Fire insurance business - The business of effecting, otherwise than incidentally to some other class of insurance business, contract of insurance against loss by or incidental to fire or other occurrence customarily included among the risks insured against in fire insurance policies.
Material damage caused by fire or these allied perils is covered under fire insurance. In addition to material damage, there may be consequential losses, e.g., loss of production resulting in loss of profits, etc. These losses are covered under a separate insurance Policy known as Consequential Loss (Fire) policy.
Fire Insurance contract may be defined as an agreement between the insurers and the insured whereby the insurers having received premium, undertake to make good the financial loss, (subject to the sum insured) suffered by the insured as a result of damage or destruction of the insured property by fire or other specified perils, during a stated period.
The principle of indemnity means insured is indemnified only to the extent of his loss; no profit or undue benefit is allowed