Property and Liability Insurance

Property and Liability Insurance
1.1 INTRODUCTION
Let us examine the oriin o! man" his habits and #ay o! li$in. %e li$ed in ca$es at the da#n
o! ci$ili&ation. %a$e #e e$er thouht as to #hy he searched !or a hidden place to li$e in'
The simple reason #as his instinct to do so. (an has al#ays been in search o! security and
protection. Perhaps to protect himsel! !rom #ild animals he chose to li$e in ca$es and to
!eel more secure" started li$in #ith tribes. )hy security' Ob$iously !or *uality o! li!e.
%uman needs are in the !orm o! pyramids. +asically there are t#o types o! needs, one is
basic or primary and other is secondary need. )hy are they in the shape o! pyramids'
That means that the needs are in order o! priorities.
%uman Needs
---------------------------I----------------
Primary Needs
I
I I
Cloth etc. .ecurity
.econdary Needs
I /inancial
.tatus etc.
In case o! primary needs li0e the supply o! oxyen" !ood" sleep etc." they are ne$er satis!ied.
.econdary needs li0e security" social status and esteem etc. do not crop up. (an does not
bother about primary needs as they are abundantly a$ailable. Need is !elt only #hen they
are not a$ailable. One !eels need o! oxyen #hen his throat is cho0ed. Normally nobody
bothers ho# oxyen is oin in. Once primary needs are met" one starts thin0in about
secondary ones.
1.1 )%2T I. IN.UR2NC3'
%uman bein is al#ays in search o! security and protection and his ure !or security is
tremendous. 2 continuous desire !or it had lead him to thin0 and de$elop the concept o!
insurance. %istorically" the idea o! insurance #as made in +abylonia and India at *uite an
early period. The pro$ision o! sharin !uture losses #as also ad$ised in the codes o!
(anu. In India" 2ryans shared loss or pro!it throuh their $illae co,operati$es. Thus man
has al#ays been in search o! security and protection.
In olden days" the insurance contract too0 the !orm o! a barain bet#een those people
interested in a marine ad$enture and those traders #ho #ere #illin to ta0e a share o! ris0
!or money, 4Premium4. (arine Insurance started #ith this. It re# in the 15th century
due to the increase o! trade.
Later on" indi$iduals or companies !ormed to underta0e assurances on human li!e and the
ris0 o! !ire. 2!ter 1677 +C" li!e and !ire business re# and prospered.
/ood
Unit 1 Introduction
Insurance is a business #hich protects the economic $alue o! an asset as e$ery asset has a
$alue. This asset may enerate some income and satis!y the needs o! the o#ner. /or
example" in a manu!acturin unit" production is sold and income enerated. In case o! a
motor $ehicle" it pro$ides con$enience in transportation and hence com!ort to society.
3$ery asset has some li!e span and is expected to per!orm durin it. The o#ner o! the
asset bein a#are o! this" ma0es alternati$e arranements at the end o! the li!e o! the asset
to ensure continuous !lo# o! income. %o#e$er" due to accident or any un!oreseen e$ent"
the asset may be destroyed or lost" #ith the result that the o#ner su!!ers. Insurance is a
mechanism that helps to reduce ad$erse conse*uences li0e these.
The leal de!inition o! insurance is that" it is a contract bet#een the insurer and the insured"
#hereby" in consideration o! the payment o! premium by the insured" the insurer arees to
ma0e ood any !inancial loss #hich the insured may su!!er due to the operation o! an
insured peril. This contract is o$erned by the Indian Contract 2ct" Insurance 2ct and
Common La#.
Activity A :
8i$e any t#o incidences !or #hich you !eel that insurance is certainly needed.
1.3 AIM AND NECESSITY OF INSURANCE _____________________________
The de$elopment o! miscellaneous 9accident: insurance is lin0ed #ith the Industrial
Re$olution. The social and economic chanes increased the ha&ards o! li!e and property"
i$in rise to miscellaneous accident insurance. The social" economic and en$ironmental
chanes a!ter )orld )ar II ha$e resulted in many types o! ne# co$eraes li0e oil" space"
computer" in!ormation and bio,technoloy. 2ne# concept o! pac0ae policy has been
introduced.
;arious liability policies are introduced to pro$ide indemnity to the insured in respect o!
the !inancial conse*uence o! leal liabilities. Increase in a#areness about the rihts and
lobali&ation" the complexity o! ris0s in today<s industries" commerce and public
en$ironments ha$e resulted in constant re$ie# and chanes in many types o! co$eraes.
