Checklist to buy fire insurance
On February 25, 2014, a fire broke out in the basement of Gautam Polymers, destroying stock worth crores. The company had two active insurance policies, ₹10 crore coverage for stocks and ₹6 crore for plant, machinery, and accessories. Multiple reports, including those from the Fire Brigade and Police, confirmed the cause as an electrical short circuit. Thanks to the fire insurance policies in place, Gautam Polymers was able to file a comprehensive claim with Oriental Insurance Co. Ltd., submitting all necessary documents for verification. (Source)
There are a few key things you should keep in mind before buying fire insurance:
- Coverage amount – Ensure it covers building, machinery, stock, and accessories.
- Types of risks covered – Look for protection against electrical short circuits, accidental fires, and natural disasters.
- Exclusions – Understand what’s not covered, like negligence or specific high-risk items.
- Claim process – Check documentation requirements and claim settlement timelines.
Add-ons – Consider business interruption cover to protect against loss of income.
In this blog, we’ll break down each key factor so you know exactly what to check before buying fire insurance and protecting your legacy.
What is fire insurance?
Fire insurance is a type of business insurance that covers financial losses caused by fire due to lightning, explosion, implosion, aircraft damage, and certain natural disasters. With Fire insurance you can cover:
- Building structure: including walls, ceilings, and fixed installations.
- Office contents: such as furniture, equipment, computers, and inventory.
- Loss of income: if operations are disrupted due to fire damage.
Why fire insurance matters for offices
1. Financial protection and risk mitigation
A single fire can cause damages running into lakhs or even crores, destroying property, equipment, and inventory in minutes. Fire insurance cushions businesses against these losses, covering damage from fire, smoke, heat, and even water or chemicals used during firefighting. Without it, many businesses face the grim reality of shutting down due to the cost of repairs and replacements.
2. Comprehensive asset coverage
Today, In most office startups in India, “assets” include high-value items like computers, servers, specialized machinery, air-conditioning units, office furniture, custom-made interiors, and even important physical records. Fire insurance protects not only the building structure but also these essential assets that keep your business running. Some policies even allow you to cover multiple office locations under a single plan, making it easier to safeguard everything without juggling multiple policies.
3. Business continuity and income protection
After a fire, operations can come to a halt, which leads to lost revenue and mounting fixed costs like rent and salaries.
Fire insurance policies with business interruption coverage step in to help with lost profits and fund temporary business relocations. This help businesses recover quicker from the their losses, and helps keep their customer relationships and marketing reputation intact.
4. Compliance and legal safeguards
In many Indian jurisdictions, fire insurance is mandatory for corporate offices or any commercial buildings. Having fire insurance coverage helps in building confidence with clients, partners or investors that business is safe in your hands.
5. Protection against different kinds of fire
Today’s fire insurance often includes coverage for related risks such as lightning, explosions, short circuits, natural disasters, riots, and even liability if neighboring properties are affected. This comprehensive protection is especially important for office buildings with many offices. .
What is a fire risk assessment?
A fire risk assessment is a review of your workplace to find anything that could cause a fire, how likely it is to happen, and how severe the damage could be if it does. It helps in spotting hazards and understanding the risks, deciding if your current safety measures are enough, and identifying where improvements are needed.
Simply put, fire risk = likelihood of a fire × severity of the fire’s consequences. The severity includes the potential loss of life, the spread of fire, and property damage.
What is the purpose of a fire risk assessment?
The main goal of a fire risk assessment is to protect both people and property. A thorough assessment will identify hazards and people at risk, recommend improvements, create a written record (required for workplaces with five or more employees), and be reviewed regularly to reflect changes in the building, work processes, or staffing.
Why fire risk assessment is essential before buying fire insurance
Buying fire insurance without first doing a fire risk assessment is like locking the front door but leaving the windows wide open, it gives a false sense of security. You need to fire risk assessment before buying fire insurance because insurance companies use this information—either through their own surveys or your provided records—to determine whether to offer you coverage, how much to charge, and what conditions to include. If your workplace has clear, documented evidence of proactive fire safety measures, you are more likely to get:
- Lower premiums
- Fewer coverage exclusions
- Faster claim approvals in the event of a fire
A thorough fire risk assessment protects you in three ways:
- first, it reduces the actual chances of a fire and.
- it strengthens your insurance position.
- And third, It forces you to identify hazards, evaluate how each could impact your business, and implement fixes before something happens.
Fire risk assessment checklist for offices
1. Identify Fire Hazards
- Sources of Ignition: Inspect electrical wiring, office equipment, overloaded sockets, kitchen appliances, heaters, candles, and designated smoking areas.
- Combustible Materials: Note items like paper stacks, cardboard boxes, furniture, carpets, curtains, cleaning chemicals, and any flammable liquids.
- Obstructed Exits: Check that escape routes and corridors are clear—no storage boxes, clutter, or locked exit doors.
- Faulty Fire Equipment: Ensure fire extinguishers, alarms, and sprinkler systems are present, working, and not overdue for servicing.
2. Identify People at Risk
- General Occupants: Employees, visitors, and contractors, especially those in higher-risk areas like kitchens or server rooms.
- Vulnerable Individuals: Those with disabilities, elderly staff, pregnant employees, or anyone unfamiliar with the premises.
- Isolated Workers: Employees working late or alone who may need extra help during an evacuation.
3. Evaluate, Remove, and Reduce Risks
- Control Ignition Sources: Fix faulty wiring, avoid open flames, and maintain electrical appliances.
- Limit Combustibles: Store paper and chemicals safely, reduce clutter, and choose fire-retardant materials where possible.
- Improve Detection: Install smoke detectors, alarms, and emergency lighting—and test them regularly.
- Make Escapes Easier: Keep pathways clear, mark exits clearly, and ensure doors open easily.
- Maintain Equipment: Service fire extinguishers, sprinklers, and alarms as per the schedule.
- Plan for Vulnerable Staff: Have tailored evacuation plans and assign “evacuation buddies” if required.
4. Record, Plan, and Train
- Keep Records: Maintain written risk assessments, equipment service logs, and incident reports.
- Create an Emergency Plan: Include evacuation routes, assembly points, contact numbers, and fire warden details.
- Train Staff: Conduct regular fire safety training and drills. Show employees how to use extinguishers and respond to alarms.
- Assign Roles: Appoint trained fire marshals who can guide evacuations.
5. Review and Update Regularly
- Annual Checks: Reassess risks at least once a year, after an incident, or when the office layout changes.
- Update for Changes: Account for new staff, renovations, or equipment.
- Test Readiness: Run unannounced drills to check evacuation times and spot bottlenecks.
- Learn and Improve: Encourage feedback from staff and review “near misses” to strengthen safety measures.
Conclusion
By identifying vulnerabilities in your premises, you’re not only reducing the chance of an incident but also ensuring that your policy truly reflects the value of your assets, from your infrastructure to your high-end equipment and important documents. For businesses, this means less guesswork, fewer surprises at claim time, and peace of mind knowing that protection is both adequate and relevant. In short, the better you understand your risks, the better your fire insurance will work for you when it matters most.
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