Purpose of insurance for the Co-Operative Housing Society/Building or Apartment is to protect the property of them from any damages and losses because generally its exposed to various types of peril and operations of these perils, society affects its financially well being.

 The Co-Operative Housing Society/Building or Apartment which is operated by its members who own the Building structure, Various Utilities & equipment within the compound of the Cooperative Society, to the extent of their share.  As per bye law no. 161 (a) of the model bye – laws of Co-operative Housing Societies/Building or Apartment, the Co-operative Housing society/Building or Apartment are required to insure their Building structure and other utilities adequately against the Fire and allied risks like Storm, Flood, Earthquake, Terrorism etc.

Off late, India has experienced major natural calamities like Flash flood of Uttarakhand, J & K and recent floods arising out of Torrential rains in Chennai & Cyclones in almost every year of different intensity leading to financial losses ranging from Rs.5,000 to 50,000 Crores each event.  Worrying part is that only 10% to 20% of these losses are found insured. Moreover, out of the total insured losses, majority of assets were under-insured i.e. not adequately insured.

However, it is highly recommended to opt for Correct insurance policies to cover different types of the risks may exist in Co-operative Housing Societies/Building or Apartment.

Assets to be covered for Insurance in Co-operative Housing Society

Type of Asset Type of insurance Policy applicable Reimbursement
Building Structure with plinth and foundation Society office furniture, Community hall, Club house, , Swimming pool, landscaping etc,  Standard Fire and Special Perils insurance Policy   Re-Construction cost of same kind and nature to extent damaged (upto the maximum value of Insurance amount covered under Policy).
Compound wall, Gates Standard Fire and Special Perils insurance Policy   Re-Construction cost of same kind and nature to extent damaged (upto the maximum value of Insurance amount covered under Policy).
 Lifts, Pumps Generator, Electrical Wiring, CCTV, Society equipment’s Standard Fire and Special Perils insurance Policy Machinery breakdown policy Repair cost of the utility to bring it to pre-loss condition. (upto the maximum value of Insurance amount covered under Policy).

Standard Fire and Special Perils Insurance Policy

  • The Standard Fire and Special Perils Policy covers all properties on land (excluding cost of land), moveable or immoveable, at various locations against named perils.
  • Special Types of Policies are designed for Stocks (declaration and floater), Building, Plant & Machinery keeping in mind the nature of property, proposers’ requirements and basis of indemnification.
  • Long Term Policies available for Dwellings with suitable discounts in premium.
  • Policy can be extended to cover certain additional perils and expenses at additional premium.
  • Certain perils can be deleted with discount in premium rates.
  • Concept of “one risk one rate” for all properties in an Industrial or Manufacturing Complex, for administrative convenience of the proposer.

Perils Covered:

  • Fire
  • Lightning
  • Explosion / Implosion
  • Aircraft damage
  • Riot, Strike, Malicious damage (hereinafter called RSMD Perils)
  • Storm, Tempest, Flood, Inundation, Hurricane, Cyclone, Typhoon and Tornado.
  • Impact by any Rail/ Road vehicle or animal
  • Subsidence / Landslide including rockslide.
  • Bursting and / or overflowing of water tanks, apparatus.
  • Leakage form Automatic Sprinkler Installation.
  • Missile Testing Operation.
  • Pollution or contamination resulting from any of the above perils
  • Any insured peril resulting from pollution and contamination.
  • Bush Fire

Expenses Covered:

The policy automatically covers the following expenses incurred following loss / damage / destruction of a covered property as a result of the operation of an insured peril.

  1. Architects, Surveyors and Consulting Engineers’ Fees upto 3 % of the claim amount.
  2. Expenses incurred for removal of debris to clear the site upto 1 % of the claim amount.