.e$eral disasters" a$e rise to ne# liabilities. /or example" !lood losses in (aharashtra" an
earth*ua0e in =ashmir" the terrorist stri0es on 1 1
th
.eptember" 177 1 in 2merica" etc.
In 1777 +C" the concept o! General In!rance emered to support the !inancial
transactions in$ol$ed in o$erseas trade due to commercial lobali&ation
The basis o! insurance #as the sharin o! losses o! a !e# amonst many. This insurance
pro$ides !inancial stability and strenth to the indi$iduals and orani&ations by the distribution
o! loss o! a !e# amon many by" buildin a !und o$er a period o! time. 2ssets may be
destroyed or made non!unctional due to peril or accident" but they can be insured. /lood"
!ire" earth*ua0es" brea0do#ns are called perils. The ris0 is the damae caused to assets
due to these perils.
Ris0 is the only possibility o! loss or damae> it may or may not happen. There must be
uncertainty about the ris0" only tnen !s trie insurance is rele$ant. Tnere cannot insurance iT
there is no uncertainty about the occurrence o! an e$ent. The #ord ris0 may be used !or
exposure to daner" peril or loss producin e$ent. /or example" motor insurance co$ers
the ris0 o! accident" the!t etc. In case o! property insurance" the presence o! ha&ardous
material is treated as bad ris0 in the case o! !ire insurance .
Activity " #
List the assets in your house !or #hich insurance is re*uired.
1.$ T%E MEC%ANISM OF INSURANCE
People #ho are exposed to common ris0s come toether and share the loss and ma0e
ood to the person #ho su!!ers it. /or example" people usin motor $ehicles are exposed
to the ris0 o! road accidents" ?e#elers !ace the ris0 o! robbery" the!t and burlary. )ith
this" the ris0 is spread amon the society and the loss is reduced to a manaeable amount.
The loss is shared by each person proportionally and this share can be collected !rom the
members a!ter the loss has occurred or may be collected in ad$ance. Insurance companies
collect it in ad$ance and create a !und !rom #hich the losses are paid.
Unit 1 Intr&'!cti&n
2 human bein is also an income eneratin asset. This asset may be lost due to an
unexpected early death or the inability to earn due to disability as a result o! accident or
illness. I! an alternati$e arranement is not there" insurance ta0es care o! all the dependents.
Insurance does not protect the asset or pre$ent the loss due to peril or help to a$oid the
peril. It only reduces the impact o! the ris0 and compensates the loss. Only economic or
!inancial losses can be compensated.
Insurance co$ers tanible assets and intanible assets. 3xporters may su!!er losses due to
sudden chanes in the currency as a result o! political disturbances or economic chanes.
Doctors" contractors" chartered accountants may be held responsible !or nelience #hile
per!ormin their duties and the liability #hich arises is *uite substantial. These liabilities are
co$ered by the insurance company.
The concept o! insurance become popular because one can share the loss #ith other
people #ho are exposed to a similar ris0. 2lso" nobody deliberately causes damae to his
o#n property and as0s others to share the loss. Thirdly" the occurrence must be sudden"
accidental and !ortuitous in nature.
J$ Activity C:
4Insurance co$ers tanible as #ell as intanible assets.4 3xplain.
1.5 CONCEPT OF INSURANCE WORKING _____________________
The primary !unction o! insurance is to act as a ris0 trans!er mechanism. /or example"
there are thousands o! t#o #heelers in a to#n. .uppose ten $ehicles meet #ith an accident
in a year and cost o! repair is Rs. 17"7776, each> the total cost #or0s out Rs. 1"77"7776,
I! each o#ner o! the $ehicle contributes Rs. 1776, e$ery year" Rs.1"77"7776, #ill be
contributed to#ards the common !und and the loss paid !rom this !und. Thus the ris0 o! ten
people #ill be shared by a thousand.
The $alue o! a (ercedes +en& is Rs. 15"77"7776, and this is one o! the larest in$estments
made by the car o#ner. The car could be stolen" damaed in an accident or catch !ire.
There may be serious in?uries to the pedestrians due to accident.
%o# the car o#ner !ace these !inancial conse*uences' Insurance itsel! #ill not pre$ent
any o! abo$e ris0s !rom occurrin but can pro$ide some !inancial security. The o#ner o!
the car can trans!er the !inancial conse*uences o! the ris0 to the insurance company and in
return" pay a premium.
Thus sharin o! ris0s is the !undamental basis o! #or0in o! insurance.
