Architects have to deal with the question of fire protection, Fire

Insurance and Fire Loss Assessments in two ways:

1. As project architects they are required to protect their clients interests
against the risk and damage due to fire when a building is under
construction.

2. As expert fire loss assessor in the case of an existing building which catches
fire and the building is partially or totally damaged.

ARCHITECTS RESPONSIBILITY:
Every architect who undertakes to supervise the
construction of a new building assumes responsibility for its safety during
construction. Normally the job of construction is entrusted to a contractor. In such
a case, it is the duty of project architect to ensure that, in the first place, there is a
clause relating to the fire insurance of building under construction in the written
contract between the client and the contractor. Such a contract needs to be signed
even if the client and the contractor are either related or are close friends;
otherwise, if the owner suffers due to fire, he can hold the project architect
responsible for not advising him properly. Even when the client is doing the
construction work departmentally, he needs to be advised in writing about the
need for fire insurance.
FIRE INSURANCE

Every contract document must contain a clause relating to fire
insurance. Ex. Indian Institute of Architects standard form of conditions of
contract provides Clause no.47. This clause stipulates that the civil contractor will
take out an insurance policy in the joint names of the client and the contractor
insuring the building against the risk of damage due to fire, storm, floods,
earthquake, riots, civil commotion, etc. Such insurance must cover the cost of
building under construction together with any un-fixed material lying at the site.
The contractor must keep such a policy renewed every year till the building is
virtually completed and handed over to the client. If the contractor fails to take
out such an insurance within a reasonable period, The Project Architect must
advise the client to take out such a policy and deduct the amount of premium from
the contractors bill. This clause provides that in case of occurrence of fire the
contractor will inform the insurance company, the owner, the architect and the
police about occurrence of fire as soon as practicable. He may be asked to suspend
the construction work till the police and the insurance companys agents have
inspected the damage. Only after completion of investigations the contractor will
be permitted to carry on with the work. The contractor is granted reasonable
extension of time for completing the work. The contractor is granted reasonable
extension of time for completing the work, because of such suspension.
The contractor is paid for any work that he may be asked to dismantle
and reinstate. Such work is regarded as a variation required by the Project
Architect. The job of ascertaining the actual damage caused by the fire is done
by an expert fire loss assessor. Project Architect may not consider himself to be
competent to do this job as it involves principles of valuation.
The second aspect of fire insurance dealing with existing buildings
is dealt with by an Architect who specializes as an expert Fire Loss Assessor.
Such an expert advises the owner about the Insured Value or the value of
the building for which he should insure the building. Secondly, he prepares a
compensation claim his client when the client suffers a loss due to fire.
A few technical terms dealing with fire insurance:
Policy:
It is a document which gives a brief description of the building insured and
sets out the terms and conditions of the contract between the insurance company and
the owner.
Insurer:
The insurance company which insures the building is called the insurer.
Insured:
The owner-whose building is insured is called the insured.
Sum Insured:
It is the sum for which the building is insured. It represents the depreciated
value of the building on the day it is insured. It has no relation to the market value of
the building.
Premium:
It is the amount which the owner or insured pays to the insurance company
for effecting the insurance. It depends upon the condition and type of property as also
its location, period of insurance etc.
Cover Note:
When the insurance company receives a proposal from the owner along
with the amount of premium the insurance company issues a cover note. The
purpose is to provide temporary insurance ll the proposal is formally accepted.
Period of Insurance:
It is the period during which the insurance cover is under-written by the
insurance company.
Under Insurance:
If a property is insured for a sum lesser than its depreciated value it is
regarded as under insurance.
Over Insurer:
If a property is insured for a sum greater than its depreciated value it is
regarded as under insurance.
Salvage Value:
It means the value of any serviceable material, goods or equipment. It is quite
distinct from debris.
Reinstatement Clause:
This clause states that the insurance company will have the option of
reinstating the damaged portion in nearly the same condition in which it was till the
occurrence of fire.
Risks covered in Insurance Policy:
In a normal fire policy the following risks are covered by
the insurance company. Damage due to fire, lightning, certain types of explosions,
impact due to rail or road vehicles, aircraft and space devices falling from the sky,
damage due to riots, strike, ethnic disturbance, etc.
Risks not covered:
Loss due to theft, natural process of heating and spontaneous
combustion, subterranean or underground fire, damage due to nuclear explosion or
radiation, excessive use of machinery, earthquake or volcanic eruption, typhoon,
hurricane, cyclone etc., war or war like situations and acts of terrorism. These risks
have to be insured against by a specific provision in the same policy or by obtaining
another policy. Compensation is also not paid for damage to goods belonging to
others. Gold and other ornaments, curios, paintings, rare manuscripts, antiques,,
shares, securities, stamps, coins, cheque books, and explosives must be insured
separately.
Important conditions of a typical fire insurance policy are as under:

1. There should not be any mis-description or non-disclosure of vital information
in the application form.

2. The nature of occupation or usage of the building must not be changed, for
example from residential to manufacturing.

3. The property should not remain unoccupied for more than 30 days continuously.

4. The insurance company must be informed about the change of ownership or
occupation even if it is by a will or natural inheritance.

