ABSTRACT

Fire insurance is a contract whereby the person, seeking insurance protection, enters into a
contract with the insurer to indemnify him against the loss of property, accidental or incidental to
fire/lightning, explosion and so on. This policy is designed to insure one’s property and other
items from loss occurring due to complete or partial damage by fire. The fire policy does not
cover only the loss/damage of fire but also due to other perils like lightening, storms, strike,
aircraft damage etc. Therefore the fire policy in India, is known as Standard Fire and Special
Perils Policy. Though these risks are covered yet exceptions are always there. For the growth of
the Indian economy every business organization should insure its assets. The term 'fire' is used in
its popular and literal sense and means a fire which has 'broken bounds'. 'Fire' which is used for
domestic or manufacturing purposes is not fire as long as it is confined within usual limits. In the
fire insurance policy, 'Fire' means the production of light and heat by combustion or burning.
Thus, fire, must result from actual ignition and the resulting loss must be proximately caused by
such ignition. The phrase 'loss or damage by fire' also includes the loss or damage caused by
efforts to extinguish fire.

INTRODUCTION

The term ‘insurance’ has been used in describing the fund accumulated to meet uncertain
losses. It is evident that in a static state, all producers who are exposed to risk must
accumulate such funds.

The term “fire” in fire insurance is interpreted in the literal and popular sense. There is
fire when something burns. In other words fire means visible flames or actual ignition.
Simmering/ smoldering is not considered fire in Fire Insurance. Fire produces heat and
light but either of them alone is not fire. Lightening is not a fire but if it ignites
something, the damage may be due to fire.

Under section 2(6A)1 Insurance Act 1938, the fire insurance business is defined as
follows: “Fire insurance business means the business of effecting, otherwise than
independently to some other class of business, contracts of insurance against loss by or
incidental to fire or other occurrence customarily included among the risks insured
against in fire insurance policies”.
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Insurance act Insurance Act 1938

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Afire insurance is a contract under which the insurer in return for a consideration
(premium) agrees to indemnify the insured for the financial loss which the latter may
suffer due to destruction of or damage to property or goods, caused by fire, during a
specified period. The contract specifies the maximum amount, agreed to by the parties at
the time of the contract, which the insured can claim in case of loss. This amount is not,
however, the measure of the loss 2. The loss can be ascertained only after the fire has
occurred. The insurer is liable to make good the actual amount of loss not exceeding the
maximum amount fixed under the policy.

ORIGIN OF FIRE INSURANCE & INTERNATIONAL SCENARIO

Insurance in its modern form originated in Lombardy, Italy, in 1182 A.D., with Marine
Insurance. Attempts to organize fire insurance in the modern form were made only after
the Great Fire of London in 1666.

In 1666, the great fire broke out in London, which continued for four days and nights and
spread over 436 acres of territory. This was an alarming and appalling calamity. Over 85
per cent of the buildings in London were destroyed, while the property loss is estimated
to have been about ten million pounds. In the absence of insurance, this was a blow from
which London was slow to recover, as is shown by the fact that in 1673, seven years
later, about one thousand buildings were yet to be replaced 3. Relatively, this London fire
was the greatest in the history of the world. Immediately after the fire, various plans for
the protection of individuals against loss by fire began to be devised. In 1667, the first
regular system for insuring buildings against fire began.

A London builder, Dr. Nicholas Barbon, started the Fire Office in 1680. This company,
for a given consideration, engaged to pay the assured the amount of indemnity declared
in the policy, or contract, should his house or building be destroyed by fire, or to repair it,
should it be only ‘damnified’— i.e., damaged. No liability, it was noted, rested upon the
assured beyond the payment of the premium. Other Offices soon followed but their
operations were confined to the insurance of buildings. In 1681, a few years after this

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first company was established, an attempt was made by the city of London to establish an
insurance account, or business, and funds and property were put aside and dedicated for
that purpose. In 1708, an office was established to insure goods and merchandise. By the
beginning of the 19th century, there were no less than 32 fire offices. These offices
recognised the need for joint action to deal with common problems.

In 1832, the London offices formed one common fire brigade and action was initiated for
the collection of loss experience on a common basis for charging agreed rates. This led to
the formulation of various tariffs such as the Liverpool Warehouse Tariff, Cotton Mills
Tariff, etc. Eventually, in 1858, an Association of English and Scottish Fire Offices was
formed which came to be known in 1868, as the Fire Offices Committee.

