Standard Fire and Special Perils Policy
Twelve named perils. If the cause of the loss is not on the list, there is no claim.
The Standard Fire and Special Perils policy, always called the SFSP, is the named-perils property policy that Indian non-life insurers have written for decades. It pays for physical loss or damage to buildings, plant and machinery, furniture and stocks caused by one of twelve listed perils. If the cause is not on the list, there is no claim. That single idea answers half the questions IC-11 asks on it.
The wording began life as the tariff policy. The tariffs and the standard wordings have since been de-notified, but IRDAI's 2024 master circular on general insurance tells insurers not to withdraw or refuse to offer the erstwhile tariff products, so the SFSP is still sold and still the template every fire underwriter learns first.
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The Twelve Named Perils
The order below follows a typical SFSP wording. Most perils carry their own small exclusion, and those exclusions are favourite MCQ material.
| Peril | What it leaves out |
|---|---|
| I. Fire | Goods damaged by their own fermentation, natural heating or spontaneous combustion; goods undergoing a heating or drying process; burning by order of a public authority |
| II. Lightning | Nothing stated, but damage to electrical machinery from its own short circuit is a general exclusion |
| III. Explosion/Implosion | Industrial boilers and steam vessels damaged by their own explosion; damage from centrifugal force |
| IV. Aircraft damage | Damage from pressure waves (sonic booms) |
| V. Riot, Strike and Malicious Damage (RSMD) | Loss from stoppage of work, confiscation or requisition by government, unlawful occupation, and theft |
| VI. Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation (STFI) | Damage resulting from earthquake or other convulsions of nature, unless earthquake is added |
| VII. Impact damage | Impact by a vehicle or animal belonging to the insured, an occupier or their employees |
| VIII. Subsidence and landslide including rock slide | Normal settlement of new structures, made-up ground, coastal or river erosion, defective design, construction and excavation work |
| IX. Bursting or overflowing of water tanks, apparatus and pipes | No peril-specific exclusion |
| X. Missile testing operations | No peril-specific exclusion |
| XI. Leakage from automatic sprinkler installations | Repairs or alterations to the building, work on the sprinkler system, construction defects known to the insured |
| XII. Bush fire | Forest fire |
General Exclusions Worth Memorising
Beyond the peril-level exclusions, a typical wording excludes these for every peril:
- check_circleThe excess stated in the schedule, applied per event. The wording says the excess does not apply to dwellings owned by individuals.
- check_circleWar and kindred perils, nuclear risks, and pollution unless it results from (or causes) an insured peril.
- check_circleBullion, unset precious stones, curios and works of art above ₹10,000, documents, money, securities and computer records, unless expressly covered.
- check_circleStocks in cold storage spoiled by change of temperature, and spoilage from interruption of a process.
- check_circleArchitects', surveyors' and consulting engineers' fees above 3% of the claim, and debris removal above 1% of the claim.
- check_circleLoss of earnings, loss of market and any consequential loss. That gap is what fire loss of profits cover fills.
- check_circleEarthquake, volcanic eruption and other convulsions of nature, and terrorism. Both can be added back.
- check_circleProperty moved to another location, except machinery temporarily removed for repair or cleaning for up to 60 days.
General Conditions That Get Tested
These are the clauses from the same wording that turn up as "within how many days" questions.
- Fall of building
- All cover ceases seven days after a building or part of it falls or is displaced, unless an insured peril caused the fall. The insurer may agree to continue on revised terms if told within those seven days.
- Alteration and unoccupancy
- Cover on the affected property ceases, unless the insurer endorses its sanction, if the trade changes so as to increase the risk, if the building stays unoccupied for more than 30 days, or if interest passes other than by will or operation of law.
- Claim notice
- Notice forthwith, and a written claim with particulars within 15 days of the loss or such further time as the insurer allows.
- Twelve-month bar
- If the insurer disclaims liability and no suit is filed within 12 months of the disclaimer, the claim is deemed abandoned.
- Average
- If the property is worth more than the sum insured, the insured is his own insurer for the difference and bears a rateable share of the loss, item by item.
- Reinstatement of sum insured
- After a claim the sum insured is restored automatically; pro-rata premium on the claim amount is deducted from the settlement unless the insured opts out.
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Who Still Buys the SFSP
Homes and smaller businesses are now usually covered by the Bharat standard products, which add earthquake, forest fire and other perils as standard and soften average. The SFSP remains the base for mid-sized and large commercial and industrial risks, typically with add-on covers, a fire loss of profits policy alongside, and sometimes a reinstatement value clause. A textile processor in Surat with ₹80 crore of plant and stock, for example, will usually sit outside the Bharat products' range and be written on the SFSP or an all-risks policy.
The policy covers physical damage only. Theft is not a peril on its own, and electrical burn-out of a motor that does not spread to fire is excluded. Burglary and machinery breakdown need their own policies.
How IC-11 Tests This
Expect "which of these is a named peril" (aircraft damage, missile testing) set against tempting non-perils (theft, earthquake, terrorism), the exclusion attached to a given peril (forest fire under bush fire, own vehicle under impact), and the day counts from the conditions. The usual trap is assuming earthquake is part of STFI. It is not; it is an add-on.
FAQs
What perils are covered under the Standard Fire and Special Perils policy?expand_more
Twelve: fire; lightning; explosion or implosion; aircraft damage; riot, strike and malicious damage; storm, cyclone, flood and related perils (STFI); impact damage; subsidence and landslide; bursting or overflowing of tanks and pipes; missile testing; sprinkler leakage; and bush fire.
Is earthquake covered under a standard fire policy?expand_more
Not under the base SFSP. Earthquake, volcanic eruption and other convulsions of nature are a general exclusion and are added back as an add-on cover for extra premium. The Bharat products include earthquake as standard.
Does a fire policy cover loss of profit after a fire?expand_more
No. The SFSP excludes loss of earnings and consequential loss. The business needs a separate fire loss of profits (business interruption) policy.
What happens to a fire policy if the building is left unoccupied?expand_more
In a typical SFSP wording, cover on the affected property ceases if the building stays unoccupied for more than 30 days, unless the insurer has endorsed its sanction beforehand.
Next steps
- Fire Add-Onsarrow_forward
- Bharat Productsarrow_forward
- Condition of Averagearrow_forward
- Proximate cause (IC-01)arrow_forward
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