Fire & business cover
What fire insurance does not cover: the gaps businesses miss
Every fire policy carries a quiet list of things it will never pay for. The businesses that read it before a loss are the ones not surprised after — and some of those gaps can be closed before they ever bite.
Knowing what a fire policy won't pay for is as important as knowing what it will — it is the boundary of fire insurance for business, and the place claims are most often refused.
The short version
- Standard exclusions include war, nuclear, willful acts, gradual wear and consequential loss.
- Electrical and mechanical breakdown is treated narrowly.
- Some gaps close with an add-on; war and nuclear risk have no remedy.
- Lost income needs business-interruption cover, not a fire add-on.
The standard exclusions
A fire policy excludes war and nuclear risks, willful acts, gradual wear and deterioration, pollution, and consequential losses such as lost income — and it treats electrical breakdown narrowly.
- War, warlike events and nuclear risks
- Willful or deliberate acts by the insured
- Wear, tear and gradual deterioration
- Electrical or mechanical breakdown — unless specifically covered
- Consequential loss / loss of income — unless business interruption is added
- Pollution or contamination, as defined
Some of these gaps can be closed with add-ons; others can't, which is exactly why reading them before a loss matters.
The exclusions that surprise businesses
Three catch businesses out most often: consequential loss, the narrow treatment of electrical breakdown, and gradual deterioration.
Consequential loss — the income lost while you rebuild — is not covered by a base fire policy. Electrical/mechanical breakdown is handled narrowly, so a short-circuit that damages a machine may fall outside the cover people assume they have. And gradual deterioration is never a fire claim.
Which gaps an add-on closes
Some exclusions have a remedy and some don't.
Excluded perils such as earthquake or terrorism can be bought back as add-ons; spontaneous combustion can be added for at-risk stock; lost income needs a separate business-interruption cover, not a fire add-on. War and nuclear risk have no remedy. And where a policy does pay, an inadequate sum insured can still cut it — see the average clause.
Frequently asked questions
Is a short circuit covered by fire insurance?
Electrical breakdown is treated narrowly — damage to the machine itself from over-running or short-circuiting is often excluded, though a resulting fire that spreads may be covered. Read the wording carefully.
Does fire insurance cover lost income while I rebuild?
No — that is consequential loss, excluded from a base fire policy. It needs separate business-interruption cover.
General information on common exclusions, not advice on a specific policy. Exclusion wording tied to the filed Standard Fire & Special Perils policy, to be cleared by counsel.
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A 20-minute video call with a Growth Advisor — no obligation, and no quote pushed. It opens with a five-minute video from our founder on how the benefits stack works and why Ethika exists; the rest is your questions. You'll leave with an honest read on your current cover and claims experience, and a straight answer on whether we can genuinely help — even if you never become a client.
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A note on this page. Everything here is general information, not insurance, legal, financial or tax advice, and nothing is an offer. For advice about your situation, talk to us.