The Industrial Revolution brought about a great increase in material wealth in the form of
factories, machinery and merchandise, which had to be protected by fire insurance. With
the introduction of complex manufacturing processes in industry, the system of fire
insurance rating became complicated. The market also introduced the loss of profits
policy in 1900, followed by insurances against special perils. Insurances on re-
instatement value basis were introduced during the inter-war period. On the technical
side, the Fire Offices Committee established a Testing Station for research purposes, in
1935. In 1946, this was converted into the Joint Fire Research Organisation.

 A number of attempted fire insurance schemes came to nothing, but in

1681, economist Nicholas Barbon and eleven associates established the first fire
insurance company, the "Insurance Office for Houses"4, at the back of the Royal
Exchange to insure brick and frame homes. Initially, 5,000 homes were insured by
Barbon's Insurance Office. In the wake of this first successful venture, many similar
companies were founded in the following decades. Initially, each company employed its
own fire department to prevent and minimize the damage from conflagrations on
properties insured by them. They also began to issue 'Fire insurance marks' to their
customers; these would be displayed prominently above the main door to the property in
order to aid positive identification. One such notable company was the Hand in Hand Fire
& Life Insurance Society, founded in 1696 at Tom's Coffee House in St Martin's
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Lane in London. The first property insurance company still extant was founded in 1710
as the 'Sun Fire Office' now, through many mergers and acquisitions, the RSA Insurance
Group5.

In Colonial America, Benjamin Franklin helped to popularize and make standard the

practice of insurance, particularly Property insurance to spread the risk of loss from fire,
in the form of perpetual insurance. In 1752, he founded the Philadelphia Contribution
ship for the Insurance of Houses from Loss by Fire. Franklin's company refused to insure
certain buildings, such as wooden houses, where the risk of fire was too great.

PRACTICE OF FIRE INSURANCE IN INDIA

The need for fire insurance arises out of three basic facts:

• The existence of material property susceptible to damage or destruction by fire or other

peril

• The fact that material property has intrinsic value measurable in terms of money
recognised by the economic beliefs of society.

• The fact that the occurrence of a fire will result not only in loss of or damage to
material property but also other consequential losses such as loss of production causing
loss of profits.

Laws Governing Fire Insurance

There is no statutory enactment governing fire insurance, as in the case of marine

insurance which is regulated by the Indian Marine Insurance Act, 1963. The Indian
Insurance Act, 1938 mainly dealt with regulation of insurance business as such and not
with any general or special principles of the law relating fire of other insurance contracts.
So is the General Insurance Business (Nationalization)Act, 1872, in the absence of any
legislative enactment on the subject , the courts in India have, in dealing with the topic of
fire insurance, have relied so far on judicial decisions of the courts and opinions of
English jurists.
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Section 2(6A) in The Insurance Act, 1938

“fire insurance business” means the business of effecting, otherwise than incidentally to
some other class of insurance business, contracts of insurance against loss by or
incidental to fire or other occurrence customarily included among the risks insured
against in fire insurance policies6.

In determining the value of property damaged or destroyed by fire for the purpose of
indemnity under a policy of fire insurance, it was the value of the property to the insured,
which was to be measured. Prima facie that value was measured by reference of the
market value of the property before and after the loss. However, such method of
assessment was not applicable in cases where the market value did not represent the real
value of the property to the insured, as where the property was used by the insured as a
home or, for carrying business. In such cases, the measure of indemnity was the cost of
reinstatement.

SUBJECT MATTER OF FIRE INSURANCE:

Subject matter of fire insurance may be of any kind of movable and immovable property
having pecuniary value. The property intended to be insured must be properly described.
As per fire insurance, it is governed by Tariff; the following are the examples of insurable
property such as:

 Buildings ‰
 Electrical installation in buildings ‰
 Contents of buildings such as machinery, plant and equipments, accessories, etc.
‰
 Goods (raw materials, in–process, semi–finished, finished, packing materials,
etc.) in factories, godowns etc.
 Goods in the open ‰
 Furniture, fixture and fittings ‰
 Pipelines (including contents) located inside or outside the compound, etc.

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The owner of abovementioned properties can insure against fire damage through fire
insurance policy which provides for it.