1.( CREATION OF A COMMON )OO* _________________________________
2n insurer #ho does the business o! insurance and the insurance"brin toether people o!
common interest"collectin the share or contribution 9premium: !rom all o! them and payin
compensations 9claims: to those #ho su!!er a loss. The contributions ha$e to be enouh to
meet total losses in any year but in addition #ill ha$e to co$er the other costs o! operatin
the pool" includin pro!it to the insurer. 3$en ta0in into consideration all costs" insurance
is a still a $ery attracti$e proposition in most cases.
/rom an indi$idual point o! $ie#" insurance is an economic de$ice #hereby the indi$idual
can substitute a small cost 9premium: !or a lare uncertain !inancial loss that #ould ha$e be
borne i! insurance had not been a$ailable. It has t#o !undamental characteristics@
1) Trans!errin or shi!tin o! a ris0 !rom one indi$idual to a roup.
2) The sharin o! losses" on some e*uitable basis" by all the members o! a roup.
Thus people #ho su!!er a loss et compensated and #ho do not su!!er are relie$ed as they
ha$e abstain !rom losses.
The insurer manaes the common !und on behal! o! the society and ensures that no one
ta0es ad$antae o! it.
JS$ Activity D#
4The characteristics o! insurance are interdependent4. Is this a true statement' 3xplain
#ith reasons.
Unit Intr&'!cti&n
1.+
INSURA
NCE AS
SOCIA*
SECURI
TY
To #iden
the scope
o!
eneral
insurance
in the
national
economy"
the
industry
operates
.ocial
.ecurity
.chemes.
.ocial
security
and
social
insurance
is
included
in the
Indian
Constituti
on #ith
#or0men<
s
compens
ation"
personal
accident
insurance
" .ocial
.ecurity
.cheme
9P2..:"
.olatium
/und"
%ut
Insuran
ce
.chem
e" Crop
Insuran
ce" etc."
#hich
are
some
social
scheme
s
operate
d by
the
insuran
ce
industr
y.
.pecial
insuran
ce
scheme
s are
de$ised
at
subsidi
&ed
rates o!
premiu
m !or
rural
!amilie
s to
co$er
cattle
and
other
li$estoc
0 and
!or the
bene!it
o!
!inancia
l
institute
s and
other
sponsored
o$ernme
nt
schemes.
To
support
to the
o$ernm
ent"
$arious
insuranc
e
schemes
ha$e
been
introduce
d" li0e
+ha$ishy
a 2roya"
Aanata
Personal
2ccident"
Aan
2roya
etc.
2ccordin
to
national
policy"
the state
o$ernm
ent also
has to
ma0e
pro$ision
!or
sic0ness
and
disablem
ent. Thus
!or social
security"
the state
o$ernm
ent
passed
$arious
la#s
and the
use o!
compul
sory or
$olunta
ry
insuran
ce.
2ccord
in to
3mplo
yees
.tate
Insuran
ce 2ct"
the
expens
es !or
sic0nes
s"
disable
ment"
death
and !or
mainte
nance
o!
dispens
aries"
hospita
ls" etc.
!or
industr
ial
employ
ees
ha$e to
be
paid.
2ll
these
scheme
s are
help!ul to
the
communi
ty as a
#hole"
includin
!armers"
to
maintain
aricultur
al
productio
n and
hence
contribut
e to the
economi
c ro#th
o! the
nation.
$
Activity
E:
4The
insuranc
e
industry
has
achie$ed
a oal o!
.ocial
.ecurity
and
.ocial
Insuranc
e.4
Comment
.
1.,
RO*
E OF
INSU
RAN
CE IN
ECO
NOM
IC
DE-
E*O)
MEN
T
Insura
nce
plays a
$ery
$ital
role in
the
econo
mic
de$elo
pment
o! the
countr
y. /or
econo
mic
de$elo
pment"
in$est
ment is
$ital"
!or
#hich
sa$in
s are
needed
. 2
hue
amoun
t is
collect
ed by
#ay o!
premiu
m !rom
the
policy
holder.
This !und
is
in$ested
in
$arious
schemes
!or the
bene!it o!
society.
;arious direct and indirect bene!its are pro$ided by insurance to the indi$idual" his !amily"
industry" commerce" to the community and to the nation as a #hole. Insurance pro$ides
protection !rom loss to indi$idual and corporates" thus protectin the capital o! the industry
and releasin the capital !or !urther expansion and de$elopment o! business and industry
as a #hole.
