BASIC DEFINITION OF PROPERTY INSURANCE

Property insurance is a series of policies that provide either property protection coverage or liability coverage for property owners. Property insurance provides financial reimbursement to the owner or renter of a structure and its contents in case there is damage or theft—and to a person other than the owner or renter if that person is injured on the property.
Different types of property insurance covers include;

1.Fire & Special Perils Insurance
2.Industrial All Risks Insurance
3.Public Liability
4.Political Violence & Terrorism Cover
5.Plate Glass Insurance

FIRE & SPECIAL PERILS – DEFINITION & INCLUSIONS

The basic Fire policy provides indemnity against loss or damage to property described, caused by fire, lightning and explosion.
The following conditions have to be satisfied:
a)There is actual ignition of property.
b)There must be something on fire which ought not to have been on fire.
c)The fire must have occurred under accidental circumstances, so far as the insured is concerned.

Once a ‘fire’ as meant by the policy has occurred, certain other types of losses automatically come within the scope of the Fire Policy:
Damage during or immediately following a fire caused by smoke, scorching, falling walls.
Damage caused by the fire brigades in the discharge of their duties.
Damage to property incurred by exposure to weather caused as a result of removal of property from a burning building in an effort to mitigate the loss.

PERIL OF STANDARD FIRE INSURANCE COVER

The policy can be extended to cover the items below under Special perils;
1.Riots, strike, malicious damage – Covers the loss, visible physical damage or destruction to property caused by external violent means.
2.Damage by Hail, Snow, Wind, Hurricane, Tornado, Storm, Cyclone, Typhoon
3.Earthquake – Dependent on the insurance company. Can be included subject to payment of additional premium.
4.Impact Damage – Damage or destruction caused to property – building, gate, walls- caused by direct impact/contact by rail/road vehicles and/or animals. *Vehicles must not belong to the insured party or occupiers of the premises or the employees in their course of employment.
5.Aircraft and other aerial devices and articles dropped therefrom.
6.Subterranean fire – Loss or damage to property arising from fires of volcanic origin.
7.Spontaneous combustion – damage by fire to property caused by spontaneous fermentation, overheating or combustion. (Dependent on insurance company)
8.Damage caused by flooding – overflowing or deviation of water from their drainage channels (as long as water source not from taps, pipes, valve etc. unless proven to be due to 9 or 10 below)
9.Water damage due to bursting or overflowing of water tanks, apparatus, and pipes among others.
10.Damage caused by overflowing of down pipes, gutters or bursting and overflowing of public water from a government main supply.

FIRE & SPECIAL PERILS – EXCLUSIONS
1.Loss of valuables from theft, burglary or housebreaking before or after the peril happens
2.An explosion of boilers or gases used for trading purposes
3.Earthquakes, volcanic eruptions, or occurrences of nature – not included in policy.
4.Loss or damage to property resulting from its fermentation, natural heating or spontaneous combustion (if not included in policy).
5.Consequential loss not covered in the policy – collateral damage incurred due to the damage to the equipment, property or any tangible unit.
6.The expenses incurred on surveyors’ consultant engineering, architect fees, and removal of debris after damage has been done.
7.Water damage caused by/through leaking roof (unless leakage caused by special perils).
8.Loss or damage due to ordinary wear and tear.
9.Loss or damage to property if on the happening of such loss the building was already in a damaged/defective state. This includes foundation, walls, roof, ceilings, windows, doors etc.
10.Terrorism, War & War like perils.

INDUSTRIAL ALL RISK
It Is an all-risk Policy covering a wide range of perils such as fire and allied perils, burglary, accidental damage, breakdown as well as business Interruption. To be eligible, property sum insured must be Kshs 2.5 billion and above.
Covers everything covered under fire and special perils including;
1.Material damage of the insured’s property e.g. Buildings, Plant & machinery, stocks, furniture fixtures & fittings etc.
2.Consequential losses e.g. Gross profit, wages and Auditors fees.
3.The expenses incurred on surveyors’ consultant engineering, architect fees, and removal of debris after damage has been done.
4.Loss of valuables from theft, burglary or housebreaking before or after the peril happens.

INDUSITRIAL ALL RISK – EXCLUSIONS
1.Faulty or defective design
2.Faulty materials
3.Bad workmanship
4.Gradual deterioration, deformation or distortion or wear and tear.

MACHINERY BREAKDOWN
Machinery Breakdown insurance covers cost of repairs or replacement of damaged parts as a result of unforeseen and sudden physical damages.
Coverage against internal machinery damage such as: electrical damage, centrifugal forces, lack of water, foreign bodies, failures in safety devices, overheating, impact, shock, pressure or lubrication defects.
External damages produced by:
1.Fire, explosion or lightning strike.
2.Blows, collisions, scratches or falls.
3.Atmospheric phenomena such as wind, snow, hail, rain and floods.
4.Theft and robbery.
5.Damage resulting from the mismanagement, bad workmanship or negligence of an employee due to lack of experience or expertise in the machinery.
6.Faulty design of the machine.

OTHER COVERS

PUBLIC LIABILITY
Indemnity against legal liability to third parties in respect of accidental death, bodily injury and /or illness, or loss or damage of third-party property in the course of the insured business.

POLITICAL VIOLENCE & TERRORISM COVER
It Indemnifies the insured against loss/damage to buildings & contents cause by act of terrorism, sabotage, riot & strike, malicious damage, insurrection, revolution, mutiny and war and civil war.

Plate glass insurance.
It is a cover that protects against loss of or damage or breakage to fixed plate glass/ large panes of glass such as shop windows caused by accident or misfortune of an accidental nature.
Plate Glass Perils Include:
-Fire
-Malicious damage
-Riots and Strikes
-Breakage from vehicles, animals, nature related.

Remember to read the fine print in every insurance cover policy.