In India, under fire insurance policy, in addition to fire, other perils are also included and
the policy is known as “Standard Fire and Allied Perils Policy”. The perils specified in
the fire policy are7:

i. Fire: The term fire in a fire insurance policy is interpreted in the literal and
popular sense. Fire causes when something burns. It has been held that there is no
fire unless there is ignition.
ii. Lightning: Any lightning due to cloud burst may damage the property and the
same will be covered under the fire policy.
iii. Explosion / Implosion: Sudden change in the temperature in any plant &
machinery or exposure to atmospheric pressure may result into loss and the same
will be covered under fire policy.
iv. Aircraft Damage: Any damage to the property due to any droppings by aircraft or
by itself will also be covered under the fire policy.
v. Riot, Strike and Malicious Damage (RSMD): Any damage to the property due to
public or strike by employees or malicious damage (intentional damage) by any
person will be covered under this policy.
vi. Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation
(STFI): The property damage due to any of these storms and flood will also be
covered under this policy. The meaning of these perils lies in different intensity of
the storms. Flood not only means the leakage of water through river but also
accumulation of water due to heavy rains in the premises.
vii. Impact Damage: Damage to the property due to impact by any Rail / Road vehicle
or animal by direct contact, but not belonging to or owned by the Insured or any
occupier of the premises or their employees while acting in the course of their
employment.

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viii. Subsidence and Landslide including Rock Slide Destruction or damage caused by
Subsidence of part of the site on which the property stands or Land slide / Rock
slide.
ix. Bursting and/or overflowing of Water Tanks, Apparatus and Pipes: If due to
bursting or overflowing of water from the water tanks installed in the premises of
the policyholder any damage or loss to the property of the policyholder is caused,
it will be covered under this policy.
x. Missile Testing Operations: Any loss or damage due to missile testing by the
Govt. or otherwise will be covered under this policy
xi. Leakage from Automatic Sprinkler Installations : In most of the organizations as a
fire protection measure, automatic sprinkler system is installed. If due to non–
usage of the sprinkler system or otherwise it starts leaking and damages the
property, then it will be covered under the fire insurance policy.
xii. Bush Fire: It means fire spread from the bushes (small fire) but will not include
forest fire.

THE BASIC PRINCIPLES THAT GOVERN FIRE INSURANCE

1. UTMOST GOOD FAITH

In insurance contracts, the legal doctrine of utmost good faith applies. The insured has the
duty to disclose all material facts, which have a bearing on the insurance. A breach of this
duty may make the contract void or voidable. The duty of disclosure continues
throughout the policy period. The fire proposal form also includes a declaration by the
insured saying that the statements declared by him are true, and that they can form the
basis of the insurance contract. These principles also expect the insured to act as if he is
uninsured all the time, and takes care and safeguards his assets from the perils. Following
a loss, he is then expected to salvage as much of the property as possible.

2. INSURABLE INTEREST –

The requirement of insurable interest gives legal validity to insurance contracts and
distinguishes them from wagers. It may be defined as the legal right to insure, where the
right arises out of a pecuniary relationship between the insured and the subject matters of
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insurance. The destruction or damage to the latter involves the insured in financial loss.
Absolute legal ownership is a clear example of insurable interest. For e.g., a bank or a
financial institution which has advanced money on the security of a property, has
insurable interest in that property. In Fire insurance policy, the insurable interest should
exist at the time of taking the policy, throughout its currency period and also at the time
of loss/claim. Fire insurance policies are personal contracts, Â so if the property is sold or
transferred, the policy is not transferred automatically.

3. INDEMNITY

The objective of the principle is to place the insured, as far as possible, in the same
financial position after a loss, as that occupied by him, immediately before the loss. In
simple words, the principle of indemnity means the insured is indemnified only to the
extent of his loss, no profit or undue benefit is extended. The indemnity is subject to the
sum insured and other terms of the policy. The sum insured can be fixed on the basis of
Reinstatement Value or Market Value. The term 'Market value' means, for insurance
purposes, the present cost of construction of similar buildings, after deducting
depreciation based on age, usage, maintenance etc. Similarly for plant and machinery,
market value is arrived at by deducting suitable depreciation for age, usage, wear and tear
etc, from the current replacement costs..

4. SUBROGATION

The principal of subrogation is the corollary of the principle of indemnity. If the loss
suffered by the insured can be recovered from third parties who are responsible for the
loss, the insured's rights of recovery are transferred or subrogated to the insurers when
they indemnify the loss.

