Insurance on Property - 1.4

Give an example of circumstances in which the heat process exclusion in the Basic Fire Policy does not apply to part of a loss.

Answer:

Loss or damage to goods undergoing a process involving the application of heat is excluded if it results from the process. However, we cannot exclude such goods automatically from the policy. A fire starting elsewhere in an insured's premises eventually may destroy goods undergoing a heat process. The exclusion would not operate in such circumstances.

Only the goods actually undergoing the process are excluded. The exclusion would not apply to other property burned when a fire spreads beyond the excluded property.

Once a computer center suffered a fire. The root cause was one of the terminals. That terminal was undergoing a process involving the application of heat. That terminal should be excluded. At the same time, for other terminals and computers, even they were all generating heat, they should not be excluded and loss on these equipments should be covered.