🌪️ STFI Coverage in Fire and Engineering Policies — Definition, Meaning, Scope, and Claim Examples
Natural calamities can cause sudden and extensive damage to property, machinery, and construction projects. To safeguard assets from such unpredictable losses, insurance companies provide STFI coverage — one of the most important add-ons under Fire and Engineering insurance policies.
🔍 What is STFI? — Meaning and Definition
STFI stands for Storm, Tempest, Flood, and Inundation. It refers to four specific natural perils that can damage insured property:
- Storm – Strong and violent winds (including cyclones, hurricanes, or typhoons) capable of uprooting trees, damaging roofs, and breaking structures.
- Tempest – A severe windstorm often accompanied by rain, hail, or snow that can cause destruction similar to a cyclone or tornado.
- Flood – Overflow of water from natural sources like rivers, lakes, dams, or reservoirs that submerge normally dry land.
- Inundation – Accumulation or entry of water inside the premises due to heavy rainfall, blockage of drainage, or localized waterlogging.
Together, these four perils form STFI coverage, protecting insured property from major weather-related damages.
🏢 STFI Coverage under Fire and Engineering Policies
1️⃣ Standard Fire and Special Perils Policy (SFSP)
In the Fire Policy, STFI is an optional extension that can be added by paying a small extra premium.
The policy covers:
- Buildings, machinery, furniture, stock, and other fixed assets.
- Damage or loss caused directly by storm, tempest, flood, or inundation.
Example: If heavy rain and floodwaters enter a warehouse and damage stock, the loss is payable under the Fire Policy with STFI extension.
2️⃣ Engineering Insurance Policies
STFI cover is equally important in Engineering Policies, especially for projects exposed to open environmental conditions. It can be opted for in:
- Contractor’s All Risk (CAR) Policy – Covers civil construction sites against natural calamities like flood or storm.
- Erection All Risk (EAR) Policy – Covers erection and installation work of plants and machinery.
- Machinery Breakdown (MBD) / MLOP – STFI cover can be added by endorsement.
Example: Heavy rainfall causing flooding at a construction site, damaging excavators or shuttering material, is payable under the CAR policy with STFI extension.
⚙️ How STFI Coverage Works
When a claim is made under STFI, the insurer evaluates:
- Cause of Loss – Was it directly due to storm, tempest, flood, or inundation?
- Extent of Damage – Physical damage caused to insured property.
- Policy Validity – Whether the policy was active and STFI extension was included.
- Deductible – The compulsory excess the insured must bear per claim.
Note: Damage due to gradual seepage, dampness, or negligence (like leaving doors open during rain) is not covered.
📄 Policy Conditions and Exclusions
- STFI losses are covered only when specifically opted and mentioned in the policy schedule.
- A deductible or excess clause applies (for example, 5% of claim amount subject to a minimum limit).
- Normal rainfall, humidity, or leakage are not covered.
- Proper drainage and safety measures must be maintained.
- Negligence or poor maintenance may lead to claim repudiation.
🧾 Real Claim Examples
✅ Example 1 – Payable Claim under Fire Policy
A factory in Chennai was hit by a cyclone causing floodwater to enter the premises. Machinery and electrical panels were damaged.
- Cause: Inundation following a storm
- Policy: Standard Fire & Special Perils Policy with STFI cover
- Claim Decision: Admissible after deduction of excess
✅ Example 2 – Payable Claim under CAR Policy
A construction site in Mumbai was flooded during monsoon rains, damaging shuttering material and excavators.
- Cause: Flood due to heavy rain
- Policy: Contractor’s All Risk Policy with STFI extension
- Claim Decision: Payable under STFI
❌ Example 3 – Non-Payable Claim (Negligence)
During rain, a warehouse left its shutters open, and water entered the premises damaging goods.
- Cause: Negligence (not storm, tempest, flood, or inundation)
- Claim Decision: Not Payable
💡 Importance of STFI Cover
- Protects assets from weather-related disasters.
- Essential for coastal and flood-prone regions.
- Helps in business continuity after natural calamities.
- Often mandatory for loan-financed projects.
🧠 Key Takeaways
- STFI = Storm, Tempest, Flood, and Inundation.
- Optional but vital extension under Fire & Engineering policies.
- Ensure STFI is included in your schedule.
- Maintain preventive measures to avoid rejection.
🔗 Related Articles
- 🔥 Fire Policy Add-ons Explained
- 🏗️ Engineering Insurance Policy Guide
- 🧾 Common Insurance Claim Examples
🏷️ Tags
STFI | Fire Insurance | Engineering Insurance | Contractor’s All Risk | Flood Insurance | Inundation | Storm Damage | Insurance Claim Example
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