At around 3am on 12 June 2026, SCDF was alerted to a fire at 3 Gul Crescent, a warehouse in the Tuas industrial area. The building, roughly the size of a football field, was storing waste materials and chemicals. Eighty firefighters and 20 emergency vehicles were deployed, using seven water jets, two firefighting machines, and an aerial monitor. The fire was contained within the building and brought under control by around 8am. No injuries were reported. Neighbouring premises were not affected.
What happens next to the business that occupied that warehouse is the part the news report does not cover.
For an owner or finance lead, the lesson is not that fire is likely. It is that the part of the loss that closes businesses is rarely the building. It is the months of stopped revenue while fixed costs continue, and that is the part most policies under-insure.
Industrial fires are not rare events
According to SCDF's annual statistics, there were 125 fires at industrial premises in 2025, up 27.5% from 98 cases in 2024. Industrial fires formed part of 471 non-residential fire calls attended by SCDF in 2025, compared with 415 the year before. That is roughly one industrial fire every three days in Singapore.
Most SME owners in industrial estates treat fire as an unlikely event. The statistics suggest it is a predictable one.
What does property insurance actually cover?
A property insurance policy covers physical damage to the insured building and its contents from a specified event, including fire. If the warehouse structure is owned by the business, the policy pays to repair or rebuild it up to the insured sum. If the contents, including inventory, raw materials, machinery, or equipment, are damaged or destroyed, the policy pays to replace them up to the declared contents value.
Three things determine whether a property claim is settled well or badly.
The first is whether the building is insured at reinstatement value or market value. Reinstatement value means what it costs to rebuild the structure to its current specification at today's construction costs. Market value reflects what the property could be sold for. For industrial buildings in Singapore, these two figures can differ significantly. A policy written on market value may not pay enough to actually rebuild.
The second is whether the declared sum insured has kept pace with rising construction costs and the value of contents. A sum insured set three years ago reflects neither current rebuild costs nor current inventory values. Policies should be reviewed annually, not just renewed.
The third is the treatment of flammable materials and chemicals. If a business stores hazardous or flammable materials on the premises, this must be declared to the insurer at inception and renewal. A warehouse storing chemicals is rated differently from one storing finished goods. Failure to disclose the nature of contents stored on the premises is one of the most common reasons for a claim to be challenged or reduced. The Tuas fire explicitly involved chemicals and waste materials. That classification matters for the underwriting.
The gap that costs more than the fire itself
Physical damage is recoverable. The bigger financial exposure, and the one most inadequately insured, is business interruption.
After a serious fire, a business does not resume operations the next day. A warehouse that has been gutted requires structural assessment, regulatory clearance, rebuilding, refitting, restocking, and then the time to rebuild disrupted customer relationships and supply chains. In practice, a serious industrial fire can take six months to two years before a business is operating at its pre-loss level.
During that period, revenue stops. Fixed costs continue: rent or loan payments on the premises, salaries for retained staff, insurance premiums, overheads. Business interruption insurance pays the difference between what the business would have earned and what it actually earns during the period of recovery, up to the policy limit and the maximum indemnity period.
The two most common failure points in business interruption cover are the indemnity period and the sum insured.
An indemnity period of twelve months sounds reasonable. For a warehouse business that stores goods for clients under long-term contracts, or a manufacturer with complex supply chain dependencies, twelve months is frequently not enough to reach full recovery. Eighteen to twenty-four months is a more realistic benchmark for industrial businesses. If your policy has a twelve-month indemnity period and your actual recovery takes eighteen, the last six months of loss come entirely from your own reserves.
The business interruption sum insured is based on the gross profit of the business in the prior year, adjusted for the anticipated indemnity period. Many SMEs calculate this loosely or use the same figure year after year without adjusting for growth. If the business has grown but the sum insured has not, the claim will be proportionally reduced.
If your fire spreads to neighbouring premises
In the Gul Crescent case, the fire was contained within the affected warehouse. That is not always the outcome. Singapore's industrial estates, particularly older flatted factory buildings, house multiple tenants in close proximity. A fire originating in one unit can spread.
If your fire damages the premises, stock, or equipment of a neighbouring business, or causes a third party to suffer injury, you may face a claim for those losses. Property insurance covers your own losses. It does not cover claims by others against you. Public Liability insurance is the cover that responds to third-party claims arising from your operations or premises.
An SME Package policy typically bundles property, business interruption, and public liability into a single policy structure, which is why reviewing all three together at renewal makes more practical sense than treating each in isolation.
What should you review before your next renewal?
Check that the building is insured at reinstatement value, not market value, and that the figure reflects current construction costs. Confirm that all materials stored on the premises, including any hazardous, flammable, or chemical items, are accurately declared. Review the business interruption indemnity period against the realistic time it would take your business to rebuild and return to its pre-loss revenue level. Confirm that public liability is in place and that the limit is appropriate for the nature of your operations and the density of your industrial estate.
The three figures that decide whether a fire is a setback or an ending are the reinstatement value of the building, the business interruption indemnity period, and whether your stored materials were declared. Checking those before a loss, and setting the indemnity period against how long your business would realistically take to recover rather than a default twelve months, is the work we do.
TZY CO advises Singapore SMEs on industrial property and SME Package placement and renewal, with one adviser who reviews the whole package together rather than each cover in isolation. If the events at Tuas on 12 June are a useful prompt to review your own coverage, we are glad to work through it with you. If your operations involve moving or storing goods, our guide to Freight Forwarder Liability Insurance in Singapore may also be useful.
This article provides general information only. It is not insurance advice. Policy availability, terms, conditions, and exclusions vary by insurer and product, and cover is subject to the full policy wording. Please contact TZY CO for advice on your specific situation.