It pro$ides stability to indi$iduals and orani&ations. 2!lourishin business can be brouht
do#n o$erniht due to some disaster. It is the insurance co$er #hich pro$ides security and
the !eelin o! psycholoical support. It stands by in odd hours by the side o! those insured.
It ta0es care o! !inancial institutionsBban0ers so that they can ma0e ad$ances or sanction
loans" as their assets ha$e been co$ered by insurance policies. It sa$es societies in the !ace
o! catastrophic losses.
Insurance companies established the Loss Pre$ention 2ssociation o! India #hich creates
a#areness !or loss pre$ention and pre$enti$e measures in $arious sectors o! economy"
thus increasin producti$ity and sa$in national #ealth.
It also closely associated #ith !ire and caro loss pre$ention" industrial and road sa!ety.
The sal$ae corps o! Loss Pre$ention 2ssociation o! India #or0s in collaboration #ith !ire
briades to sa$e property !rom damae by smo0e" #ater and heat.
Pre,acceptance sur$ey is also arraned" #hich suests and recommends $arious
impro$ements in the ris0" thus attractin lo#er rates and reducin the potential o! loss. /or
example" buildin a !ire proo! #all near the !urnace to protect the material !rom !ire damae"
or installin a burlar,proo! sa!e in the ban0 to a$oid robbery and the!t.
Indian insurance industry operates in more than C7 !orein countries and earns !orein
exchane.
In a nutshell" insurance acti$ities pro$ide a bi support to industries" businesses and
orani&ations and help in the de$elopment o! economy o! the country.
.ince insurance companies are sellin a promise to stand on the side o! insured" it is
important !or the insurer to come up to the expectations o! the client. Insurers should
remember that they are sellin promises , on paper , to standby in odd hours. )ith this"
the responsibilities o! insurance companies become multi!old.
Unit 1 Intr&'!cti&n
JS$ Activity F#
4Insurance plays a $ital role in the economic de$elopment o! a country.4 .tate your $ie#s.
1.. SUMMARY _______________________________________________________
In this unit #e ha$e discussed ho# the concept o! insurance de$eloped. It pro$ides one o!
the basic needs o! human beins. +asically" insurance is the sharin o! the losses o! a !e#
amon many.
)ith $arious policies" insurance pro$ides !inancial stability and security to the indi$idual
and society as a #hole.
it contributes in the economic de$elopment o! the country throuh a lare in$estment o!
!unds accumulated throuh premiums. Throuh o$erseas business" it helps to increase the
!orein exchane o! a country.
1.1/ 0EY 1ORDS
2cci'ent
Clai3 A3&!nt
C&ni'erati&n
C&ntract &4 In!rance
2ny un!oreseen and unexpected e$ent is considered an
accident. /or insurance purposes" it has to be due to external"
physical and $iolent means.
It is the amount payable by the insurer under a policy on a
claim arisin.
Price" to0en" or other matter used as an inducement !or the
completion o! a contract" as an insurance premium.
2n areement bet#een the insurer and one or more parties"
called the insured" #hereby the insurer underta0es to pay to
the insured a certain sum o! money or to rant certain
compensation on the happenin o! a speci!ied e$ent" in return
!or the payment o! a certain consideration" called the premium.
Insurable Interest
Insurance
In!rance C&35any
In!rance Entitie
2n interest #hich miht be damaed i! the peril insured aainst
occurs> the possibility o! a !inancial loss to an indi$idual #hich
can be protected aainst throuh insurance.
2n economic de$ice #hereby the indi$idual substitutes a small
certain cost 9the premium: !or a lare uncertain !inancial loss
9the continency insured aainst: #hich #ould exist i! it #ere
not !or the insurance contract> an economic de$ice !or reducin
and eliminatin ris0 throuh the process o! combinin a
su!!icient number o! homoeneous exposures into a roup in
order to ma0e the losses predictable !or the roup as a #hole.
1 : 2n orani&ation chartered to operate as an insurer.
1: 2ny corporation primarily enaed in the business o!
!urnishin insurance protection to the public.
2ny corporate body or indi$idual #hich is operatin as an
insurer" re,insurer or insurance intermediary and #hich is
sub?ect to insurance reulation.
ctDE ddFG
In!rance )&licy
In!re'
In!rer
*l&y'
Leal document issued to the insured settin out the terms o!
the contract o! insurance.
The person to #hom or on #hose behal! bene!its are payable
under the policy.
2licensed leal entity" #hich under#rites insurance" includin a
mutual insurance company 9but note the exemption o! pure re,
insurers:.