5. The insurance can be terminated at any time by the insured by notice to the
insurance company.

6. The insured will inform the insurance company within 15 days any occurrence of
a fire and thereafter submit a claim for compensation as per guidelines.

7. Particulars of all insurances pertaining to the property must given to the insurer.

8. Insurer is not liable to pay compensation after expiry of period of insurance or if
the claim is not filed properly within 12 months of occurrence of fire.

9. Insurer can enter the property, assess the damage, investigate the cause of fire,
remove all damaged material for which compensation is paid.

10. Insurance company will not pay compensation if the claim is fraudulent.

11. Insurer will have the option to pay either compensation for the loss suffered or
reinstate the damaged portion at its own cost.

12. Insurer will pay only a proportionate share of compensation if it is established
that the property was under-insured. This clause is known as Average clause of
insurance.

13. If the property is insured with another company or companies, insurer will pay
only a proportionate share of such loss.

14. If there is a dispute between the insurer and the insured about the amount of
compensation or any other matter relating to the policy the same will be referred
to arbitration as provided in the prevailing Arbitration Act.11

Warranties by the Insured:
A normal fire policy for residential building stipulates certain warranties to
be given by the insured.

1. That the building is of sound construction and shall be maintained in a good
state of repair.

2. That all electrical fittings and fixtures will be maintained as per rules.

3. That no inflammable goods will be stored in the property.

4. That no work or process involving combustible or explosive material will be done
in the property.

5. That for certain types of occupancies or usages fire extinguishers will be installed
in the property.

6. That the goods kept in the property are for bona fide personal use and not for
trade or commerce.

7. That for certain types of occupancies or usages, internal and external fire
extinguishing appliances have been installed in the premises for which a
discount in the premium is given.
Classification of Buildings:
For the sake of fixing rates of premium. Buildings are divided into three
categories on the basis of their construction and specification. These are superior,
CLASS I and CLASS II.
Superior category includes RCC frame or load-bearing walls, with RCC roof.
The doors and windows should be preferably of mild steel but teakwood is
Permissible.

CLASS I: This category includes RCC frame structure or load-bearing masonry wall
construction in cement mortar having any type of hard roof such as RCC slab, AC
sheets or ceramic fuses. The doors and windows should preferably Be of mild steel ;
but wooden doors are permissible. Wooden floor above RCC slab is permissible.

CLASS II: Category includes any other type of construction which is not covered in
the above two category could be semi-permanent or temporary in nature. The more
combustible its nature the higher will be the premium.

In all the three categories, the value of plinth and foundation of all types of
structures is excluded from the sum insured as these are seldom affected due to
fire. If these are required to be insured for any reason, a specific mention must be
made in the policy; so that damage due to earthquake, settlement of earth, etc. can
be covered.
Procedure for claiming compensation:

The owner of property which is affected by fire must inform the concerned
insurance company about it as quickly as possible. He should convey the time and
date of fire, possible cause, whether the damage is partial or total etc. This
intimation must be followed up with a claim for compensation on a prescribed form
within two weeks of the event. A standard form issued by the insurance company
requires exhaustive and elaborate information about the actual damage, the cost of
reinstatement, value of salvage material etc. If the loss is extensive it is advisable to
retain an expert Fire-Loss Assessor who will prepare a report and provide the
information, insurance company normally requires. If there is a difference between
the claim made by the owner and the amount recommended by insurance
companys expert, it is normally settled through negotiations. Only if there is
substantial or if there is any other technical problem, then the matter is settled
through arbitration. On rare occasions, the matter may be taken to the court. Once
the insurance company pays the amount of compensation, the role of the Fire-Loss
Assessor is over.
Fire-Loss Assessors Report:
A typical format for the experts consists of the following:
1. General information such as details of property, insurance policy number, date
of damaged property etc.

2. Cause, place and date of fire if the same can be ascertained.

3. Detailed description of the damage caused by fire.

4. Detailed claim for compensation describing items affected by fire including
value of salvage goods.

5. Date and place of report.

Usually the insurance company requires two copies of report. The owner
is given a copy of the report for his information and record. The fee paid to the
expert fire loss assessor forms a part of the compensation claim.