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Add on Covers
ADD ON COVERS(FIRE POLICY)
ADD ON COVERS(FIRE POLICY)
By Sunit Mathur
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Add on Covers
Standard fire and special perils policy can be extended toinclude ADD ON COVERS. Premium to be charged onPolicy Rate or rates given.
For mid term inclusion ofAdd on Covers annual premium
shall be charged. No refund of premium shall be made on Add on Covers being
Cancelled mid term unless the policy is cancelledsimultaneously or replaced by a fresh insurance includingadd on covers for an identical or increased amount.
Earthquake ,Terrorism, Spontaneous Combustion, andForest Fire are to be added (whenever such perils are opted)to the Policy rate for providing Add on Covers lik Architect,Surveyors & consulting Engineers Fee, removal of Debris,Deterioration of stock in cold storage , start up expenses etc.
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Architect, Surveyors & ConsultingEngineer Fees
Premium Rate:- Policy Ratei. In Excess of 3% of the adjusted loss.
ii. Expenses incurred for plans, specification, tenders,quantities & services in connection with thesuperintendence of the reinstatement for thebuilding, machinery & equipment.
iii. Cost in connection with the preparation of theinsured estimate of loss not covered.
iv. Premium rate same as applicable to the Standardfire & special perils policy.
v. Specified sum insured not exceeding 7.5% of claim
amount
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2. Debris Removal
Premium Rate :- Policy Rate.i. In Excess of 1% of the adjusted loss.
ii.
a. Removal of debris.
b. Dismantling or demolishing.
c. Storing up or propping.
iii. Item ii) b & ii) c to be deleted if building nor
machinery covered.iv. Premium rate same as Applicable to the StandardFire & special perils policy.
v. Specified sum insured not exceeding 10% of sum
insured.
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3. a) Deterioration of stocks in cold storagedue to accidental power failureconsequent to damage at the premises of
power station due to an insured peril
By change of temperature in consequence of
failure of electric supply at the terminal ends of
the electric service feeders from which the
insured obtains electric supply directly.
Due to damage caused by any peril insured to
property at insured premises or any electric
station or substation of public electric supply
undertaking from which the insured obtains
electric supply.
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Not liable for any deliberate act of Govt., Municipal or
Local authority or Supply authority not performed for
the sole purpose of safeguarding life or protecting any
part of the supply undertakings system or by theexercise by any such authority of its power to withhold
or restrict or ration not necessitated solely by damage
to the supply undertakings equipments by insured
peril.Duration of such failure should exceed 24 hours.
The burden of providing that damage is covered shall
be upon the insured.Premium rate will be 25% of the policy rate on sum
insured of stocks.
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Damage to property covered caused by change
of temperature in consequence of failure of
electric supply following damage to insureds
property due to insured peril(s).
Not liable for any deliberate act of govt.
municipal or local authority or supply authority
not performed for the sole purpose ofsafeguarding life or protecting any part of the
supply undertakings system or by the exercise
by any such authority of its power to with holdor restrict or ration not necessitated solely by
damage to the supply undertakings equipments
by insured peril.
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Duration of such failure should exceed 24
hours.
The burden of providing that damage is
covered shall be upon the insured.
Premium rate will be policy rate on sum
insured of stocks.
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Forest Fire
(4)(Premium rate Rs 5%0 minimum) Damage to the property directly caused by
burning whether accidental or otherwise of
forest, jungles, Bushes and clearing of lands byfire.
Premium Rate :-
Where loss experience for previous 5 yearsexcluding the expiring policy period is less than
30% a 50% discount on the rate may be
considered.
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Where loss experiene is above 60% the rate
should be adjusted in such a way that the loss
experience for the policy period worked out as
above in (i) be adjusted to 60% subject tomaximum rate of Rs.15%.
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Forest Fire
S.I Rs.2,40,00,000/-
Rate @ Rs.5%0 Premium
Rs.1,20,000/-
Period of Insurance Premium Incurred claim
01.04.1995 to 31.03.1996 Rs.1,20,000 1,00,000
01.04.1996 to 31.03.1997 Rs.1,20,000 1,20,000
01.04.1997 to 31.03.1998 Rs.1,20,000 1,40,000
01.04.1998 to 31.03.1999 Rs.1,20,000 60,000
01.04.1999 to 31.03.2000 Rs.1,20,000 1,80,000
6,00,000 6,00,000
01.04.2000 to 31.03.2001 Rs.1,20,000 1,00,000
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Incurred claim = Incurred claim * 100
Premium
=6,00,000 * 100 = 100%
6,00,000
Load the Premium so that it come 60%
6,00,000 * 100 = 60%
1,0,00,000
Premium payable at renewal = Rs.4,00,000/- +1,20,000 Total Rs.5,20,000
Rate = 5,20,000 * 1000 = Rs.21.66%0
2,40,00,000 MAX. Chargeable Rs.15%0
Premium payable = Rs.3,60,000/- for renewal
01-04-2001 To 31-03-2002
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(5)Impact damage due to insureds ownrail/road vehicles, fork lifts, cranes, stackersand the like and articles dropped there from.
