The fire next door: cover for a small business in shared premises

You lock up your shop with everything in order, and the risk that undoes you is not yours at all: a short circuit two units down, a neighbour’s stock, a fire that was never in your control.

On 16 September, a fire tore through the Salasar Textile Market in Surat, gutting at least four shops and spreading through several units before it was brought under control. It was the second fire at the same market in a week, and reports said the market’s own fire-prevention system was not working. No single trader lit the match, and no single trader could have stopped it, which is exactly the problem with a fire in shared premises.

For the enormous number of small businesses that operate from a shop in a market, a unit in a complex, or a floor in a shared building, this is the risk that is easiest to ignore and hardest to recover from, because the thing that burns your stock is often not under your roof at all. Understanding how cover works when the walls are shared is worth a few minutes now rather than after the smoke.

Put simply: fire and property insurance for a business covers physical loss of, or damage to, your premises, stock, goods and fit-out from fire and related perils. If you trade from rented or shared premises, the cover that matters most to you is the one on your own stock and contents, because the landlord’s or market’s policy is there to protect their interest, not yours.

In a shared market, the building isn’t yours, but your stock is

This is the assumption that catches small traders out. It is easy to think that because the market, the mall or the landlord has insurance, you are somehow covered. You are not, or at least not for the things that matter to you. Their policy is built around their interest in the building. Your stock, your goods, the fit-out you paid for, the counters and shelving and systems that make the shop work, are yours to insure. When a fire takes them, only a policy in your name answers, and if there isn’t one, the loss is simply yours.

The fire that starts next door

A shared building means shared risk. A fire that begins in a neighbour’s unit, in common wiring, or in a corridor can reach your shop through no fault of your own, and in a packed market it can move fast. That is why a trader’s exposure cannot be measured by looking only at their own space. It also means the quality of the whole building’s safety, not just yours, sits behind your risk, which is precisely what makes a market with a broken fire system dangerous for everyone in it.

Fire safety that only works on paper

The detail that stood out in Surat was that the market’s fire-prevention system was reportedly not functional. This matters twice over. First and most importantly, it is a danger to life and to every business under that roof. Second, it can matter at claim time: fire policies commonly carry conditions about fire-safety equipment being present and maintained, and a working alarm and sprinkler system also feed into how the risk is rated in the first place. Knowing what your own policy expects of you, and pressing for the building’s safety to actually work, is not box-ticking. It is the difference between a system that protects you and a certificate that does not.

Does it matter who started it?

With arson being investigated, a natural worry is whether that affects an innocent trader’s claim. In broad terms, a fire policy responds to loss by fire whatever its source, including a fire started accidentally or by a third party, while a fire deliberately caused by the insured is excluded. So an honest business’s claim is not defeated simply because the cause is under investigation, though an insurer will look into how a loss occurred. The way this applies depends on the facts and the wording, which is exactly the kind of thing worth having someone on your side for.

How a shared-premises fire maps to cover

It helps to separate what a fire in a shared building does, because your stock, the building and the people are answered by different covers. This is category-level — it describes how cover generally works, not any one insurer’s product.

A five-minute check before the next one

You don’t need a full review to find the biggest gaps. Five questions usually surface them:

1. Is your own stock and fit-out insured, in your name?Do not rely on the market’s or landlord’s policy. Their cover protects their interest, not your goods.
2. Is the sum insured on replacement cost, not depreciated value?A claim should fund replacing what you lost at today’s prices, not a written-down book figure that leaves you short.
3. What does your policy require of you on fire safety?Check for conditions about extinguishers, alarms or housekeeping, and make sure you meet them, so a breach cannot be raised against a claim.
4. Would you be covered if the fire started next door?Confirm that spread from a neighbouring unit is within your cover, since in a shared building that is a real and common way to lose everything.
5. If a claim landed, who assembles and argues it?A fire claim, especially one under investigation, is complex. Knowing in advance whether that is your job or someone else’s is the quiet difference on a bad day.

A note on this page. Everything here is general information, not insurance, legal, financial or tax advice, and nothing is an offer. What is covered, including damage spreading from another unit, the policy’s fire-safety conditions and how the sum insured is set, depends on your own policy wording. How cause and any investigation affect a claim depends on the facts and should be confirmed. For advice about your situation, talk to us. The Surat market fire details were drawn from reporting in mid-September 2026.