Exclusions Applicable:

  1. Losses/ Expenses not covered:
    1. Applicable Deductibles as per policy
    2. Expenses incurred on Architects, Surveyors’ Consultant Engineers fees and Debris Removal in excess of 3% and 1% of claim amount respectively.
    3. Loss of earnings, loss by delay, loss of market or other consequential or indirect loss or damage of any kind.
  2. Perils not covered:
    1. War and allied perils
    2. Ionising radiations and contamination by radioactivity
    3. Pollution or Contamination
  3. Properties not covered:
    1. Items like manuscripts etc. unless specifically declared.
    2. Cold storage stocks due to change of temperature.


Location of Risk:

  1. The proposer shall describe all locations where the properties are built or installed or stored or kept at the inception
  2. Any change of location of risk shall be covered on intimation of such change.
  3. Change of ownership in the insured property shall be intimated so that the new owner may be covered be means of suitable endorsement.
  4. Any material change in the location of risk, trade or manufacturing activities shall be intimated to the insurer so that the changes are endorsed to offer continuous cover.

Period of Coverage:

  1. Fire Policy is an annual policy, generally, renewable each year.
  2. Long Term policy (for a minimum period of three years) can be considered for covering “dwellings” only with suitable discounts in premium.
  3. Cover for STFI and RSMD perils can be considered during currency (where they are deleted at inception by choice) in special circumstances.
  4. Policy can be cancelled at any time during the currency with suitable refund of premium for the unexpired period.

Deletion of Perils at the inception:

STFI and RSMD perils can be deleted at the inception of the policy for which suitable reduction in package premium rate

Add on covers

In addition to the perils/ expenses covered, the proposer can opt to seek cover in respect of the following perils/ expenses at inception or during currency of the policy on payment of additional premium :


Loss/ damage/ destruction of the property caused by

  • Deterioration of Stocks in Cold Storage premises due to power failure following damage due to an insured peril
  • Forest Fire
  • Impact Damage due to Insured’s own Vehicles, Fork lifts and the like and articles dropped therefrom
  • Spontaneous Combustion
  • Omission to insure additions, alterations or extensions
  • Earthquake (Fire and Shock).
  • Spoilage material damage cover.
  • Leakage and contamination cover.
  • Temporary removal of stocks.
  • Terrorism.


  • Architects , Surveyors and Consulting Engineer’s Fees (in excess of 3% claim amount)
  • Debris Removal (in excess of 1% of claim amount)
  • Loss of rent.
  • Insurance of additional expenses of rent for alternative accommodation.
  • Start up Expenses.

Machinery breakdown Insurance

This is a policy which covers financial loss incurred by the insured due to loss or damage to machinery as a result of sudden accidental electrical and mechanical breakdown. It reimburses the insured for the cost of repairs or replacement of machinery of like nature.
1.This insurance can be taken by the individual owner of the machine or a person or company having financial interest in the machine.
2.All types of industrial machinery like compressors, pumps, turbine etc. as also electrical machines like transformer, electrical motor, generator etc. can be covered under this policy.
3.It is a requirement of this policy that the sum insured or value for which the particular machine is insured should represent the present day purchase value of a similar new machine including all incidental expenses like custom duties, taxes, excise, freight, insurance charges, handling charges etc. In case the sum insured under the policy is less than as per the above requirement the claim will be paid only in such proportion as the sum insured bears to the current replacement cost of similar new machinery.

The policy covers all kinds of electrical and mechanical breakdown resulting from the following incidents:
1.Faulty material/workmanship of the machine
2.Action of centrifugal forces contributing to disruption of the rotating parts
3.Failure of lubrication due to malfunctioning of lubricating oil pumps or its breakdown.
4.Malfunctioning or failure of safety devices.
5.Electrical short-circuiting including electrical fire originating from failure of insulation and or over voltage or under voltage conditions.
6.Abrupt and sudden stoppage of other connected machinery.
7.Entry of foreign bodies into running machine. 8.Inexperienced operations causing damage due to error of judgment or error in operation.

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