5. CONTRIBUTION

The principle of contribution, which is also a corollary of the principle of indemnity,

provides that if the same property is insured under more than one policy, the insured can

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recover a rate able proportion of the loss under each policy. Under no circumstances can
he recover more than his loss, and make a profit.

6. PROXIMATE CAUSE

A cause which immediately precedes and produces the effect, as distinguished from the
remote, mediate, or predisposing cause. An act from which a loss or injury results as a
natural, direct, uninterrupted consequence and without which the loss or injury would not
have occurred. It is the primary cause of a loss or injury. It is not necessarily the closest
cause in time or space or the first event that sets in motion a sequence of events leading to
an injury

FEATURES OF FIRE INSURANCE:

1) Offer & Acceptance: It is a prerequisite to any contract. Similarly, the property will
be insured under fire insurance policy after the offer is accepted by the insurance
company. Example: A proposal submitted to the insurance company along with premium
on 1/1/2011 but the insurance company accepted the proposal on 15/1/2011. The risk is
covered from 15/1/2011 and any loss prior to this date will not be covered under fire
insurance.

2) Payment of Premium: An owner must ensure that the premium is paid well in
advance so that the risk can be covered. If the payment is made through cheque and it is
dishonored then the coverage of risk will not exist. It is as per section 64VB of Insurance
Act 1938.

(3) Contract of Indemnity: Fire insurance is a contract of indemnity and the insurance
company is liable only to the extent of actual loss suffered. If there is no loss, there is no
liability even if there is fire. Example: If the property is insured for Rs 20 lakhs under fire
insurance and it is damaged by fire to the extent of Rs. 10 lakhs, then the insurance
company will not pay more than Rs. 10 lakhs.

4) Utmost Good Faith: The property owner must disclose all the relevant information to
the insurance company while insuring their property. The fire policy shall be voidable in
the event of misrepresentation, mis-description or non-disclosure of any material

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information. Example: The use of building must be disclosed i.e whether the building is
used for residential use or manufacturing use, as in both the cases the premium rate will
vary.

5) Insurable Interest: The fire insurance will be valid only if the person who is insuring
the property is owner or having insurable interest in that property. Such interest must
exist at the time when loss occurs.

6) Contribution: If a person insured his property with two insurance companies, then in
case of fire loss both the insurance companies will pay the loss to the owner
proportionately. Example: A property worth Rs. 50 lakhs was insured with two Insurance
companies A and B. In case of loss, both insurance companies will contribute equally.

7) Period of fire Insurance: The period of insurance is to be defined in the policy.

Generally the period of fire insurance will not exceed by one year. The period can be less
than one year but not more than one year except for the residential houses which can be
insured for the period exceeding one year also.

8) Deliberate Act: If a property is damaged or loss occurs due to fire because of

deliberate act of the owner, then that damage or loss will not be covered under the policy.

9) Claims: To get the compensation under fire insurance the owner must inform the
insurance company immediately so that the insurance company can take necessary steps
to determine the loss.

TYPES OF FIRE INSURANCE POLICIES8:-

i. Specific policy:- is a policy which covers the loss up to a specific amount which
is less than the real value of the property. The actual value of the property is not
taken into consideration while determining the amount of indemnity. Such a
policy is not subject to 'average clause'. 'Average clause' is a clause by which the
insured is called upon to bear a portion of the loss himself. The main object of the
clause is to check under-insurance, to encourage full insurance and to impress

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 upon the property owners to get their property accurately valued before insurance.
If the insurer has inserted an average clause, the policy is known as "Average
Policy".
ii. Comprehensive policy:- is also known as 'all in one' policy and covers risks like
fire, theft, burglary, third party risks, etc. It may also cover loss of profits during
the period the business remains closed due to fire.
iii. Valued policy:- is a departure from the contract of indemnity. Under it the
insured can recover a fixed amount agreed to at the time the policy is taken. In the
event of loss, only the fixed amount is payable, irrespective of the actual amount
of loss.
iv. Floating policy:- is a policy which covers loss by fire caused to property
belonging to the same person but located at different places under a single sum
and for one premium. Such a policy might cover goods lying in two warehouses
at two different locations. This policy is always subject to 'average clause'.
v. Replacement or Re-instatement policy: - is a policy in which the insurer inserts
a re-instatement clause, whereby he undertakes to pay the cost of replacement of
the property damaged or destroyed by fire. Thus, he may re-instate or replace the
property instead of paying cash. In such a policy, the insurer has to select one of
the two alternatives, i.e. either to pay cash or to replace the property, and
afterwards he cannot change to the other option.

