If you run a business in India, “fire insurance” usually means one of these three: Bharat Sookshma Udyam Suraksha (BSUS), Bharat Laghu Udyam Suraksha (BLUS), or the older Standard Fire & Special Perils (SFSP) policy. Below is a clean, practical comparison—who each policy is for, what perils are covered, in-built extras, typical add-ons, deductibles/excess, and key limits—so you can pick the right fit (and avoid awkward surprises at claim time).
1) Who should buy which policy?
| Policy | Intended for | Sum Insured (value at risk at one location) | Notes |
|---|---|---|---|
| BSUS | Micro & small enterprises | Up to ₹5 crore | If value at risk later exceeds ₹5 crore during the period, on expiry you must shift to the applicable policy. (IRDAI) |
| BLUS | Small & medium enterprises | > ₹5 crore and ≤ ₹50 crore | If value falls below ₹5 crore or rises above ₹50 crore, you migrate on renewal to the appropriate policy. |
| SFSP | Larger / complex risks | Typically, above ₹50 crore (and other non-standard risks) | Risks exceeding ₹50 crore continue under the erstwhile fire tariff/SFSP framework until further notification. (uiioa.in) |
2) Core peril coverage (what events are insured)
All three cover Fire, Lightning, Explosion/Implosion, Impact Damage, Riot/Strike/Malicious Damage (RSMD), Storm/Cyclone/Tempest/Hurricane/Typhoon/Tornado/Flood/Inundation (STFI), Subsidence/Landslide/Rockslide, Bursting/Overflowing of water tanks/pipes, Leakage from sprinklers, Missile testing.
Theft within 7 days of a covered peril is included under BSUS/BLUS. Terrorism is via the standard Terrorism Clause (optional/ deletable per insurer).
For SFSP, the same classic peril set applies; Earthquake and STFI are frequently offered as add-ons (optional for some insurers), and Terrorism via the Terrorism Pool clause.
3) How Sum Insured is set (basis of valuation)
- BSUS / BLUS:
- Buildings/Plant & Machinery/Furniture & Fixtures/other contents at Reinstatement Value (new-for-old, subject to policy conditions).
- Stocks: raw materials at landed cost; WIP at input cost; finished stock at manufacturing cost or contract price (if sold but not delivered).
- SFSP:
- Traditionally on Market Value (new replacement value minus depreciation) unless reinstatement is specially opted as an add-on/endorsement.
4) In-built covers (automatically included) and limits
Bharat Sookshma Udyam Suraksha (BSUS)
- Additions/alterations/extensions (except stocks): up to 15% of the item’s Sum Insured.
- Stocks on floater basis: available.
- Temporary removal of stocks (for processing/fabrication/finishing): up to 10% of stock value.
- Specific contents:
- Money: up to ₹50,000 (per policy period)
- Documents (deeds, manuscripts, plans, etc.): up to ₹50,000
- Computer programs/data: up to ₹5,00,000
- Employees’/Directors’/visitors’ personal effects: ₹15,000 per person, max 20 persons
- Start-up expenses: up to ₹1,00,000
- Professional fees (architects/surveyors/consulting engineers): up to 5% of claim amount
- Removal of debris: up to 2% of claim amount
- Costs compelled by municipal regulations: covered subject to conditions
- Under-insurance waiver: up to 15%
- Excess/Deductible: ₹5,000 per claim (terrorism excess as per clause)
Bharat Laghu Udyam Suraksha (BLUS)
- Additions/alterations/extensions (except stocks): up to 15%
- Temporary removal of stocks: up to 10% of stock Sum Insured
- Specific contents:
- Money: up to ₹50,000 (per policy period)
- Documents: up to ₹50,000
- Computer programs/data reproduction: up to ₹5,00,000 (per policy period)
- Employees’/Directors’/visitors’ personal effects: ₹15,000 per person, max 20 persons
- Start-up expenses: up to ₹5,00,000 (per policy period)
- Professional fees: up to 5% of claim amount
- Removal of debris: up to 2% of claim amount
- Costs compelled by municipal regulations: covered subject to conditions
- Under-insurance waiver: up to 15%
Key difference inside “in-builts”: BLUS gives a higher Start-up Expenses limit (₹5 lakh) than BSUS (₹1 lakh). All other core in-built sub-limits are broadly aligned.
Standard Fire & Special Perils (SFSP)
- Architects/Surveyors/Consulting Engineers’ fees: typically included up to 3% of the claim, with add-on available to go beyond 3%.
