the insurer's traditional, customisable fire insurance for all properties on land — 11 standard perils covering FLEXA, NatCat, RSMD, flood, subsidence, and more. Add earthquake, terrorism, loss of profits, debris removal. Declaration and Floater stock policies. Covers under-construction buildings and Kutcha properties. Market Value or Reinstatement Value basis. Suitable for large, complex, and customised risks.
India's Traditional Fire Insurance· Governed by All India Fire Tariff 2001· All Properties· All SI Sizes
The Standard Fire and Special Perils Policy (SFSP) is Probitas Insurance Brokers's traditional, customisable fire insurance — the product that governed ALL property fire insurance in India from 2001 until April 2021. It insures all properties on land against 11 named perils, with the flexibility to add additional covers or delete unwanted perils. Now primarily used for large, complex, or customised risks where the Bharat standardised products don't apply.
Since April 2021, IRDAI introduced standardised Bharat products (BGR/BSUS/BLUS) for residential and most commercial risks up to ₹50 crore. SFSP is now the product of choice when:
→ Total SI exceeds ₹50 crore (beyond BLUS range)
→ Property is under construction (Bharat products cover only completed buildings)
→ Kutcha or non-standard construction (ineligible for BLUS)
→ Large, fluctuating stocks needing Declaration or Floater policies
→ Highly customised coverage needs (specific add-ons, specific deletions for discount)
→ Industrial All Risks requirements
→ Long-term dwelling policies with premium discount
Building a factory, hotel, hospital, or IT campus during construction — SFSP is the ONLY the insurer fire product that covers it
SFSP ExclusiveSI above ₹50 crore — steel plants, large factories, hospital groups, IT parks — beyond the BLUS ceiling
SI > ₹50 CroreThatched warehouses, bamboo structures, mixed construction — ineligible for BLUS; SFSP covers with rate loading
SFSP EligibleTrading businesses with ₹15–₹200Cr in fluctuating stock — Declaration and Floater policies for accurate premium
Declaration / FloaterSFSP + Machinery Breakdown + Contractor risk + BI combined into one comprehensive industrial policy
IAR Policy2–3 year policies for residential properties with premium discounts — SFSP offers this; Bharat products have limited multi-year options
2–3 Year DiscountsCompleted AND under construction, including plinth, foundations, compound walls
All P&M, equipment, accessories — including second-hand machinery
All furniture, fixtures, fittings, electronic installations
Raw materials, WIP, finished goods, packing materials — in factories, godowns, tank farms
Goods stored in the open or yard areas with appropriate endorsement
Pipelines including contents, inside or outside the compound
Residential properties including contents — Market Value or Reinstatement basis
Contents of shops, hotels, restaurants, offices at declared locations
11 Standard In-Built Perils + Optional Add-On Extensions
SFSP covers 11 named perils in the base policy. Unlike Bharat products, earthquake is NOT in-built — it must be added separately. Certain perils can also be deleted for a premium discount.
Unlike the Bharat Griha Raksha, BSUS, and BLUS policies where earthquake is a mandatory in-built peril, SFSP does NOT automatically include earthquake cover. India has 5 seismic zones — approximately 59% of India's landmass falls in moderate to very high seismic risk zones (III, IV, V). Add the Earthquake (Fire and Shock) extension at extra premium. Strongly recommended for ALL SFSP policyholders across India.
Covers physical damage from earthquake, volcanic eruption, or other convulsions of nature — both fire damage (buildings set on fire by earthquake) and shock damage (structural damage from the seismic shock itself).
India has 5 seismic zones. Most of peninsular India, the Himalayan belt, Northeast India, Gujarat, and Kashmir fall in high-risk zones III, IV, and V.
A separate policy attached to SFSP covering loss of gross profit and standing charges (rent, salaries, EMIs) during the period the business is shut for repairs after a fire or allied peril. Indemnity period: typically 12–36 months.
THE MOST IMPORTANT EXTENSION for any commercial SFSP policyholder — without it, SFSP only pays for physical damage, not income loss during repair.
Physical damage from acts of terrorism or sabotage — covered via the GIC Re Terrorism Pool. For large SFSP risks (SI > ₹50Cr), terrorism pool coverage may apply automatically under the RSMDT wording or as a specific add-on. Essential for: high-footfall commercial premises, near public infrastructure, industrial zones in sensitive areas.
Changes the settlement basis from Market Value (depreciated) to full Reinstatement Value (New for Old) — insurer pays the full cost of reinstating/replacing the property with a new equivalent, without deducting depreciation.
