Irdai set to introduce standard products for fire, allied peril risks

The Insurance Regulatory and Development Authority of India (Irdai) has decided to introduce standard products covering the risk of fire and allied perils.

General insurers that offer fire and allied perils policies have to mandatorily introduce the same from April 1, 2021, replacing the Standard Fire and Special Perils (SFSP) policy — provided for in the erstwhile All India Fire Tariff (AIFT) 2001. 

First is the Bharat Griha Raksha, which will cover home building and home content, and provide coverage against fire, natural catastrophes, riots, acts of terrorism, and other risks within seven days of occurrence. Not only will it provide coverage against the home building, it will also provide for damages to home contents for up to 20 per cent of the sum insured (maximum Rs 10 lakh). There will be two optional covers with this product — insurance for valuable contents, and coverage against personal accident of the insured along with spouse.

Second is the Bharat Sookshma Udyam Suraksha, a standard product for enterprises for which the total value at risk is up to Rs 5 crore. This will provide coverage for buildings, plant, machinery, stocks, and other assets; with Rs 5 crore being the total value at risk across insurable asset classes at one location.

Bharat Laghu Udyam Suraksha, the third, will cover enterprises for which the total value of risk across insurable asset classes at a single location exceeds Rs 5 crore, but not Rs 50 crore at the policy commencement date.