2 $oluntary unincorporated association o! indi$iduals orani&ed
!or the purpose o! #ritin insurance> normally re!ers to Lloyd<s
o! London" a roup o! indi$idual under#riters and syndicates
that under#rite insurance ris0s se$erally" usin !acilities
maintained by the Lloyd<s o! London Corporation.
Unit 1 Introduction

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8.1 INTRODUCTION
No indi$idual" !irm" orani&ation or society can 0no# all that the !uture holds. Uncertainty
is a !undamental truth o! li!e. To a common man" uncertainty and ris0 are synonymous.
Indi$iduals and !amilies are exposed to the chances o! loss due to disease" accidental
in?ury and death" unemployment etc. /irms may su!!er loss due the destruction o! property"
mar0etin ris0" !inancial ris0" distribution ris0 and so on. The ris0 is inherent in de$eloped
and de$elopin countries. %uman li!e and material possessions are $ulnerable to losses or
to damae by a number o! destructi$e !orces. It is beyond doubt to say that there is a reat
deal o! uncertainty in li!e" commerce and industry. It is not that man is una#are o! uncertainty
about #hat the !uture holds !or him , he is $ery #ell con$ersant and hence exhibits a stron
desire !or security both !or li$es and material possessions. The ure !or security is satis!ied
only #hen one ta0es all possible precautions to a$oid the conse*uences o! ris0. Inspite o!
this" accidents do occur.
The dictionary meanin o! ris0 is chances o! in?ury" loss or damae. In simpler terms" the
possibility o! ad$erse result !rom any e$ent or occurrence is termed as ris0. Ris0 arises out
o! uncertainty. I! uncertainty is 0no#n there is no ris0.
8.8 RIS0 AND UNCERTAINTY
Uncertain e$ents !all into t#o broad cateories. The !irst cateory is those !or #hich the
probability o! occurrence is calculated either on a priori rounds or throuh the statistical
analysis o! a series o! similar e$ents #hich ha$e occurred in the past. The remainder does
not ha$e such measurements because they are uni*ue in nature. The !irst roup is called as
RI.=. and latter is called as UNC3RT2INTI.
Ris0 can be de!ined in many #ays as !ollo#s
J Ris0 is the possibility o! an un!ortunate occurrence.
J Ris0 is a combination o! ha&ard.
J Ris0 is an uncertainty o! loss.
J Ris0 is the possibility o! loss.
There are di!!erent le$els o! ris0. 2ll ris0s do not al#ays occur. .ome are ris0ier than
others.
Let us imaine a house by the side o! the ri$er. This ri$er al#ays o$er!lo#s its ban0s. This
is ris0y as there is uncertainty reardin the o$er!lo# o! the ri$er and damae to the house.
Unit 1 Conceptual /rame#or0 o! Ris0
The !act is that the ri$er is 0no#n !or !loodin and so !re*uency o! damae #ill be hih and
so it is ris0y.
I! #e imaine a second house #hich is on a sliht hill and !ar !rom the ri$er ban0" it is less
ris0s. The possibility o! !loodin #ill not be altered but the chances o! damae to the house
are lo#er. .o #hen #e consider a ris0" it must be reconi&ed that it is a combination o!
e$ent, occurrence and it can cause damae.
/or examples" Ri96 accidental death" in?ury" loss due to !ire" !lood" etc.
Uncertainty6 unexpected ain" lare #ins on !ootball pools.
Three points may be made reardin the nature o! uncertain e$ents@
J the occurrence o! some e$ents may result in either ain or loss" #hereas others cause
only loss>
J some e$ents are the results o! human beha$iour" others are beyond human control>
J o! those e$ents #hat can be the results o! human action 9or inaction:"
In some cases the oriinator and the $ictim are the same person" #hereas in other cases
they di!!er.
&$ Activity A#
2 !irm has launched a ne# soap in the a mar0et. List the ris0s and uncertainties !aced by
the !irm.
There can be the !ollo#in types o! ris0s
Clai4icati&n &4 ri9
1 )!re
S5ec!lative
3 $
Dyna3ic Static
Fi: 8.1
i i
; (
F!n'a3ental )artic!lar
No# let us study the ris0s in detail.
8.3 4U0<i= 3>! &> A?-@-<A?BB.B ,
;i
Those ris0s in #hich the occurrence o! the e$ent results in a loss #ith no possibility o! ain" i
4 ,?,,,,,^c,i, i
)!re ri9 in$ol$e a loss" hence the outcome can only be un!a$orable.