Damage caused due to impact bydirectcontact to insureds property caused byinsureds own rail/road vehicles, fork lifts,
cranes, stackers and the like and articles
dropped there from.
Premium 5% of policy rate on policy suminsured.
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(6)Spontaneous Combustion
Loss or damage by fire only to the propertyinsured caused by its own fermentation, natural
heating or spontaneous combustion.
N.B By fire only must not be omitted underany circumstance.
Premium to be charged on Sum Insured of
relative commodity
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Premium Rates
Category I (low or non existment) 0.25%
Category II (moderate) 0.50%
Category III (variable) 0.75%
Category IV (high) 1.00%
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(7)Omission To Insure Additions, Alterationsor Extensions Clause
Policy covers Buildings and/or Machinery, Plant
and other contents (contents means furniture
and fittings excluding stocks) which the insured
may erect or acquire or may become
responsible:-
(a)At the within described premises.
(b)For use as factories.
Liability shall not exceed 5% of the sum insured
by each item in respect of (a) and 5% of the
sum insured by item no. in respect of (b).
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Premium rate shall be the policy rate on 5% of sum
insured on Building/Machinery/Furniture & fittings.
Premium as above should be collected in advance.
The insured shall inform the insurer of each additionalinsurance as soon as it comes to their knowledge and
shall pay appropriate additional premium from the
date of inception.
All new additions to Buildings &/or Machinery not
specifically insured/included during the currency of the
policy should be declared at the end of the year and
suitable additional premium paid on pro rata basisfrom the date of completion of the construction/
erections or additions may be suitably adjusted.
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If insured fails to declare values of such
additions within 30 days after the expiry of
policy there will be no refund of the advance
premium paid.
(8)Earthquake (Fire And Shock)
(a) If SFTI Group of Perils Peril is deleted:-
Covers loss (including loss by fire) due to
earthquake including Landslide/Rockslide
resulting there from but excluding flood or
overflow of the sea, lakes reservoirs and riverscaused by earthquake.
(B) If SFTI P il i t d l t d
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(B) If SFTI Peril is not deleted:-
Covers loss (including loss by fire) due toearthquake including Landslide/Rockslide
resulting there from but including flood oroverflow of the sea, lakes, reservoirs and riverscaused by earthquake.
Company shall not be liable for 5% of each andevery claim subject to Minimum of Rs.10,000/-.
Entire property in one complexcompound/location is to be covered and the S.I
should be identical to the main policy (exceptfor the value of plinth and foundation).
Onus of proof lies with the insured (if so
required by the company).
E th k Z R t
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Earthquake Zone Rate
I 1.00%0
II 0.50%0
III 0.20%0
IV 0.10%0
D lli ffi H t l Sh t (S ti
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Dwellings offices Hotels, Shops etc (Section
(III) 0.10%0 regardless of Zones.
(9)Spoilage Material Damage Cover
Perils causing the spoilage should be same as
those covered under the policy.
(ii)Cover to material damage i.e. (a)Loss of stock in process
(b)Damage to Machinery, Containers and
Equipments (including cost of removal of debrisand cleaning).
L d b il d t t d ti
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Loss or damage by spoilage due to retardationor interruption or cessation of any processcaused by any of the perils covered under the
policy subject to liability admitted under thepolicy.
Sum to be insured cover must be for all stocksand Machinery, Container and Equipment inspecified blocks, specified sums be declared foreach block and must be made subject toaverage.
Premium to charged on the value of stocks inspecified blocks @ 5 times the policy rate and2.5 times the policy rate on the value ofmachinery, containers and equipments inspecified blocks.
L k d C t i ti
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Leakage and Contamination(10)Cover
Cover for oils and chemicals only Cover to include the risk of :-
Accidental leakage and contamination
Accidental leakage (A)Where leakage and contamination cover
is granted:-
Physical loss of oils/chemicals by leakage fromits container by accidental means and allaccidental contaminations by contact withforeign matter.
EXCLUSIONS I fid lit di h t th
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EXCLUSIONS:-Infidelity or dishonesty on thepart of the insured/employees, shortage,
shrinkage, evaporation, mysterious
disappearance or unexplained losses or loss byburglary or theft not covered.
Loss resulting from processing or faulty
workmanship not covered.
Contamination due to improper handling or
controls by insureds own employees.
Loss of use, loss of earnings, delay or loss ofmarket or other consequential or indirect loss of
any kind.
