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Fire & Property All Risk - Overview

Product Codes

  • 1010 - Fire and Allied Perils (Material Damage)
  • 1020 - Fire and Allied Perils (Business Interruption)
  • 1030 - Property All Risk (PAR)
  • 1040 - Property All Risk (Business Interruption)

Coverage Basis

Fire and Allied Perils (1010/1020)

Named Perils Coverage: - Fire and lightning - Explosion - Aircraft damage - Impact damage - Riot and strike - Malicious damage - Storm or tempest - Flood - Earthquake - Burst pipes

Each peril must be selected individually. Only the perils selected are covered.

Property All Risk (1030/1040)

All Risks Coverage: - Covers all risks of physical loss or damage - Except specifically excluded perils - Includes theft and accidental damage - Broader coverage than Fire policy

Key Features

Sum Insured Based

Coverage based on property value: - Building value - Contents value - Stock value - Machinery value - Total property valuation

Valuation Basis

Reinstatement Value: - New for old replacement - No depreciation applied - Higher premiums - Most common for buildings

Indemnity Value: - Actual value after depreciation - Lower premiums - Common for contents/stock

Market Value: - Current market price - For investment properties

Coverage Components

Material Damage Coverage (1010/1030)

What's Covered: - Buildings and structures - Contents and furniture - Stock and inventory - Machinery and equipment - Tenant improvements - Fixtures and fittings

Common Extensions: - Debris removal (10% of claim) - Professional fees (5% of sum insured) - Public authorities compliance costs - Loss of rent - Alternative accommodation

Common Exclusions: - War and terrorism (unless specifically added) - Nuclear risks - Willful acts - Consequential losses - Normal wear and tear - Gradual deterioration

Business Interruption Coverage (1020/1040)

What's Covered: - Gross profit loss - Standing charges continuation - Payroll expenses - Rent continuation - Additional cost of working - Auditors fees

Indemnity Period: - Typically 12 months - Can be extended to 24 or 36 months - Period during which business recovers

Product Variations

1010 - Fire and Allied Perils

Typical Properties: - Residential villas and apartments - Commercial buildings - Warehouses - Factories - Retail premises

Sum Insured Range: AED 50,000 - AED 500,000,000+

1030 - Property All Risk (PAR)

Typical Properties: - High-value residential properties - Commercial complexes - Industrial facilities - Multi-location risks

Sum Insured Range: AED 100,000 - AED 500,000,000+

1020/1040 - Business Interruption

Usage: Add-on to material damage policies

Basis: Annual gross profit or turnover

Property Type Classification

Residential

  • Villas
  • Apartments
  • Townhouses
  • Housing compounds

Commercial

  • Office buildings
  • Shopping centers
  • Hotels
  • Restaurants

Industrial

  • Factories
  • Manufacturing plants
  • Processing facilities
  • Workshops

Warehouse/Storage

  • Warehouses
  • Cold storage
  • Distribution centers
  • Logistics facilities

Mandatory Requirements

Required Fields

  • Property Address - Location of insured property
  • Property Type - Occupancy classification
  • Sum Insured - Total property value (mandatory)
  • Occupancy Type - Residential, commercial, industrial
  • Construction Type - Building construction materials
  • Policy Period - Start and end dates

Important Fields

  • Building Age - Year of construction
  • Fire Protection - Sprinklers, alarms, extinguishers
  • Security Features - CCTV, guards, access control
  • Previous Losses - Claims history
  • Mortgage Details - Bank interest if applicable

Optional Fields

  • Number of Floors - Building height
  • Floor Area - Square meters
  • Nearest Fire Station - Distance in km
  • Special Hazards - Chemical storage, LPG, etc.

Next Steps

Conditions & Exclusions

Standard Exclusions

What's NOT Covered:

  1. War & Terrorism (Standard Exclusion)
  2. War, invasion, acts of foreign enemies
  3. Civil war, rebellion, insurrection

  4. Terrorism and sabotage

  5. Nuclear Risks

  6. Nuclear reaction, radiation, contamination

  7. Radioactive materials

  8. Consequential Losses (Unless BI Section Taken)

  9. Loss of profit or business interruption
  10. Loss of market

  11. Delay in operations

  12. Wear & Tear

  13. Gradual deterioration
  14. Rust, corrosion, oxidation

  15. Normal wear and tear

  16. Electrical/Mechanical Breakdown

  17. Internal breakdown (unless causing fire)
  18. Short circuit (unless causing fire)

  19. Equipment failure

  20. Intentional Acts

  21. Deliberate damage by insured
  22. Arson by insured
  23. Fraud

Property Types We DON'T Insure

Declined Property Types: - Thatched or grass-roofed structures - Makeshift/temporary structures - Properties without walls - Condemned buildings - Properties earmarked for demolition