- Removal of debris: typically included up to 1% of the claim, with add-on available to go beyond 1%.
- Other extras (loss of rent, alternative accommodation, deterioration of stocks in cold storage, start-up expenses, etc.) are offered as add-ons—not standard.
| Feature | Bharat Sookshma Udyam Suraksha (BSUS) | Bharat Laghu Udyam Suraksha (BLUS) | Standard Fire & Special Perils (SFSP) |
|---|---|---|---|
| Eligibility (Value at Risk) | Up to ₹5 crore at one location | ₹5 crore – ₹50 crore at one location | Above ₹50 crore at one location |
| Target Businesses | Micro enterprises | Small & medium enterprises | Medium & large enterprises |
| Covered Assets | Buildings, plant & machinery, stock, other assets | Buildings, plant & machinery, stock, other assets | Buildings, plant & machinery, stock, other assets |
| Fire & Lightning | ✅ Included | ✅ Included | ✅ Included |
| Earthquake | ✅ In-built (mandatory) | ✅ In-built (mandatory) | ❌ Optional add-on only |
| STFI (Storm, Cyclone, Flood, etc.) | ✅ In-built (mandatory) | ✅ In-built (mandatory) | ❌ Optional add-on only |
| Terrorism | ✅ In-built (mandatory) | ✅ In-built (mandatory) | ❌ Optional add-on only |
| Impact Damage (vehicle, tree, aircraft, etc.) | ✅ Included | ✅ Included | ❌ Not included (needs add-on) |
| Stock on Floater Basis | ✅ Available | ✅ Available | ❌ Not standard |
| Temporary Removal of Stock | ✅ Included | ✅ Included | ❌ Not standard |
| Alterations / Additions Cover | ✅ Included | ✅ Included | ❌ Not standard |
| Startup Expenses after Loss | ✅ Included | ✅ Included | ❌ Not standard |
| Removal of Debris | ✅ Included | ✅ Included | ✅ Included |
| Reinstatement / Replacement Value | ✅ Available | ✅ Mandatory option | ✅ Available (market/reinstatement) |
| Underinsurance Waiver | ✅ Available | ✅ Available | ❌ Not standard |
| Can Perils Be Excluded? | ❌ No (mandatory in-built) | ❌ No (mandatory in-built) | ✅ Yes (customizable) |
| Excess / Deductible | ₹5,000 per claim | 5% of claim, minimum ₹10,000 per claim | 5% of the claim amount subject to a minimum of ₹25,000 |
6) Common exclusions to watch
All three exclude, among others: willful acts, certain electrical short-circuiting damage to the affected machine itself (ensuing fire damage is covered), stocks in cold storage due to temperature change (unless add-on), consequential loss (like loss of profit) unless separately insured, war/nuclear, pollution (except when caused by an insured peril).
7) Practical buying/placement tips
- Size your cover correctly. For BSUS/BLUS, set Reinstatement Value for assets and correct bases for stocks (raw/WIP/finished/contract price). Under-insurance waivers help, but they don’t fix major under-declarations.
- Mind the migration rule. Crossing ₹5 crore or ₹50 crore during the term doesn’t void cover mid-term; you switch at renewal. Budget ahead for BLUS/SFSP pricing and wording shifts.
- Add the add-ons you actually need. For SFSP, extend architects’ fees/debris limits, add Earthquake, STFI, Terrorism, and Loss of Rent/Alt Accommodation where relevant. For BSUS/BLUS, consider Declaration Policy for stocks if values fluctuate.
- Check unoccupancy and electrical clauses—they’re routinely invoked at claim time.
8) Snapshot comparison of in-built sub-limits
| In-built Item | BSUS | BLUS | SFSP |
|---|---|---|---|
| Additions / Alterations / Extensions (excluding stocks) | 15% of item SI | 15% of item SI | By endorsement / negotiation (not standard) |
| Temporary Removal of Stocks | 10% of stock SI | 10% of stock SI | Add-on / Endorsement |
| Money (per period) | ₹50,000 | ₹50,000 | Add-on |
| Documents (deeds, plans, etc.) | ₹50,000 | ₹50,000 | Add-on |
| Computer Programs / Data | ₹5,00,000 | ₹5,00,000 | Add-on |
| Personal Effects (per person; up to 20 people) | ₹15,000 | ₹15,000 | Add-on |