LOSSES NOT COVERED BY A FIRE INSURANCE POLICY

 loss due to fire caused by earthquake, invasion, act of foreign enemy, hostilities or
war, civil strife, riots, mutiny, martial law, military rising or rebellion or
insurrection.
 loss caused by subterranean (underground) fire.
 loss caused by burning of property by order of any public authority.
 loss by theft during or after the occurrence of fire.
 loss or damage to property caused by its own fermentation or spontaneous
combustion e.g. exploding of a bomb due to an inherent defect in it.

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  loss or damage by lightening or explosion is not covered unless these cause actual
ignition which spread into fire.

CONDITIONS FOR CLAIM

The loss must be caused by actual fire or ignition and not just by high temperature.

 The proximate cause of loss should be fire.

 The loss or damage must relate to subject matter of policy.
 The ignition must be either of the goods or of the premises where goods are kept.
 The fire must be accidental, not intentional. If the fire is caused through a
malicious or deliberate act of the insured or his agents, the insurer will not be
liable for the loss.

PROCEDURE TO INSURE THE PROPERTY UNDER FIRE

INSURANCE:

For insuring any property under the fire insurance policy, the following is the procedure:
Filling of Proposal Form The fire proposal includes the following information 9:

1. Description of the property.

This would include:

 Construction of external walls and roof, number of storeys.

 Occupation of each portion of the building.
 Presence of hazardous goods.
 Process of manufacture.
 The sums proposed for insurance.
 The period of insurance.
 History of previous losses.
 Insurance history - whether previously other insurers had declined the risk, etc.

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 2. Inspection of the property:

In case of property of any business organization, whether manufacturing or other type of

organization, a risk inspection report is submitted by the insurer’s engineers. The
engineers submit in their report the nature of risk involved in the factory/ manufacturing
unit.

3. Payment of Premium:

Based on the proposal form and the inspection report of the engineers, the insurance
company will submit the premium rates to the property owner and if these rates are
acceptable to him then he should pay the amount to the insurance company. It is also a
legal requirement under section 64VB of Insurance Act 1938 that the premium is paid in
advance in full to the insurance company.

4. Issue of Cover note/ Policy document:

On receipt of a completed proposal form and / or inspection report, the cover note is
issued, pending preparation of the policy document. The cover note is an unstamped
document issued to provide evidence of cover till the time the policy is issued. The cover
note provides insurance against specified perils on the usual terms and conditions of the
company’s policy10.

The printed policy form provides for a schedule in which the individual details of the
contract are typed. The items are similar to those in the Cover Note but with more
detailed information.

After issuing the policy document, it is likely that there may be some changes in the
nature of property or sum insured may increase or decrease. In this case, these changes
can be incorporated by way of endorsements which are issued to record changes such as
alteration in risk, increase or decrease of sum insured, etc.

LANDMARK JUDGMENTS
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  CONSUMER EDUCATION & RESEARCH SOCIETY VS. IFFCO-TOKIO
GENERAL INSURANCE, NATIONAL CONSUMER DISPUTES
REDRESSAL COMMISSION 11

Ahmedabad-based Consumer Education & Research Society; Bileshwar Khand Udyog

Sahakari paid a premium of Rs 38,520 for a Rs 2.25 lakh fire cover from IFFCO-Tokio
General Insurance for a stock of molasses. While the policy was still being validated, a
portion of the stock was burnt due to spontaneous combustion. The insurance company
rejected the claim on the grounds that the stock was not burnt by an actual fire. The
National Consumer Disputes Redressal Commission ruled in the favour of the insured,
stating that this amounted to deficiency of service on the insurance companys part and it
was liable to pay damages amounting to Rs 1.14 lakh along with 10 per cent interest per
year from 2003 onwards. Henceforth, insurance companies are liable to pay for the
damages to stock occurring due to fermentation, natural heating or spontaneous
combustion under a fire policy. Fire damage need not be caused by fire alone

