Department of Management; University of Dhaka

3. Tafsir Ahmed
Md. Tuhin Hossain
Md. Najmul Hossain
Nipa Acharjee
Zannatun Tazry
Mustafa Al Maruf
18156
18143
18149
18126
18190
18157

4.  Insurance that is used to cover damage to a
property caused by fire. Fire insurance is a
specialized form of insurance beyond property
insurance, and is designed to cover the cost of
replacement, reconstruction or repair beyond
what is covered by the property insurance
policy.

5.  The real establishment of
fire insurance came only
after the Great Fire of
London in 1066. This fire
lasted for four days and
nights burning over 436
acres of ground and
destroying over 13,000
buildings was the most
disastrous fire in history
and forcibly awakened the
people to the necessity for a
form of protection against
such calamities.

6.  Fire
 Lightening
 Explosion/Implosion
 Air craft Damage
 Riot, Strike, Malicious & Terrorism Damage
 Bush Fire
 Storm, Cyclone, Hurricane, Flood etc
 Impact Damage
 Subsidence & Landslide
 Bursting/ Overflowing of Tanks & Pipes
 Missile Testing Operation

7.  War
 Invasion
 Civil war
 Revolution
 Rebellion
 Military power
 Usurped power
 Insurrection
 Mutiny
 Popular rising
 Act of enemy
 Typhoon
 Hurricane
 Tornado

8.  Explosion
 Impact by vehicle
 Articles dropped from
Aircraft
 Hail & Thunderstorm
 Earthquake
 Spontaneous
Combustion, heating
or fermentation
 Malicious Damage
 Civil Commotion
 Subterranean fire
 Subsidence &
Landslide
 Horses &Cattle
 Bursting of pipes or
apparatus

9.  Fire insurance contract may be defined as "an
agreement, whereby one party in return for a
consideration undertakes to indemnify the
other party against financial loss which the
latter may sustain by reason of certain defined
subject-matter being damaged or destroyed by
fire or other defined perils up to an agreed
amount."

10.  The party responsible to indemnify the loss is
called the insurer,
 The party who is to be indemnified is called the
insured,
 The consideration for the contract is termed 'the
premium',
 The defined subject-matter is termed 'the property
insured"
 The sum set forth in the contract is called the
assured sum, and
 The document containing the terms and conditions
of the contract is known as 'the policy.

11.  Any loss caused by fire lighted purposively is
not a loss by fire if it was intentional. However,
the property burned accidentally in an
ordinary fire, such as domestic fire, the loss is
covered even if the fire remains under control.
 When a fire was purposively lighted but
became out of control at a later stage is taken
under the definition of fire. The object of fire
insurance is to indemnify the insured against
accidental loss by fire.

12.  Features of General Contract
• Proposal
• Acceptance
• Commencement of risk
• Cover note

13.  Insurable interest
 Principle of Good Faith
 Principle of indemnity
 Subrogation
 Warranties
 Proximate cause
The insurable interest is the
pecuniary interest where by the
policy holder is benefited by the
existence of the subject matter
and is prejudiced death or
damage of the subject matter.
The contract of fire insurance is one
in which the observance the utmost
good faith- by both the parties are of
vital significant. The utmost good
faith in fire insurance has two
aspects-first, disclosure of material
facts and second, preservation of the
property insured.
The doctrine of indemnity aims to
compensate the insured for a loss
sustained, and the compensation should
be such as to place him as nearly as
possible in the same pecuniary position
after the loss as he occupied
immediately before the occurrence. The
insured cannot claim anything in excess
of the amount required to recoup the
actual loss sustained.
The doctrine of Subrogation refers to
the right of the insurer to stand in the
place of the insured, after settlement
of claim, in so far as the insured’s
right of recovery from a third party
due to whose negligence the loss may
happened.
There are certain conditions and
promises in the insurance contract,
which are called warranties. On
breach of warranties the insurer
become free from his liability.
Therefore the insured must have to
fulfill the conditions and promises
during the insurance contract.
Proximate cause means the active
efficient cause that sets in motion a
train of events which brings about a
result , without intervention of any
force started and working actively
from a new an independent source.

