SFSP Policy Covered Perils: What’s Protected and What’s Not? (2 min read)

The Standard Fire and Special Perils (SFSP) Policy provides protection for property and assets against fire and specific named risks. However, since it is a named peril policy, only the perils explicitly mentioned in the policy are covered—anything not listed is excluded.

1. Fire

The SFSP policy covers losses directly caused by fire and its effects, including:

• Fire damage to insured property.
• Firefighting efforts, such as water damage, smoke, and structural damage caused while extinguishing the fire (e.g., breaking doors or windows).
• Smoke damage resulting from a fire.
• Spread of fire from an adjacent uninsured property, including resulting smoke and firefighting water damage.

However, fire damage is not covered when caused by:

• Self-heating, fermentation, or spontaneous combustion.
• Exposure to heating or drying processes.
• Burning by order of public authorities.

This ensures comprehensive protection against fire and its consequential damages, providing crucial coverage for property owners.

2. Lightning

The SFSP policy covers damage caused by a direct lightning strike to insured property. This includes structural damage, fire caused by lightning, and any physical destruction resulting directly from the impact of lightning.

However, if lightning causes electrical disturbances that lead to the failure of electrical equipment, machines, or circuits without directly striking them, such losses are not covered under the policy. For instance, if a lightning strike results in a power surge that damages electrical appliances, such damage would be excluded from coverage.

This ensures that only direct lightning-related losses are protected, while indirect electrical failures remain outside the scope of the policy.

3. Explosion/Implosion

Covers loss due to explosions or implosions, except for:

• Steam-generating boilers, economizers, or machinery.
• Damage caused by centrifugal forces.

4. Aircraft Damage

Covers destruction caused by aircraft or falling objects from them, except for pressure wave damage.

5. Riot, Strike, and Malicious Damage

Covers property damage due to riots or strikes but excludes losses from:

• Work stoppages or process interruptions.
• Government confiscation.
• Illegal occupation or theft.

6. Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood, and Inundation

This policy covers Act of God (AOG) perils such as storms, cyclones, typhoons, tempests, hurricanes, tornadoes, and floods. These natural disasters can cause severe destruction to property, and the SFSP policy provides protection against such events.

Additionally, the policy covers inundation, which refers to water entering the insured property from external sources. However, for a claim to be valid under inundation coverage, the water must enter through a path that cannot be closed or is technically open—such as an open doorway, breached embankment, or overflowing drainage.

The policy does not cover water ingress due to:

• Seepage through cracks in walls or floors.
• Rainwater entering through open windows or other unintended openings.
• Rainwater leakage through already damaged roofs.

This distinction ensures that only sudden and uncontrollable water ingress due to AOG perils is covered, while gradual or avoidable water entry remains excluded.

7. Impact Damage

Covers damage from vehicles or animals, provided they do not belong to the insured or their employees.

8. Subsidence and Landslide (Including Rockslide)

Covers damages from ground movement, except in cases of:

• Structural settling or river erosion.
• Defective design or construction work.

9. Bursting or Overflowing of Water Tanks, Apparatus, and Pipes

Covers damages from unexpected water leaks or bursts.

10. Missile Testing Operations

Covers damage resulting from missile testing activities.

11. Leakage from Automatic Sprinkler Installations

Covers accidental water leaks, except when caused by:

• Ongoing repairs or modifications.
• Construction defects.

12. Bush Fire

Covers losses due to bushfires but excludes large-scale forest fires.

The SFSP policy excludes terrorism-related losses, meaning any damage from terrorist activities or attempts to control them is not covered.

The SFSP Policy Covered Perils provide vital protection against fire and related risks, but since it covers only named perils, it’s crucial to review the policy and add endorsements if needed. Understanding these covered perils helps policyholders make informed decisions about safeguarding their assets.