An October 2025, judgment of the Supreme Court of India held that once it is established that the loss at the insured premises is due to fire and there is no finding of an allegation of fraud or that the insured is the instigator of the fire, the cause of the fire is immaterial. It will be assumed and presumed that the fire is accidental and falls within the ambit and scope of the a fire policy.
The wording of the fire policy was similar to those in South Africa insuring against the destruction of or damage to the insured property by the insured perils including fire, but excluding damage by its own fermentation, natural heating or spontaneous combustion, its undergoing any heating or drying process, or burning ensured by the order of a public authority.
The surveyor had expressed the opinion that an electrical short circuit could not have been the source of the fire and alleged that there were three seats of the fire. The court found that the final report had found that an electric short circuit was not the sole source and there were three independent sources/seats/pools of fire. But that finding could not lead to the conclusion that the fire in question was not accidental. The report was not conclusive with regard to the cause of the fire. Accordingly, the court found the incident of fire was an accidental fire covered by the policy.
The court said the following:
“It is settled law that the contract of fire insurance is a contract to indemnify the insured against loss by fire. The expression ‘fire’ signifies the cause of the loss and in order to determine whether in a particular case the loss is caused by fire, the following rules generally apply:-
- There must be an actual fire; hence mere heating or fermentation will not be sufficient to render the insurers liable for loss occasioned thereby.
- There must be something on fire which ought not to have been on fire.
- There must be something in the nature of an accident, but a fire occasioned by the wilful act of a third person without the consent of the insured, is to be regarded as accidental for the purpose of this rule.
If these requisites are satisfied, any loss attributable to the fire, whether by actual burning or otherwise, is within the contract. The fire must be accidental.
To carry out the investigation, therefore, beyond the cause of the loss and to cast upon the insured the burden of establishing that the cause of the fire itself was covered by his contract, would largely defeat this object.”
There was also a fight about quantum. The policy provided cover for “FFF” which the court said could only mean furniture, fixtures and fittings. The insured was entitled to the amounts claimed under the heads of Building, Plant and Machinery, Showroom, Electric Fittings, Furniture and Fixtures.
This judgment mostly states the obvious but a decision reminding us of the principles (which are also applicable in South Africa), is useful. In South Africa, if an insurer wants to prove that the fire was not accidental it will need to lead acceptable evidence proving this allegation. If the insurer relies on an exception, the onus will be on the insurer to prove that the fire was deliberately caused by the insured or someone acting with their privity or consent.
Orion Conmerx PVT. LTD v National Insurance Co. Ltd, Supreme Court of India: 2025 INSC 127