Fire insurance coverage construed broadly where actual loss is proved and survey report is inconclusive

In a fire insurance claim, the SC held that once actual fire damage was proved and there was no finding of fraud, intentional ignition, or other exclusionary conduct by the insured, the precise cause of the fire was immaterial and repudiation on the basis of an inconclusive survey report was unsustainable. It further construed the policy expression "FFF" to mean furniture, fixtures and fittings, applying a broad interpretation in favour of coverage. On loss quantification, contemporaneous business records were accepted as sufficient proof of stock loss, while the surveyor's contrary valuation was rejected as unreasoned and perverse; the interest component was modified only as to rate and commencement.

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Issues: (i) whether the fire loss was an accidental fire covered by the policies and the insurer could repudiate the claim on the basis of an inconclusive survey report; (ii) whether the expression "FFF" in the policy covered furniture, fixtures and fittings; and (iii) whether the insured proved the stock loss and whether the surveyor's assessment could displace the insured's documentary evidence, including the consequential question of interest.

Issue (i): whether the fire loss was an accidental fire covered by the policies and the insurer could repudiate the claim on the basis of an inconclusive survey report.

Analysis: The fire policies indemnified loss by fire and did not make liability contingent upon proof of the exact cause of ignition. Actual fire damage was supported by the police report, preliminary survey, photographs and other contemporaneous material. The final survey report did not record fraud, intentional setting of fire, or any finding that the insured caused the fire; it only disputed a short-circuit theory and suggested multiple seats of fire. In the absence of a finding of exclusionary conduct by the insured, the cause of fire was treated as immaterial and the insurer's repudiation as unsupported.

Conclusion: The fire was held to be accidental and the repudiation based on the survey report was rejected.

Issue (ii): whether the expression "FFF" in the policy covered furniture, fixtures and fittings.

Analysis: The policy description expressly referred to "FFF". That expression was read in the commercial context of the policy and could only mean furniture, fixtures and fittings. Ambiguity in a coverage clause had to be construed broadly in favour of the insured, while exclusionary reasoning could not be used to deny a risk plainly covered by the policy wording.

Conclusion: The policy was held to cover furniture, fixtures and fittings, and the insured was entitled to be compensated under that head.

Issue (iii): whether the insured proved the stock loss and whether the surveyor's assessment could displace the insured's documentary evidence, including the consequential question of interest.

Analysis: The insured produced stock statements, cost sheets, purchase orders, production movement records, cancellation emails, VAT returns, balance sheets and related contemporaneous business records. These materials were treated as sufficient base documents under the Evidence Act and were found to corroborate the claimed loss. The surveyor's uniform per-unit valuation, exclusion of non-identifiable goods, and deduction for depreciation and salvage were found to be unreasoned and perverse on the facts. The interest award granted by the National Commission was, however, modified in amount and commencement.

Conclusion: The insured's stock loss was accepted, the surveyor's contrary valuation was disbelieved, and the interest component was modified.

Final Conclusion: The insurer's challenge failed, the insured succeeded on the principal claim, and the only modification was to the rate and commencement of interest.

Ratio Decidendi: In a fire insurance claim, once actual fire damage is proved and there is no finding that the insured caused the fire or that an exclusion applies, the precise origin of the fire is immaterial; coverage clauses must be construed broadly, and contemporaneous business records may establish the quantum of loss where a surveyor's contrary assessment is unreasoned or perverse.

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