Without this clause, a 10-year-old ₹50L machine is settled at ₹20L (60% depreciation). With this clause: settled at ₹50L (full new replacement cost).
If the insured property is damaged and rendered uninhabitable/unusable: (a) Loss of Rent — rental income lost if property is let out (b) Rent for Alternative Premises — if owner-occupier has to operate from a temporary location during repairs. Covers the rental dimension while Fire Loss of Profits covers the trading income dimension.
Professional fees for architects, surveyors, and consulting engineers for assessing damage, preparing repair estimates, and supervising reinstatement work — typically up to 3–5% of the claim amount. For large, complex commercial buildings, professional reinstatement oversight costs can be significant.
Cost of removing debris (rubble, demolished materials) from the insured premises after an insured peril — typically up to 2–3% of the claim amount. Large factory fires, industrial explosions, and earthquake damage generate significant debris removal costs that are not automatically covered in the base SFSP.
Extends SFSP to cover: (a) Spontaneous combustion — important for textile, jute, chemical, and agricultural commodity storage where materials can self-ignite without external fire source (b) Bush fire / forest fire — wildfire spreading from nearby forests or grassland to the insured premises.
Covers sudden physical damage to plant, machinery, and equipment from internal mechanical or electrical failure — the machine breaking down from its own fault, without any external fire or flood cause. Can be combined with SFSP to provide comprehensive property + machinery protection. For industrial all risks, this is combined into the IAR policy.
Covers fire damage to electrical plant, machinery, appliances, and installations arising from overrunning, excessive electrical pressure, short circuit, arcing, self-heating, or electrical leakage — the fire caused BY the appliance's internal electrical fault. Standard SFSP excludes this; this clause specifically adds it back.
Unlike the standardised Bharat products (where coverage is fixed by IRDAI), SFSP allows removal of specific perils you don't need — reducing your premium:
Discuss with Probitas on 022 4302 0000 to identify which deletions make sense for your specific property and risk profile.
The Most Critical SFSP Decisions — Valuation Basis and Average Clause
Two decisions at SFSP inception can determine whether your claim is fully paid or severely under-settled: (1) choosing Market Value vs Reinstatement Value, and (2) insuring to full value to avoid the Average Clause.
SFSP has NO underinsurance waiver. Unlike Bharat products (which waive the average clause if SI ≥ 85% of actual value), SFSP applies the traditional Average Clause — if SI is less than actual value, your claim is reduced proportionally:
Example: Property worth ₹1 crore. SI: ₹60 lakh. Claim: ₹30 lakh.
SFSP pays: (60/100) × ₹30L = ₹18L only. You absorb: ₹12L (40% of your own claim).
Bharat products (BGR/BSUS/BLUS): Same situation → ₹30L paid in full (85% waiver applies).
The Average Clause is the leading cause of under-settlement in fire insurance claims in India. ALWAYS insure to full reinstatement value. Review and update SI annually. Use the calculator below.
The Reinstatement Value Clause must be specifically endorsed at policy inception — you cannot add it after a loss has occurred. The additional premium cost is modest compared to the financial protection it provides on total or major partial losses. For any property where you would need to rebuild or replace assets after a fire or flood — always opt for Reinstatement Value basis. Call 022 4302 0000 to confirm your SFSP includes this clause.