 ORIENTAL INSURANCE COMPANY V. MAHENDRA

CONSTRUCTION12

The Insured had purchased a hydraulic excavator machine in 2004, which was insured
with New India Assurance Company Limited ("previous Insurer") from 15 November
2004 to 14 November 2005. The excavator caught fire on 12 April 2005, for which a
claim was lodged and settled by the previous Insurer. The excavator was under repair till
10 October 2006, post which it was insured with the Insurer from 11 October 2006 to 10
October 2007. The excavator again caught fire on 15 October 2006 and a claim was
lodged with the Insurer. The Insurer repudiated the claim on 25 November 2008 on the
ground that all material facts which were required to be disclosed by the Insured for the
Insurer to assess the risk profile of the good insured, had not been disclosed. More
specifically, the stand of the Insurer was that the proposal form has contained a specific
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Consumer education & research society vs. Iffco-tokio general insurance, national consumer disputes
redressal commission, O.P. NO.52 OF 2004
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Oriental Insurance Company vs Mahendra Construction, AIR 2019 SC 2182

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question with regard to the details of the claims lodged in the preceding three years. The
same had not been answered and the Insured had instead enclosed the insurance policy it
had with the previous insurer, with the proposal form.

A complaint was instituted before the SDRC which allowed the claim of the Insured. The
NCDRC in appeal, concurred with the findings of the SDRC and held that as the previous
insurance policy was attached with the proposal form, the Insurer could have made
himself aware of any prior claims by undertaking an ordinary due diligence and/or
conducting an enquiry with the previous Insurer.

The Apex Court dismissing the findings of both the SDRC and NCDRC held that the law
of insurance is governed by the principle of utmost good faith, which imposes a duty of
complete disclosure on the Insured with regard to material facts 13. Holding that the
foregoing suppression went to the root of the contract of insurance and validated the
grounds of repudiation, the Supreme Court reversed and set aside the decision of the
NCDRC.

DRAWBACKS & SUGGESTIONS

Lack of statutory enactment governing fire insurance: Fire accidents are very much
unexpected but heavily destructive. Hence, having fire insurance is very much essential.
Fire Insurance policy covers your home‘s structure, or fixing and fittings, against hazard
and provides you with the financial resources to replace what you have lost, so that you
can get back to normal as soon as possible. Fire insurance provides the security for home,
stock, furniture, business buildings, etc; it provides the cost of replacement of properties
and assets, which gets damaged due to the fire accident. Therefore, there is growing need
for a statutory enactment in regard to this matter.

Expanding scope of Fire Insurance: The fire policy does not cover only the
loss/damage of fire but also due to other perils like lightening, storms, strike, aircraft
damage etc. Therefore the fire policy in India, is known as Standard Fire and Special

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Perils Policy. Though these risks are covered yet exceptions are always there. For the
growth of the Indian economy every business organization should insure its assets.

If the value of stocks is fluctuating substantially during the year then the same should be
insured under declaration fire insurance policy. To protect the interest of the financial
institutes the agreed bank clause may be included.

Local Authorities Clause Reinstatement Value Policy: may be extended to cover such
additional cost of reinstatement of the destroyed or damaged property as may be incurred
solely by reason of the necessity to comply with the Building or other Regulations under
any Act of Parliament or bye-laws of any Municipal or Local Authority.

CONCLUSION

Fire insurance is a form of property insurance which protects people from the costs
incurred by fires. When a structure is covered by fire insurance, the insurance policy will
pay out in the event that the structure is damaged or destroyed by fire. Some standard
property insurance policies include fire insurance in their coverage, while in other cases,
fire insurance may need to be purchased separately. Property owners should check with
their insurance companies if they are not sure whether or not fire insurance is part of their
policies, and if fire insurance is not included, it should be purchased. Depending on the
terms of the policy, fire insurance may pay out the actual value of the property after the
fire, or it may pay out the replacement value. In a replacement value policy, the structure
will be replaced in the event of a fire, whether it has depreciated or appreciated: in other
words, if homeowners purchase a home and the value increases, as long as it is covered
by a replacement value policy, the insurance company will replace it. An actual cash
value policy covers the structure, less depreciation. Most accounts come with coverage
limits which may need to be adjusted as property values rise and fall.

The industry, trade and commercial articles have been developing and diversifying at a
faster rate in India. Along with the growth of industrial and commercial articles, the
infrastructural fields like transport, communication, finance, advertising, stock marketing
and so on, have also been developing continuously, so as to cope with the pace of
economic development. The importance of foreign trade also has been very much for a
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developing country like India. All these developments in various fields brought in much
risks and uncertainties in business activities. Insurance is the only field that provides
security, against business risks. The role of the fire insurance has been increasing day-by-
day as a means against destruction or damage of business property caused by fire.

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