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to a certain periodical premium paid by the insured. Even though it cannot prevent the
fire, it assures the compensation of financial loss. The owners of cinema houses, godown,
business premises, residential houses etc. make the fire insurance so that, they can get
compensation if there’s any loss to them due to fire. The insured must prove that the loss
is caused by fire and by an accidental case for getting financial compensation. Otherwise
the compensation cannot be obtained.
The following are some of the important definitions of fire insurance:
According to M.N. Mishra,“Fire insurance is a device to compensate for the loss consequent
upon destruction by fire.”
According to Bill Weipers,“The basic intention of the fire policy is to provide compensation to
the insured person in the event of the being damage to the property insured.”
In conclusion, fire insurance may be defined as a contract between the insured and
insurer, under which the insurer agrees to indemnify the financial loss caused by fire to
the insured in consideration of a certain periodical payment called premium.

Key Point Fire insurance is an agreement between the insurer and insured under
which the insurer agrees to indemnify the losses caused by fire.

iii. Miscellaneous Insurance
There are other many types of insurance for different economic sectors. Some of
them are introduced below:
a. Vehicle Insurance
The insurance which is made to compensate the pre-
decided and accidental loss of motor or other vehicles,
which may be caused by theft, accident, or other losses
is known as motor insurance. The insurance provides
financial security of vehicles, loaded goods, passengers
and third party. Such insurance is compulsory in Nepal. Bus crash

Key Point The insurance which compensated the financial loss of vehicles or motors
due to accident, theft and other similar causes is called as vehicle insurance.

b. Employers’ Liability Insurance

There is risk of happening accident in the organization due to which the employee
may be unable to generate income or even die. So, to protect the dependent of the workers,
employment liability insurance is done. To get the compensation in this policy, employer
is liable to pay the premium regularly. This insurance helps to motivate the workers and
increase their efficiency.

Key Point The insurance which is done by the employer to provide financial
compensation to the employees in care of their accident, disability, injury
or death at the time of working is known as employer’s liability insurance.

92 Aakar’s Office Practice and Accountancy - 10 Financial Institutions 93