| Asset Category | Default Basis | If RVB Opted | Stock Basis |
|---|---|---|---|
| Buildings (completed) | Market Value (depreciated) | Full reinstatement cost (no depreciation) | — |
| Buildings (under construction) | Cost incurred to date | Full estimated completion cost basis | — |
| Plant & Machinery | Market Value (depreciated) | Full new replacement cost | — |
| Furniture / FF&E | Market Value (depreciated) | Full new replacement cost | — |
| Raw Materials | — | — | Landed cost at time of loss |
| Work in Progress (WIP) | — | — | Input cost at time of loss |
| Finished Goods | — | — | Cost of production or selling price |
| Trading Goods | — | — | Cost price at time of loss |
Full Feature Comparison
| Feature | 🔥 SFSP (This Product) | 🏠 Bharat Products (BGR/BSUS/BLUS) |
|---|---|---|
| Origin / Governance | All India Fire Tariff (AIFT) 2001 — Traditional | IRDAI mandated April 2021 — New Standard |
| Standardised? | NO — Customisable; no fixed format; add/delete perils | YES — Fixed terms; identical across all insurers |
| Base perils | 11 named perils in base | 13+ named perils (includes earthquake) |
| Earthquake cover | ADD-ON — Extra premium required | IN-BUILT (free — mandatory) |
| Underinsurance | FULL AVERAGE CLAUSE — SI/Value × Claim | 85% Waiver — no average if SI ≥ 85% of value |
| Valuation basis | Market Value (default) OR Reinstatement Value (opt) | Reinstatement/New for Old ONLY |
| Kutcha construction | CAN cover Kutcha with rate loading | EXCLUDED from BLUS (Pucca only) |
| Under-construction property | YES — Buildings being built can be covered | EXCLUDED — only completed structures |
| Stock policies | Declaration and Floater — any SI size; large traders | Limited stock cover variants |
| Long-term policy for dwellings | YES — 2–3 year policies with premium discounts | Not standard in most Bharat products |
| Business Interruption | Separate Fire Loss of Profits policy attached to SFSP | Optional cover within Bharat product (BSUS+/BLUS+) |
| SI threshold | No upper limit — used for >₹50Cr risks | BSUS ≤₹5Cr; BLUS ₹5–₹50Cr |
| Theft cover | NOT automatic — requires separate policy | BGR: theft within 7 days of insured event |
| Process spoilage | EXCLUDED (industrial risk) | Bharat commercial products: N/A |
| Customisation | HIGH — Add/delete perils; negotiate terms | LOW — Fixed by IRDAI |
Call 022 4302 0000 — our commercial property specialist will recommend the right product and structure for your specific risk.
Specialised SFSP Variants for Specific Needs
the insurer offers these specialised SFSP variants designed for specific property, stock, and industrial risk requirements that the standard Bharat products cannot address.
For large traders and manufacturers with fluctuating stock values. Insured declares stock at each location monthly or quarterly. Year-end premium adjustment based on average of declarations — more accurate and cost-effective than insuring at peak stock value all year. The monthly declaration IS the effective SI at any given time.
Monthly/Quarterly DeclarationsA single floating SI covers stock at multiple named locations under one policy. Stock at any one location can use the full floater SI — if one location has more stock than usual, it is automatically covered without prior notice. More flexible than per-location policies for multi-site trading and manufacturing businesses.
Multi-Location Single SIAvailable for residential properties for 2–3 year policy terms with premium discounts for the multi-year commitment. Recommended for home loan borrowers who want single-premium coverage for part of their loan tenure — avoids annual renewal risk and may offer meaningful premium savings over 2–3 years.
2–3 Year Premium DiscountA comprehensive industrial policy combining SFSP + Machinery Breakdown + Contractor's plant risk + other covers into one integrated industrial policy for very large manufacturing, processing, and industrial facilities. For businesses that need the broadest possible property protection under one umbrella — typically large factories and industrial plants with total assets >₹100 crore.
SFSP + Machinery + All RisksBharat BLUS and BSUS explicitly exclude under-construction buildings — only completed structures are eligible. If you are building a factory, hotel, hospital, warehouse, or IT campus and need fire insurance during the construction phase:
→ SFSP covers the building being built (plinth, foundations, structural work in progress)
→ SFSP covers construction materials stored on site
→ SFSP covers partially completed structures at each stage of construction
→ SFSP covers P&M being installed and tested during construction
The SI evolves as the building progresses — discuss with Probitas on 022 4302 0000 to structure the SFSP correctly for a construction project.
How to File an SFSP Claim
Before any SFSP claim is processed, the surveyor will assess the actual reinstatement value of your property and compare it with your Sum Insured. If your SI is less than the actual value, the Average Clause will reduce your claim proportionally. Use the Average Clause Calculator in the Sum Insured section to check your position. If you are underinsured: discuss with Probitas immediately on 022 4302 0000 — SI top-up may be possible even mid-claim.
SFSP does NOT cover loss or damage by spoilage resulting from the RETARDATION, INTERRUPTION, or CESSATION of any process or operation caused by an insured peril. Example: A pharma batch is spoiled because the temperature-controlled production room lost power due to flood — the physical damage to the room is covered; the spoiled batch from the process interruption is EXCLUDED. For this risk, a separate policy (Deterioration of Stocks) is required.
SFSP covers PHYSICAL DAMAGE only — the cost of repairing/replacing damaged property. It does NOT cover the income loss while the business is shut for repairs. For business interruption/loss of gross profit and standing charges, a separate Fire Loss of Profits (LoP) Policy must be specifically attached to your SFSP. Discuss with Probitas at 022 4302 0000 when buying SFSP.