4!reriMv 3v!ivC DAB?=_____
The ris0 o! motor accident" !ire at a !actory" the!t o! oods !rom a store" in?ury at #or0 are
all pure ris0s. There is no possibility o! ain in this situation. There #ill be accident" !ire"
the!t" in?ury or not. I! the e$ents do not ta0e place then the situation is unaltered and no one
has ained.
There are ris0s #hich insurers o!!er to insure. In such situations" there may or may not be
the possibility o! loss. +ut !or certain cases" there is no ain to the insured or the insurer.
/or example" storms and motor accidents. .ome ta0e insurance policies !or their motors
or !actories" incase there is a !ire in the !actory or that policy can o claim !ree. 2 motor car
may meet #ith an accident durin the currency o! policy or may o claim !ree throuhout
the currency o! policy. +ut no one stands to ain out o! this incident.
Classi!ication o! pure ris0s
aE )er&nal ri9@ 2n indi$idual has to !ace the !ollo#in pure ris0s@
i: Unemployment
ii: Premature death
iii: Dependent old ae
i$: .ic0ness or disability.
FE *iaFility Ri9:
Unintentional in?ury to other people or damae to others< property due to nelience or
carelessness. c: Ri9 ariin: 4r&3 4ail!re &4 &tGer:
Ris0 o! obliation may arise due to the !ailure o! others.
8.3 )URE AND S)ECU*ATI-E RIS0S
'E )r&5erty Ri9@ Direct losses or conse*uential losses@
The ris0s #hich are not o! an indi$idual nature are also called pure ris0s.
J The loss o! property.
J Loss o! use o! property.
J 2dditional expenses due to loss o! property.
S5ec!lative Ri9 :
Those ris0s #here the outcome may be either a pro!it or a loss" the ris0 is called speculati$e
ris0. These are those ris0s #hich insurance companies re!use to accept. In these" there are
chances o! ain. /or example" chanes in !ashion" all amblin transactions" either pro!it or
loss 9e$ents:" in$estin o! money in shares.
In the #orld o! business" there are both" pure and speculati$e ris0s. Let<s loo0 at a case
study to understand the pure and speculati$e ris0s o! a !ood manu!acturer. %e has a lare
!actory #ith sophisticated machinery and production lines. %e produces a rane o! !oodstu!!s
!or domestic use and !orein export. Let us loo0 at some o! the ris0s to #hich he is
exposed.
)!re Ri9 :
J There could be damae to the !actory" machinery and stoc0 due to !ire" storm" !lood"
malicious damae or any other peril.
J The manu!acturer is also exposed to the ris0 o! the!t o! !inished stoc0" ra# material or
e$en machinery.
J There may also be liability due to in?ury to employees" $isitors" or !or in?ury or su!!erin
due to consumption o! products.
J (achinery may brea0 do#n and ta0e time to repair or replace" thus in$ol$in the
cost o! repair" the loss o! production resultin in loss o! pro!it.
S5ec!lative Ri9 :
J )ron pricin o! the product may render the product uncompetiti$e" or not yield
su!!iciently hih returns and thus not result into increase o! pro!it.
J (ar0etin decisions are also speculati$e ris0s as correct interpretation o! the mar0et
enerates pro!its. I! not" it leads to loss.
J 2ny decision reardin expansion" ac*uisition or di$ersi!ication" may result in pro!it
or loss.
J Pro$idin credit to the customers is also ris0y as althouh the oods are sold" customers
may not pay.
.o the #orld o! business is !ull o! ris0 and uncertainty. )hile stressin the di!!erences
bet#een pure and speculati$e ris0s" let<s hihliht the !act that H5!re ri9 are n&r3ally
in!raFle CGile 5ec!lative ri9 are n&t in!raFle.H
=
JS$ Activity "#
)rite do#n t#o examples each !or pure and speculati$e ris0s.
8.$ DYNAMIC AND STATIC RIS0S
Dyna3ic ri9:
These arise !rom the chanes that ta0e place in e$ery society" #hich are the economic"
social" technoloical" en$ironmental and political chanes. Chanes in the price le$el"
consumer tastes" income and output" urban unrest" technoloical chanes #hich cause
!inancial loss to the members o! the economy" are examples o! this.
In the lon run" dynamic ris0s are bene!icial to society as they are due the result o! ad?ustments
to the misallocation o! resources. These are less predictable as they a!!ect the society at
lare and do not occur reularly.
Dynamic ris0s are closely related to speculati$e ris0s.
Static Ri9 :
They occur e$en i! there is no chane in the economy. These losses occur !or reasons
other than the chane in economy" such as material damae to property" loss in business
pro!it due to !ire" dishonesty o! the other indi$idual" etc.
