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Financial advisory
RES5Financial Advisory Services✓CGI — Commercial General Insurance
Fire and commercial property insurance indemnifies a business for physical loss of or damage to its buildings, plant, stock and contents caused by fire and other specified perils, and it can be broadened from a basic fire policy into a wider 'special perils' or all-risks / industrial-all-risks form, with the amount recoverable governed by how the sum insured is fixed (reinstatement or indemnity) and disciplined by the condition of average against under-insurance.
8 sections~5 min read
Fire and commercial property insurance is a MATERIAL DAMAGE cover: it responds to physical loss of, or damage to, tangible property at a specified commercial location. Its purpose is to protect a business's fixed and current assets so that a fire or similar event does not destroy the capital tied up in its premises and operations.
The property insured is described in the schedule and is typically grouped into items so each can carry its own sum insured:
The cover is one of INDEMNITY for direct physical damage only. It does NOT by itself pay for the loss of profit, increased cost of working or continuing overheads that follow when the business is interrupted — that consequential (financial) loss is the subject of a separate BUSINESS INTERRUPTION / consequential loss policy, which usually requires an underlying material damage policy to be in force and to have paid.
The traditional STANDARD FIRE POLICY is the historical foundation of property insurance and covers a narrow set of core perils. In its classic form it insures loss or damage caused by:
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The word FIRE has a specific insurance meaning: there must be actual IGNITION (a flame or glow), and the fire must be FORTUITOUS / ACCIDENTAL rather than deliberately caused by the insured. Damage from heat, scorching or smouldering WITHOUT ignition — for example an item overheating or being placed too near a flame — is not 'fire' damage. Once there is a hostile fire, resulting damage from smoke, heat, and from water or other means used to EXTINGUISH the fire, is generally treated as fire damage under the doctrine of proximate cause.
Because this basic scope is narrow, most commercial buyers do not buy the bare fire policy alone; they extend it with SPECIAL / ADDITIONAL PERILS, or buy a wider packaged or all-risks form, so that the everyday causes of loss a business actually faces are picked up.