The document discusses earthquakes, fire insurance, and components that are and are not covered under standard fire insurance policies. It defines an earthquake and fire insurance. Components normally not covered include damage from nuclear perils, electrical equipment issues, terrorism, war, and natural disasters like earthquakes. However, with an additional premium, add-on coverage can be purchased for events like earthquakes, wreckage removal, and damage from temperature changes.

1. INSURANCE AND
RISK
MANAGEMENT
GROUP – 11
AAYUSH GARG 20DM004
AYSUH PRATAP 20DM052
BHANU PATHAK 20DM0058
CHIRAG JASWAL 20DM066
DEEPANSHU PAL SINGH 20DM071
DISHA BHATIA 20DM074

2. QUESTION - WHAT IS MEANT BY EARTHQUAKE AND SHOCKS? WHAT
COMPONENTS ARE COVERED OR NOT COVERED IN FIRE INSURANCE? IF
NOT, THEN HOW WILL IT BE COVERED (SUGGESTIONS)
• An earthquake is the shaking of the surface of the Earth
resulting from a sudden release of energy in
the Earth's lithosphere that creates seismic waves.
• The mainshock is the largest earthquake in a sequence which
is sometimes preceded by few foreshocks and can be
followed by many aftershocks.

3. FIRE INSURANCE
• As per the Insurance Act 1938, under Section 2 (6A), Fire Insurance
is defined as “the business of effecting, otherwise than
independently to some other class of business, contracts of
insurance against loss by or incidental to fire or other
occurrence customarily included among the risks insured
against in fire insurance policies.”
• Fire insurance is an agreement whereby one party (the insurer), in
return, for a consideration undertakes to the indemnify the other
party (the insured) against financial loss which he may sustain by
reason of certain defined subject matter being damaged by the
destroyed by fire or other defined perils up to an agreed amount.

4. COMPONENTS NOT COVERED UNDER FIRE
INSURANCE
• No cover for damages caused due to nuclear perils, nuclear waste or
radioactivity.
• No cover for any damage/loss to any of the electrical machines, short circuit,
apparatus, leakage of electricity, etc.
• No cover for loss/damage theft or expense incurred directly or indirectly caused
by any kind of terrorist activity are not covered by the policy.
• No cover for damage due to war, invasion, civil war, commotion, mutiny warlike
situations, etc.
• No cover for the damage/loss to the stock due to change in temperature; loss or
damage directly or indirectly by some of the natural disasters like earthquake,
volcano etc.
• No coverage is provided under the loss of earning, loss of delay or market loss,
consequential loss.

5. IF NOT THEN HOW WILL IT BE COVERED (SUGGESTION)?
The payment of an additional premium, the insured can benefit the following add-on coverage:
 Earthquake
 Wreckage removal
 Forest fire
 Loss of rent
 Start-up cost
 Alternate accommodation
 Unconstrained burning
 Damage to stock due to change of temperature
 Leakage and contamination cover
 Cover for molten metal spillage
 Impact loss owing to insured’s own road/rail transit
SUGGESTION