.tatic ris0s do not i$e any pro!it to society. They in$ol$e losses due to the destruction o!
assets" human !ailure" or chane in possessions due to dishonesty. .tatic ris0s are predictable
because they occur reularly.
That is #hy static ris0s are insurable #hile dynamic ris0s are not insurable.
JS$ Activity C:
2!ter a mar0et sur$ey" a biscuit manu!acturer launched a product #ith both" a s#eet and
a salt taste. 2!ter a !e# months" he !ound that suddenly" tastes had chaned to biscuits
mixed #ith chocolate. Identi!y the ris0s !aced by the manu!acturer.
1.K FUNDAMENTA* AND )ARTICU*AR RIS0S
isons
siness
These are the ris0s #hich a!!ect the #hole o! society or a ma?or part o! it. These in$ol$e
losses that are impersonal in cause and e!!ect. /undamental ris0s are those #hich arise
!rom causes outside the control o! any indi$idual or e$en a roup o! the indi$iduals. It
includes uncertainties #hich arise due to political inter$ention" economical and social chanes"
#ar" !lood" earth*ua0es" !amine" $olcanoes and other natural disasters. 2ll are impersonal
in both" cause and e!!ects.
)artic!lar Ri9:
These ris0s mainly a!!ect the indi$idual or !irm rather than a roup. It in$ol$es losses that
arise out o! indi$idual e$ents and !rom !actors o$er #hich he may be exert some control.
They
may be
static or
dynami
c in
nature.
/or
examples" the burnin o! a house" robbery o! a house" motor accidents" !ire" the!t" #or0
related in?ury.
It may be arued that society should accept responsibility !or losses incurred by an indi$idual"
arisin !rom !undamental ris0s. 2n indi$idual has to ma0e his o#n arranements !or dealin
#ith particular ris0s. O$er time" di$ision bet#een !undamental and particular ris0s ha$e
chaned. In the past" unemployment #as rearded as a personal matter" but no# a days is
reconi&ed as the responsibility o! the o$ernment.
.imilarly" In?ury in motor accidents" in?ury at #or0 and in?ury caused by !aulty products
,in each o! these cases" society has decided that those #ho are in?ured should be able to
recei$e !inancial compensation. .uitable leislation has been passed to ensure that suitable
insurance is in !orce or that #ho are in?ured need not ha$e the burden o! pro$in the !ault.
/undamental ris0s are caused due to conditions #hich are not #ithin the control o! the
indi$iduals #ho su!!ers the losses #ithout !ault. It is arued that society should collecti$ely
ta0e responsibility !or such losses and so social insurance is there !or such losses. /or
example" the 4%it and Run4 scheme. Particular ris0s are insured indi$idually" thouh some
!undamental ris0s li0e earth*ua0es are co$ered by indi$idual insurance.
& Activity D:
4/undamental ris0s are normally so uncontrollable" #idespread and indiscriminate that it is
!elt they should be the responsibility o! society as a #hole.4 Comment.
JS$ Activity E#
List the $arious ris0s !aced by the o$ernment as #ell as indi$iduals" due to the hea$y rains
o! 1LM Auly" 177K in (umbai.
8.( C%ARACTERISTICS OF INSURA"*E RIS0 ________________________
Insurance is a contract bet#een the insured and the insurer. The leal riht to insure"
arisin out o! the !inancial relationship reconi&ed under la#" bet#een the insured and the
sub?ect matter o! insurance.
Characters o! insurable ris0s are as !ollo#s@
1. It G&!l' Fe 3ea!raFle in ter3 &4 3&ney: .ometimes the mar0et $alue is less
than the sentimental $alue o! a product" but the sum insured !or the purpose is e*ual
to the mar0et $alue as the sentimental $alue cannot be measured in terms o! money.
/or example" paintins" #or0s o! art" anti*ue pieces" etc..
;aluation !rom pro!essional experts is the basis !or sums insured in all these cases"
because the sentimental $alue is more than mar0et $alue.
3) TGere G&!l' Fe 5!re ri9 @ 2!ter the occurrence o! a certain e$ent" the o#ner
must su!!er loss #ith no possibility o! ain. /or example" the!t" burlary" lihtenin"
!ire. There is no element o! ain in any o! these situations and the outcome can only be
un!a$ourable to us.
