Special perils are those perils which are excluded from the standard fire policy but the insurer can provide cover at an extra premium. However, it is becoming increasingly common to issue fire policy with all extensions incorporated thus avoiding the need to issue endorsements. The special perils may be classified into four as follows;
- Chemical perils
- Social perils
- Natural perils
- Miscellaneous perils
These are perils which originate from the nature of subject matter of insurance. i.e. its chemical in nature. Examples
- Spontaneous fermentation or self- heating
This extends cover to loss or damage to property insured caused directly by explosion. However, it excludes loss or damage to boilers, economizers, and other vessels, machinery or apparatus in which pressure is used or their contents resulting into explosion.
It excludes the insureds own boilers, machines and apparatus in which internal pressure is due for steam only. This is usually covered under a separate engineering policy. Damage caused by someone else’s steam pressure vessel is however, included.
Spontaneous Fermentation/ Self Heating
The exclusion of spontaneous fermentation or heating in standard fire policy applies only to property which itself spontaneously ferments or heats. The spreading of fire risk is insured. Proposals for spontaneous combustion insurance are not common, but the storage of some property in bulk may give rise to a request for such cover.
The insurer usually has a warranty on the policy relating to storage conditions to ensure the maintenance of a satisfactory situation but still underwriting this type of risk is delicate because;
- The type of properties commonly insured under this item are prone to self-ignition
- If the property covered self –ignites, it is very difficult to extinguish the fire
- Salvage prospects are low
- Very careful control of storage is essential
- Insurers will probably need to incur the cost of survey.
These are perils caused by the activities of human beings, the standard fire policy can be extended to cover;
- Locked out workers
- Malicious persons
- Persons taking part in labor disturbances
The aim of these extensions is to;
- Buy back the cover for damages resulting from these causes
- Buy fire or non-fire damage resulting from these causes
- Buy cover, including fire or non- fire damage resulting from these cause but with the malicious damage cover restricted to malicious persons acting on behalf of or connection with any political organization.
This extends cover to loss or damage to the property insured directly caused by malicious acts of any person, whether or not such acts are committed in the course of disturbance of the public peace.
Riot and Civil Commotion
There is riot when;
There are three or more persons assembled for a common purpose
There is execution or inception of that common purpose
There is an intent to help one another, by force if necessary against any person who may oppose them in execution of the common purpose
Force or violence is displayed in such a manner as to alarm a person of reasonable firmness or courage
This is the stage between a riot and civil war, it is the insurrection of people for a general purpose not amounting to a rebellion. there has to be an element of turbulence. The extension also covers loss caused by the action of any unlawfully constituted authority in in suppressing or attempting to suppress any such disturbances or in minimizing the consequences of any such disturbances.
The exclusion common under these perils:
- Damage arising from confiscations, requisition or destruction by order of the government or any local authority.
- Damage arising from cession of work
- Damage caused by theft or attempted theft
- Damage in respect of any building which is empty or in use
- Natural perils have their origin in nature and are generally beyond control of human being and include:
- Hail, wind hurricane, cyclone, tornado, typhoon
- Storm and flood
- Earthquake and subterranean fire
- Subsidence, ground heave and landslide
- Rain-provided that the building in respect of which the claim is made or containing the property in respect of which the claim is made so damaged by any of the above mentioned perils as to admit rainwater to the interior of the said water.
Storm comprises an atmospheric disturbance involving wind, rain hail and so on, it does not mean persistent bad weather or does it mean heavy rain or persistent rain by itself. damage done by water before it has settled into its nature confines is deemed to be a storm damage.
Flood cover is only given together with storm cover and they can then be referred as storm and flood cover. Flood refers to escape of water from its nature confine such as any natural or artificial water cause, lake, reservoir, canal/dam including inundation from the sea.
Earthquake and Subterranean Fire
The extension is made to buy back the earthquake and subterranean fire exclusion in the standard fire policy. When earthquake risks are covered, particular attention must be paid by insurers to locality of property, because the risk requires special rating according to its situation and the susceptibility of the neighborhood to earthquakes. Risks of this nature which involve convulsion of nature may result to in widespread devastation and underwriters must restrict their commitments over a given area to avoid chances of being faced with heavy losses.
A subterranean fire is fire of volcanic origin or a burning coal mine or oil well.
The standard fire policy can be extended to include:
- Fire damage by earthquake
- Stock damage caused by earthquake
- Full earthquake covers, which is combination of the two
- Fire damage caused by subterranean fire
Subsidence, ground heave and landslip
Subsidence is when the ground below a building moves, causing uneven settlement of the structure and the resultant cracking or damage. Ground heave is the opposite, when the building moves upwards with the same result. Landslip on the other hand is the rapid downward movement of land under influence of gravity.
The movements are caused by the removal or return to water or from from the ground. Like wat happens, during drought, or by trees, or prolonged rainfall, or sites above mine works or made-up ground.
Two special conditions apply to this cover,
- Insurers require notification of any demolition, ground works and excavation or construction being carried out any adjoining site.
- The insurers then have the right to cancel or amend the terms of the contract
In this category are perils which do not fall in any of the above grouping, the key ones are;
- Escape of water
- Sprinkler leakage
- Aircraft damage or objects falling therefrom
- Impact by road/rail vehicles or animals
Escape of Water
This covers damage caused by escape of water from tanks, apparatus or pipes including water escaping from drainage pipes. The peril excludes damage:
- By water leaking from any automatic sprinkler
- In respect of any building which is empty or not in use as the extend of loss may be difficult to control
Sprinkler installation leakages are insured separately because the cover is for accidental escape of water from an installation. The cover in respect of escape of water has the following warranties:
- Maintaining property in a good state of repair
- Storage of goods at minimum height of the ground.
This provides cover against the accidental escape of water from automatic sprinkler installation which may be caused by:
- Damage to sprinkler head or other part of the installation due to impact from some objects
- Heat, other than from the fire as understood by fire policy
- Excessive heat from a boiler flue
- Mechanical defects from installation, unless this is caused by the insured failure to maintain it in an efficient condition
This insurance can be arranged on first loss basis and is subject to the following exclusions
- Explosion, earthquake, subterranean fire, or heat caused by fire.
- Consequential loss or damage by any kind of description;
- Loss caused by the order of any government or local authority.
- Repairs or alterations to the building or premises
- The sprinkler installation being repaired, removed or extended.
The standard fire policy covers fire whether or not caused by aircraft, the aircraft extension is therefore concerned solely with damage other than by fire and covers damage caused by other aerial devices or articles dropped there from. The peril does not cover damage arising from pressure waves caused by air crafts or other aerial devices travelling at supersonic speeds as this is a general exclusion.
Impact covers damage to building and their contents, including walls, gates, and fences that is caused by road vehicles and animals which they accidentally come into contact with. Such animals include horses and cattle. The extension doesn’t cover impact damage caused by road vehicles or animals belonging to or under the control of the insured or their agents or employees.
The cover provided here is the loss or damage in consequence of burning of forests, bush, pampas, jungle or clearing of lands by fire.