Fire Insurance
- Fire Package Insurance:
It is same as Fire & Allied Perils Insurance. But it is specially designed to offer such insurance to the interested buyer at a cost effective way. For this package insurance, six (06) different perils including ‘Fire’ have to be taken and insured value should not be less than Tk. 20 crore for each business/project/ manufacturing plant.
- Industrial All Risks Insurance (IAR):
Industrial All Risks Insurance is an improved version of Fire & Allied Perils Insurance, is specially designed to offer more risks coverage at a relatively low premium rate. To qualify for this insurance, asset value for insurance/sum insured should be not less than Tk. 50 crore.
- Fire Declaration Insurance:
It is simply a Fire Insurance or Fire & Allied Perils Insurance with a separate “Declaration Clause”. It means, when a Fire Insurance or Fire & Allied Perils Insurance is issued with a separate “Declaration Clause”, it becomes a “Declaration” based insurance. As per “Fire Tariff” use of which mandatory here in Bangladesh, general rules and regulations for issuing “Declaration” basis are as follows:
- Declaration policies should not be issued to cover stocks in-process, stocks in process departments or Retail Stock.
- In respect of Declaration Policies containing more than one specified location, separate sums insured and separate declarations should be stipulated in respect of each location.
- No declaration policy should be issued for a sum insured which is less than –
(a) Tk.10 lacs in the case of General Merchandise including Yarn, Textiles and jute Finished goods.
(b) Tk.30 lacs in the case of Cotton, Cotton Seeds, Jute, Tea or Wool.
The main advantage of such Declaration based Insurance is that Insured initially pays provisional premium which is 75% of 100% Annual Premium. This is adjusted at the end of the annual period of the policy subject to insured’s written declaration of stock at an agreed interval; commonly on monthly basis.
Insured pays additional premium or receives refund premium as per outcome of the adjustment done in view of relevant conditions of the “Declaration Clause”
- Insurance Policy:
Insurance Policy is an evidence of insurance contract. This insurance contract is made between the Insured/Policy-holder and Insurance Company. Subject to the terms & conditions of the policy, the insurance company indemnifies the Insured/Policyholder so that property damaged by insured event can be restored to its former position. Insurance Company provides this insurance coverage in exchange of money which is called ‘premium’ for certain period; usually one (01) year.
Why Fire Insurance is Important?
- Fire Insurance protects against loss or damage of insured asset(s) caused by fire &/or lightning.
- Fire Insurance helps to maximize insured’s assets while there is a loss by the event insured against. Loss/damage of assets for instance; damage caused to an Office Building, Club, Restaurant, Dwelling House, Factory Building, furnishings, Machinery, Stock of different kinds, Cash (money), Jewelry etc. due to fire.
- It helps continuity of a business.
- Fire Insurance:
Fire insurance is a legally enforceable contract between a party called ‘Insured’ and the insurance company called ‘Insurer’. Under the terms & conditions of the contract, insurance company ensures the Insured in exchange of premium that the Insured will be indemnified for loss or damage to the insured due to fire &/or lightning.
Following insurance policies are available under fire insurance class of business.
- Fire & Allied Perils Insurance:
Fire with covering more risks with an Additional premium is called Fire & Allied insurance. Additional Risk coverage like as (R&SD, Cyclone, Flood & explosion etc.)
Power Plant & Operational
Package Insurance:
- Property All Risks Cover (Property Damage):
- The following two more risks can be covered with additional premium.
- Business Interruption:
Covers loss of Revenue, additional expenditure incurred for avoiding or minimizing loss and interest charges payable on loans raised due to an interruption or interference of insured business following loss or damage to insured property if indemnifiable under property damage section of the policy.
- Cost of Insurance:
- Sample of premium calculation:
- Premium Rate:
Fire Premium rate is taken from the Fire Tariff. Premium rate depends on Risk Coverage and Nature of risk as well.
Premium: Sum Insured (Insured Value) x
Premium Rate (Depends on mainly risk coverage)
xxxxx
(+) VAT (Premium x 15%)
xxxxx
Total Payable Amount
xxxxx
Fire Insurance:
