Sookshma Udyam Suraksha Policy

IRDAI License Number: IRDAI/INT/ISNP/2022/250

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Sookshma Udyam Suraksha Policy

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Introduction

Who can take this Policy?

Coverage

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Basis of Sum lnsured

Exclusions

This insurance policy protect your property like buildings, plant and machinery, stocks and other installation against losses or damage caused by fire, flood, storm, earthquake, terrorism, vandalism, theft, smoke, hail, the impact of snow and ice, lightning, accidental damage and breakdown and more. This policy cover the cost to replace or repair the property by providing monetary compensation.

Any individual, firm, organization, or institution can apply for the fire insurance policy. The only need is that you have an insurable interest in the asset either in your custody or possession.

The policy covers following perils:

Fire
Lightning
Explosion / Implosion
Aircraft damage
Riot, Strike, Malicious damage (hereinafter called RSMD Perils)
Storm, Tempest, Flood, Inundation, Hurricane, Cyclone, Typhoon and Tornado.
Impact by any Rail/ Road vehicle or animal
Subsidence / Landslide including rockslide.
Bursting and / or overflowing of water tanks, apparatus.
Leakage form Automatic Sprinkler Installation.
Missile Testing Operation.
Pollution or contamination resulting from any of the above perils
Any insured peril resulting from pollution and contamination.

Expenses Covered:

Architects
Surveyors and Consulting Engineer's Fees (up to 3% of claim amount)
Debris Removal (up to 1% of claim amount)

In addition to perils/expenses covered under standard cover, the proposer can opt following perils/ expenses on payment of additional premium:

Deterioration of Stocks in Cold Storage premises due to power failure following damage due to an insured peril
Forest Fire
Impact Damage due to Insured's own vehicles, Fork lifts and the like and articles dropped therefrom
Spontaneous Combustion
Omission to insure additions, alterations or extensions
Earthquake (Fire and Shock)
Spoilage material damage cover
Leakage and contamination cover
Temporary removal of stocks
Terrorism
Loss of rent
Insurance of additional expenses of rent for alternative accommodation
Start up Expenses

For Stock : Market Value

Other than Stock : Reinstatement Value

Loss or damage due to own fermentation, natural heating or spontaneous combustion of stocks
Burning by order of any public authority
Explosion of boilers or steam generating vessels and machinery subject to centrifugal force by its own explosion or implosion
Burglary, housebreaking, theft, larceny in any malicious act
Impact damage by rail/road vehicle or animal belonging to the insured
Destruction or damage caused by forest fire
Loss or damage caused by war or warlike situations, Nuclear risks
Loss or damage by pollution or contamination except due to insured peril
Loss or damage to electrical machine/apparatus from which fire originated
Consequential losses

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Important Points to remember while Buying the Policy

Adequate Sum Insured - To Avoid Underinsurance

Actual value of property should be taken. If the value taken was below than the actual value then underinsurance will be applicable.

Ensure that assets should be covered under the right entity/company

Fundamental principle of insurance for insurable interest should be followed.

Risk Location/s should be properly mentioned

Proper list of risk locations (as annexure) should be the part of policy to avoid any ambiguity.

Downloads

Proposal Form

Policy Wordings

Claim Form

Key Documents

General Claim
Intimation Format

Immediate Action Client
Should Take

Indicative General Documents
for Settlement of Claims

Peril Based Documents Required
for Settlement

Our Insurance Partners

Claim Case Study - 1

Situation

Underinsurance

Challenge

Claims amount get reduced proportionately In relation to Sum Insured/ Value at Risk

Solution

Properties or machineries should be insured for market value or replacement value to be considered as on the date of loss (Not on the date of insurance) to avoid average clause

Advisory/Conclusion

Adequate Sum Insured to be taken after Valuation

Claim Case Study - 2

Situation

In a manufacturing plant short circuiting in a heavy machine due to which the claim was denied by the Insurance company

Challenge

Asset in which the short circuiting has originated is not covered as per the domain clause provision under policy terms and conditions.

Solution

Exact smaller part from which the shortcircuiting had occurred was identified. This resulted in the increase in the claim amount because the cost of the smaller part was only disallowed.

Advisory/Conclusion

Critical machines to be covered under both Fire and Machinery Break Down Policy so that this exclusion is not applicable and there is a resultant increase in the claim amount.

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FAQ's

PREMIUM

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CLAIMS

OTHERS

How premium is charged under Fire Policy?

Premium rates vary according to occupancy. Minimum rate to charged is as per IIB Circular.
What are the various parameters of Premium rating under Fire Policy?

Premium rates are charged based upon risk occupancy, Location of Risk & other factors such as STFI & Terrorism.
Can machines or other items purchased during the course of the policy be added in this policy?

Yes, any assets purchased during the course of a policy year can be added in the policy through an endorsement.
Is STFI and Earthquake cover compulsory in Fire Policy?

No STFI and EQ are not compulsory cover and it can be removed subject to the policy rate is higher than Nat CAT Rate.

Is terrorism inbuild cover under Fire Insurance policy?

No, terrorism is an add-on cover for which additional premium is charged.
What is covered under Standard Fire & Special perils policy?
- Fire
- Lightning
- Explosion / implosion
- Aircraft damage
- Riot, strike, and malicious damage
- Storm, cyclone, typhoon, tempest, hurricane, and tornado
- Flood and inundation
- Impact damage
- Subsidence and landslide including rockslide demolition
- Construction, structural alterations, or repair of any property
- Ground works or excavations
- Bursting and/or overflowing of water tanks, apparatus, and pipes
- Missile testing operations
- Leakage from automatic sprinkler installation excluding loss, destruction, or damage
- Bush fire
- Fees of architects, surveyors, and consulting engineers up to 3 per cent of claim amount
- Debris removal up to 1 per cent of claim amount
Is burglary covered under Fire Policy?

No, Burglary is not covered under fire policy. A separate policy of Burglary is taken to cover this peril.
What is the premium rate charged for Add-ons?

If terrorism is not opted then all add-ons are free upto a certain limit.

How claim can be settled on MV or RIV Basis?

In case of settlement of claim on MV basis, depreciation shall be levied on the assets depending on the age of building/machinery. Under this method, the insured is not compensated adequately. In case of settlement on RIV Basis, the policy pays cost of replacement subject to limit of sum insured and depreciation is not applicable. This is a precondition to claim under RIV mode of settlement that assets should be fully replaced.
If I insure a property for a higher sum insured, will I get a higher claim amount?

No. When you apply for a fire insurance policy, the current market value of the property or the Reinstatement value of the property, depending upon the basis of the Sum Insured, should be accurately calculated for arriving at the correct amount to be insured. The compensation payable when a covered loss or damage occurs shall be based on whether or not the property has been insured adequately. If the amount insured is excessive, it will mean overpayment of unnecessary premium; if the amount insured is inadequate you will receive amounts in proportion to its actual value only.

Are there any excess deducted at the time of claim under fire policy?

Sum Insured Slab	Excess
Upto 10 Cr. Above 10 Cr. and upto 100 Cr. Above 100 Cr. and upto 1500 Cr. Above 1500 Cr. and upto 2500 Cr. Above 2500 Cr.	5% of claim subject to a minimum of Rs. 10,000/- 5% of claim subject to a minimum of Rs. 25,000/- 5% of claim subject to a minimum of Rs. 5,00,000/- 5% of claim subject to a minimum of Rs. 25,00,000/- 5% of claim subject to a minimum of Rs.50,00,000/-

What are the documents required in order to settle a claim due to fire peril?
The documents required to settle the claim due to fire peril are as follows:
- Fire Department Report
- Purchase Invoices
- Filled Claim form
- Claim bill with invoices etc.

What are the documents required to buy Fire insurance?

The proposer should have an interest in the assets proposed for insurance that is the proposer stands to lose financially in the event of loss or damage to such assets. The proposer submits fully filled Proposal Form disclosing all details including any material facts about the risk.
What are the different types of property Insurance Policies?

Standard Fire & Special Perils policy covers most of the perils the property is exposed to like fire, lightening, riots, flood, storm and Earthquake. Loss of assets due to burglary and theft can be covered under a Burglary Insurance Policy. Valuables can be covered under All Risks policy and house owners and shopkeepers can buy package covers.
How sum insured of assets under Dwellings, Commercial/Industrial premises is fixed?

Sum insured can be fixed on Market value (MV) or Reinstatement value (RIV) Basis.
Can insured request for mid-term cancellation of policy?

Yes, refund of premium on short period basis is allowed. In event of cancellation by the insurer the premium is refunded on pro rata basis.
Can a policy be cancelled after settlement of a claim?

Yes, but no refund of premium is allowed after cancellation of policy.