(B)Where leakage cover alone is granted
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(B)Where leakage cover alone is granted
Physical loss of oils/chemicals by leakage from itscontainer by accidental means and all accidental
contaminations by contact with foreign matter EXCLUSIONS:-.
Infidelity or dishonesty on the part of theinsured/employees shortage, shrinkage, evaporation,
mysterious disappearance or unexplained losses orloss by burglary or theft not covered.
Loss resulting from processing or faculty workmanshipnot covered.
Contamination due to improper handling or controls byinsureds own employees.
Loss of use, loss of earnings, delay or loss of marketor other consequential or indirect loss of any kind.
S i l C diti (A li bl t A d B)
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Special Conditions (Applicable to A and B)
Before pumping and/or decantation operations
the insured shall arrange at their own expense
sampling and purity certification by competent,
approved and independent agency/surveyor for
such distinct lot, batch or tank load ex ocean
vessel of the insured subject matter and shallpump/decant only such material as is pure and
without contaminations (at insured expense).
I ti d tifi ti f t t
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Inspection and certification from competent,
approved and independent agency/surveyor as
to the cleanliness and fitness of the pipe lines,
pumping equipment and the receiving tanksprior to the commencement of pumping,
decanting, receiving and/or storage operations
(at insured expenses). Such certification should confirm that the
pumping, carrying and storage equipment
facilities and tanks are free from impurities,contaminants and/or residue or left over from
previous use of equipments, facilities or storage
tanks.
Fresh certification would be required in the event of
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Fresh certification would be required in the event of
the said tanks being empty and fresh stocks are
pumped/decanted in during the currency of the policy.
Certificate from a competent approved andindependent agency/surveyor as to the purity and
quality of the insured subject matter after receipt in
land tanks (at insured expenses).
Basis of valuation Market value at the time andplace of loss.
All losses during any one period of seventy two
consecutive hours caused by earthquake shock shallbe deemed to have been caused by Earthquake and
will constitute one loss. Insured shall select a time
from which any such period shall commence but no
two such selected periods shall over lap.
Each claim is s bject to an e cess of 1% on
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Each claim is subject to an excess of 1% on
each tank with a minimum of Rs.60,000/- each
loss.
Condition no 1 to 5 not applicable where
leakage cover alone is granted.
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Average Condition
Premium Rates Leakage cover Leakage andcontamination
cover
Where the tanks are
within insureds ownpremises
Rs.5%0 Rs.10%0
Where the tanks are
located elsewhere
Rs.6%0 Rs.12%0
Temporary Removal Of Stock
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Temporary Removal Of Stock(11)Clause
Stock not exceeding 10% of the total suminsured of stock is covered while temporarilyremoved to any other premises forfabrication/processing/ finishing or otherpurposes.
Pro Rata average condition will apply to thelimit of stocks temporarily removed as well as to
the total sum insured of such stock under thepolicy.
Rate:- 10% of the policy rate on sum insured on
stock.
(12)Loss of Rent Clause
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(12)Loss of Rent Clause
Rent payable if the building or part thereof is unfit for
occupation due to damage by the perils insured.
Amount of rent payable =
Period for reinstatement of the Bldg./
Term of the rent insured * S.I on Rent
Premium Rate 10% of Policy rate on sum insured onrent.
(13)Start up Expenses
Start up costs necessarily and reasonably incurred bythe insured upon a loss covered by the policy.
Premium Rate Policy Rate.
(14)Insurance of additional expenses of rent
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(14)Insurance of additional expenses of rentfor an alternate accommodation
For Non-Manufacturing premises.
Not to be granted under consequential loss
(fire) policy.
Max. Indemnity Period 3 years.
Additional expenses means additional rent
actually paid i.e the difference between the new
rent and the original rent.
Certificate from the local municipal authority or
an architect as a proof that premises are
untenantable.
Cover not for buildings of kutcha construction
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Cover not for buildings of kutcha construction .
The area for alternative accomodation must beequivalent to the area presently occupied. If
area is more then amount of rent payable. Area of the premises in the insureds occupation/XAdditional
rent
Area of the alternate accommodation taken by the insured
No restrictions of locality so long as thealternate accommodation is taken in the samecity/town.
For the owner occupant the standard rentbased on the rateable values fixed by Municipal/ Revenue authority for tax purpose may betreated as original rent.
It is compulsory for the owner occupant to
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It is compulsory for the owner occupant to
insure both building and contents.
Tenants to insure the contents.
If the insured is a tenant only and for
safeguarding his legal tenancy right is obliged
to pay rent for the premises even during the
period when it is not fit for occupation theadditional rent is the actual rent for the alternate
accommodation.
If the tenant is not obliged to pay rent during theperiod when it is not fit for occupation then
additional rent=Actual rent paid Minus Rent he
was paying.
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THANKS ANY ??????????????????