Fire Insurance – What Makes It Important?

No matter how cautious a business organisation runs, mishaps and accidents like fire happen. Due to its unpredictable nature, even places confirming to fire safety standards sometimes face heavy destructions in terms of loss of property and life. Fire insurance, therefore, becomes essential for your business. Below is the , as stated by the Economics Times:

Standard Fire & Special Peril Policy: As quoted by the Economics Times, “Fire and special perils policy is an insurance contract that safeguards the insured against unforeseen contingency caused by accidental fire, lightning, explosion/implosion, destruction or damage caused by aerial devices, man-made perils in the form of riots, strike etc., natural calamities like storm, cyclone, flood etc., damage caused by impact by a rail or a road vehicle, damage caused by landslide or subsidence, peril caused by pollution and contamination, bursting and/or overflowing of water tanks, apparatus and pipes, missile testing operations, leakage from automatic sprinkler installations and bushfire.

Following are few points that make it necessary to buy fire insurance policy for any business:

Magnitude of loss of property: Even if fire accident happens at a single location, it has the potential to damage properties in and around its presence. Smoke and fire can destroy properties; and water or means used to extinguish or control such fires also damages the business property. knowing about Fire insurance can protect businesses from such losses and also cover damages to goods and stocks on business premises.

Financial Losses: Businesses rely on physical locations and structures to conduct their operations. Fires can destroy such places that can lead to financial losses. Rebuilding or restarting a business after such accidents becomes easy by buying a policy.

Insurance against natural events: Since fires can be caused by natural events such as earthquakes and cyclones, a policy can cover losses incurred by natural calamities that lead to a fire.

Insurance for equipment: Expensive machinery, furniture, electrical fittings, etc.,  can be insured by buying fire insurance policy thus minimizing the loss suffered in case of a calamity.

Keeping the powerful and destructive nature of fire in mind, precautions must be taken to avoid such a calamity. However, insuring a business against fire and its allied perils can protect from losses to a business and its operation without affecting the flow of money to the organization in the long run.

As an endnote, - Fire insurances are valid for a year and the premium is calculated according to different aspects/ essentials to be insured by that policy. Since no two companies offer the same kind of policy, shop around to get an idea of various insurance schemes.

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