High-Risk Properties (Special Terms): - Timber/wood factories - Chemical storage facilities - Petrol pumps and fuel storage - Fireworks manufacturing/storage - Furniture manufacturing

Occupancy Declinations

Residential Properties: - Usually accepted (standard terms) - Rental properties need disclosure - Vacation homes acceptable

Commercial Properties: - Most accepted with proper risk assessment - High-fire-risk businesses: loading or decline

Industrial Properties: - Manufacturing: Risk-specific underwriting - Warehousing: Acceptable with good housekeeping - Hazardous: Usually declined

Geographic Limitations

Standard Coverage: - UAE territory only - Specific location must be declared

Extended Coverage: - Usually location-specific - Multi-location needs separate declaration

High-Risk Locations (Declined/Loaded): - Flood-prone areas - Near hazardous facilities - High-crime areas - Earthquake zones

Sum Insured Conditions

Minimum SI: - Residential: AED 100,000 - Commercial: AED 200,000

Maximum SI (Standard): - Residential villas: AED 50,000,000 - Commercial: AED 100,000,000 - Above needs facultative reinsurance

Valuation Requirements: - >AED 5,000,000: Professional valuation needed - Must be replacement/reinstatement value - Not market value

Construction Requirements

Acceptable Construction: - RCC (Reinforced Concrete) - preferred - Steel frame with brick/block walls - Concrete blocks - Modern fire-resistant materials

Declined Construction: - Pure wooden structures - Bamboo or grass - Mud or adobe (unless special consideration) - Temporary/portacabin structures

Loading Applied: - Part-wooden structures - Mixed construction - Old buildings (>30 years without renovation)

Fire Protection Requirements

Mandatory (High Values >AED 2M): - Fire extinguishers (properly maintained) - Smoke detectors/fire alarms - Clear escape routes - Fire safety signage

Highly Recommended: - Sprinkler systems (for commercial) - Fire hydrants nearby - 24/7 monitoring - Regular fire drills

Declined if: - No fire protection at all - Poor housekeeping - Blocked fire exits - Expired fire equipment

Underwriting Declinations

We Will NOT Quote if: - More than 3 fire claims in last 5 years - Unoccupied property >60 days (unless disclosed) - Illegal occupancy or unauthorized use - No valid building permits - Structural damage or poor maintenance - Property used for illegal activities

Specific Exclusions by Product

1010/1020 - Fire Insurance: - Only named perils covered - All risks NOT covered (need PAR) - Theft not covered (unless due to fire) - Water damage not covered (unless firefighting)

1030/1040 - Property All Risk: - Broader coverage but still has exclusions - Mysterious disappearance excluded - Inventory shortage excluded - Gradual seepage excluded

Business Interruption Conditions (1020/1040)

Requirements: - Must have material damage cover first - Cannot be standalone - Financial records mandatory

Excluded Losses: - Losses without physical damage - Utilities failure (unless property damaged) - Strikes and labor issues - Supplier/customer default

Indemnity Period: - Maximum 12-24 months typically - Longer periods need special approval

Special Conditions

Average Clause: - Applies if under-insured - Claims paid pro-rata - Example: Insured 50% of value → pay 50% of loss

Basis of Settlement: - Reinstatement value (rebuild cost) - NOT market value - Deduction for wear and tear (unless new-for-old cover)

Excess/Deductible: - Residential: AED 500 - AED 5,000 - Commercial: AED 1,000 - AED 50,000 - Higher excess for poor construction/high risk

Mortgagee Interest

Bank/Mortgage Requirements: - Mortgagee name must be noted - Claims payment to mortgagee (as per loss payee) - Policy cannot be cancelled without bank notification - Bank has insurable interest

Unoccupancy Conditions

Residential: - Unoccupied >60 days: Must notify - Additional premium or exclusions apply - Increased theft risk

Commercial: - Must be occupied/operational - Vacant buildings: Declined or heavy loading - Seasonal businesses: Need disclosure

Adjacent Property

Neighboring Risks: - Nearby hazardous occupancies: Loading - Petrol pump next door: Declined or loading - Industrial area: Risk assessment needed

Critical for Portal: - Validate construction type before quote - Check occupancy and usage - Flag unoccupied properties - Verify sum insured adequacy - Confirm fire protection for high values - Check for mortgagee interest