coverage document or contact your insurance advisor or insurer to verify included perils and exclusions.

 

About The Author

Shivani

MBA Insurance and Risk

She has a passion for property insurance and a wealth of experience in the field, Shivani has been a valuable contributor to SecureNow for the past six years. As a seasoned writer, they specialize in crafting insightful articles and engaging blogs that educate and inform readers about the intricacies of property insurance. She brings a unique blend of expertise and practical knowledge to their writing, drawing from her extensive background in the insurance industry. Having worked in various capacities within the sector, she deeply understands the challenges and opportunities facing property owners and insurers alike.