14.  Valued policy
 Unvalued policy
 Specific policy
 Average policy
 Floating policy
 Stock declaration policy
 Loss of profit policy
 Standard fire policy
 Reinstatement policy
 Schedule Policy

15. This is a type of fire insurance policy where the value
of the subject-matter of insurance is agreed upon at the
time of making the contract. The insurer is liable to pay
the amount specified or valued irrespective of the
amount of loss caused due to fire. In this policy the
principles of indemnity has no application. The insurer
pays a fixed sum and does not indemnify for the losses.
Valued policy is taken for those goods whose value
becomes difficult to calculate in case of loss by fire. This
type of policies are suitable for insuring works of art,
jewelry and paintings where the value of the damaged
articles becomes difficult to measure.

16.  Valuable policy is a type of policy where the
amount of loss is not valued at the time of
undertaking contract of insurance. It is
determined at the time and place of loss on the
basis of market value of the property. It is
generally based on the basis of principle of
indemnity.

17.  A specific policy is a type of policy in which the
property is insured for a specific sum
irrespective of its value. The value of the whole
subject matter is immaterial and as such it
becomes a under insurance policy. For
example, if a property is insured for Rs. 10000
though its actual value is Rs. 20000. In the
event of loss to property, not more than Rs.
10000 can be recovered.

18.  It is a type of policy where the average clause is
inserted. Under this policy the indemnity is
determined on the basis of the value of the
property insured. In average policy under
insurance contracts are penalized. If a policy is
taken for Rs. 10000 against a real value of the
property Rs. 50000. The loss is 800. The claim
for the loss will be restricted to the
proportionate of sum assured to the actual
value of the property.

19.  Floating policy is taken out for those goods
which are frequently changing in a warehouse.
This policy can be taken on those goods which
are lying on different localities or go downs
Since quantity of goods lying in the warehouse
or at different places fluctuate from time to
time, it becomes difficult for the owner to take
a specific policy. Floating policies are suitable
to those traders or products whose raw-
materials or merchandise are lying at different
localities or go downs.

20.  It is a type of fire policy where all types of risks
like fire, burglary, riot, explosion and strikes
are covered. This policy is otherwise called as
all in one policy or all Insurance policy. Since
this type of policy covers a wide range of
perils, these are very popular in England.

21.  The actual process of rating consists of three
steps:
 Classification,
 Discrimination and
 Fixing rates or schedule rating.

22. Different premium rates are fixed for each class.
These classifications do not hold good for a long
time because of varied nature of risk. Now the
risks are classified into various classes according to
factors affecting fire risk.
 Construction or Structure
 Occupancy
 Nature of Flooring
 Height
 Floor and wall opening
 Exposure
 Lighting, Heating and Power

23.  The differentiation of the rates for individual
risks in a particular class is known as
discrimination. Each additional feature of risk
is charged extra premium. The better types of
risks are encouraged and attracted by the
insurer. Lesser premium is charged where fire
extinguishing appliances or fire-resisting
construction are present.

24.  It is a plan by which hazards with respect to
any particular risk are measured. It is defined
as," an empirical standard for the measurement
of relative quantity of fire hazard.

25.  Moral hazard
 Legal frameworks
 Regulatory bodies and processes
 Competition
 Skills and training
 Market initiatives
 Bad faith
 Disputes over the amount of coverage
 Disputes about the extent of coverage available
 Improper or wrongful claim denials
 Adverse selection
 Fire protection expensive

26. For the Year 2010

27.  This insurance does not cover:
1. Loss by theft during or after the occurrence of a fire.
2. Loss or damage to property occasioned by its own
fermentation natural heating or spontaneous
combustion or by its undergoing any heating or drying
processes.
3. Loss of damage occasioned by or through of in
consequence of;
 The burning of property by order of any public
authority
 Subterranean fire.

28.  The insurance does not cover any loss or
damage occasioned by or through or in
consequence directly or indirectly of any
of the following occurrences, namely
 Earthquake
 Typhoon
 War, invasion
 Mutiny, riot, military or popular rising.

31.  After knowing the brief history, types, perils
associated, advantages, barriers and
precautions of fire insurance we conclude that
There is no way to face the risks of fire or to
completely eliminate the factors of fire but we
can be saved from the damages associated from
fire through insurance. Fire insurance is a key
to cover losses caused by fire. It cannot bring
back your dear ones but try to overcome or to
fill the spaces in the life of the heirs.