Call 022 4302 0000 immediately after any loss. "Immediate notice" is a policy condition — delayed notification can be used to repudiate claims. For fire: inform fire brigade. For RSMD/Terrorism: inform police immediately and lodge FIR.
Photograph ALL damage. Do NOT carry out permanent repairs before surveyor inspection. Take all reasonable steps to minimise further loss. Preserve all damaged items as evidence for the surveyor's assessment.
Prepare immediate stock inventory at time of loss. Compare against stock register and books of account. Compile purchase invoices and production records. For Declaration policies: confirm the current period's declared stock value.
IRDAI-licensed surveyor appointed for all claims above ₹75,000. For large claims (>₹10Cr): a firm of loss adjustors is typically appointed. Surveyor assesses on Market Value or Reinstatement Value basis as per your policy. Average Clause calculation done here.
Claim Form + Policy document + Photographs + Surveyor report + Repair estimates + Police/FIR (for fire, RSMD, terrorism) + Fire Brigade report (for fire) + Books of account (for stock claims) + Stock register/inventory + Valuation report (if RVB) + Bank details (NEFT).
Settled at Market Value or Reinstatement Value (as per policy basis). Average Clause applied if SI < actual value. Process spoilage losses excluded. IRDAI TAT: 30 days from complete documents. Consequential losses require separate Fire LoP claim.
Illustrative Scenarios — SFSP in Action
| Parameter | Large Factory Fire + Earthquake (Ahmedabad) | Stock Declaration + Flood (Mumbai) | Under-Construction Fire (Bengaluru) |
|---|---|---|---|
| Business | Sunrise Textiles Ltd., large textile mill, Ahmedabad (Seismic Zone III) | IndiaSpice Wholesale Traders, godown, Dharavi, Mumbai | Greenfield IT Campus, under construction, Whitefield, Bengaluru |
| SFSP Type | Standard SFSP; SI ₹65 crore total | Declaration Policy; max SI ₹15 crore; stock fluctuates ₹3–₹15Cr monthly | Standard SFSP; SI ₹85 crore (estimated construction cost) |
| Add-Ons / Basis | Earthquake (Fire & Shock) + RVB + RSMD (standard) + Fire LoP (12M) attached | Standard SFSP base — stock at cost price; no earthquake needed (flat terrain) | RVB + Earthquake + Terrorism (GIC Pool) |
| Event | Major Gujarat earthquake — factory building and all P&M damaged; fire breaks out in stores during earthquake | Mumbai monsoon floods the godown; ₹11.2Cr of stock present (current month's declaration) | Fire breaks out in partially completed building during electrical fitting; construction materials and formwork destroyed |
| Physical Damage Claim | Building: ₹12,00,00,000 (RVB) P&M: ₹28,00,00,000 (RVB) Stocks: ₹4,50,00,000 (at cost) | Stock: ₹9,80,00,000 (flood damage at cost price; current declaration ₹11.2Cr) Debris: ₹19,60,000 (2%) | Building (in progress): ₹6,50,00,000 (reinstatement cost) Construction materials: ₹2,80,00,000 |
| Add-On Claims | Prof. fees: ₹88,50,000 (3% of claim) Debris: ₹66,00,000 (2% of claim) Fire LoP: ₹18,00,00,000 (12 months GP + standing charges) | No add-ons — base policy only | Prof. fees (add-on): ₹46,50,000 (5% of claim) |
| Average Clause | SI ₹65Cr; actual value ~₹70Cr; ratio 92.8% → minor reduction applies | Declaration SI = current stock → no average issue (declaration IS the SI) | SI ₹85Cr maintained at full; work-in-progress value ≤ ₹85Cr at time of fire → no average |
| Note on Under-Construction | — | — | BLUS/BSUS CANNOT cover this — SFSP is the ONLY the insurer fire product that covers buildings under construction |
| Total Settled | ~₹64 Crore net | ~₹10 Crore net | ~₹9.76 Crore net |
* Illustrative only. Actual claims subject to policy terms, surveyor assessment, Average Clause calculation, and complete documentation. Fire Loss of Profits is a separate policy attached to SFSP — not included in base claim above. Settled amounts shown after average clause application and deductibles.
Common Questions
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Fill in your property details, choose your add-ons and valuation basis. Our fire insurance specialist will contact you within one working day with a personalised SFSP quote including Average Clause advice and Reinstatement Value recommendations.
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