4) It G&!l' n&t Fe a:aint 5!Flic 5&licy: I! any matter is pro$ed danerous or
catastrophic to society" then it cannot be insured. /or example" i! a percentae o!
alcohol in a dru is more than speci!ied by the dru association" then the public
liability policy is not issued as it is danerous to health.
5) E>itence &4 tGe !FIect 3atter &4 tGe in!rance : The insurance is i$en to a
sub?ect matter #hich is in existence and not to !ictitious and imainary ob?ects. /or
example" !or a common man" an Indi$idual Personal 2ccident Policy to co$er a
?ourney to the moon is not possible.
6) Occ!rrence &4 tGe inci'ence G&!l' Fe acci'ental: Loss o! property must be
due to accident and it should not be intentional. /or example" suicide or attempted
suicide is not co$ered.
7) TGere 3!t Fe &3e 5r&5erty= ri:Gt= interet &r 5&tential liaFility ca5aFle &4
Fein: in!re'@ Chanes in price le$els cannot be insured as due to this" there may
be loss or ain. /or example" political chanes can brin reater o$ernment
inter$ention in employment" mar0etin" in$estment and thus these cannot be insured.
8) TGe in!re' 3!t tan' t& l&e in cae 5r&5erty i 'a3a:e': The basic principle
o! insurance is insurable interest. It must be obser$ed #hile ta0in insurance and a
loss should be su!!ered #hen property is damaed. /or example" !ire in a !actory"
the!t o! money. In all these cases" there is the possibility o! loss.
,. E>itence &4 a le:ally en4&rceaFle relati&nGi5: There must be a leal riht to
insure some property. This insurable interest may arise due to common la#" by contract
or by status. /or example" the corporation has i$en permission !or a se$en story
buildin" but the builder built a nine story buildin illeally" hence the illeal construction
cannot be co$ered under insurance.
J$ Activity F:
8i$e t#o examples !or each o! the characteristics o! insurance.
1.6 1AYS OF %AND*ING RIS0S
.e$eral methods are in e$eryday use !or the handlin o! both" pure and speculati$e ris0s.
They include a$oidance" ris0 reduction" ris0 retention" combination" trans!er" headin and
research.
1. Av&i'ance@ 2$oidance is the most drastic #ay o! handlin ris0. It in$ol$es ceasin
to underta0e the acti$ity #hich creates the ris0" or per!ormin it in another #ay or at
some another place. /or example"
L 2n escape o! hihly toxic as may be so catastrophic that a chemical !actory
may decide to a$oid this ris0 by ceasin to produce or use it.
iL 2 ris0 o! damae by !loodin may be a$oided by mo$in to another site #ell
abo$e recorded !lood le$els.
iii. 2 !irm may see0 to a$oid the ris0 o! employees bein attac0ed #hen carryin
#aes in cash !rom the ban0 by chanin o$er to payment by che*ue or by
credit trans!er.
& Activity G:
)rite do#n examples o! situations in #hich ris0 cannot be a$oided and hence you ha$e
per!ormed it in another #ay so that the ris0 #as minimi&ed.
8. Ri9 Re'!cti&n @ It co$ers all methods employed to reduce either the probability
o! the occurrence o! loss,producin e$ents or the potential si&e o! losses that do
occur. It is rarely possible to totally eliminate a ris0. /or example"
i. (achine uards desined to pre$ent operati$es comin into contact #ith mo$in
parts.
ii.
.
$.
.a!ety $al$es on pressure $essels reduce the chances o! accidents. )earin a car seat belt
#hile dri$in reduces the se$erity o! the accident. /ire proo! #all near the !urnace to a$oid !ire
spreadin to a nearby location.

Jat Loss,reduction acti$ity is a continency plannin to minimi&e the extent o! losses caused
by occurrence o! loss producin e$ents. 2lso in case o! emerencies" people should trained
to handle the situation. /or example" alternati$e arranements should be there !or po#er
or material supply or manu!acturin !acility.
The abo$e steps ha$e to be ta0en to a$oid losses or reduce their !re*uency o! occurrence
or se$erity" but some possibility remains o! loss producin e$ents #hich can be handled by
usin the !ollo#in methods.
$ Activity %:
/ind out t#o examples in #hich the ris0 is reduced by usin mechanical de$ices.
3. Ri9 Retenti&n@ The easiest and o!ten the cheapest #ay o! dealin #ith relati$ely
small losses is to pay !or them out o! one<s o#n resources #hen they occur" or
possibly to set aside a continency !und to pay !or lare losses.
.uch a retention o! ris0 may either be a deliberate decision or the result o! a !ailure
either to reconi&e that such a ris0 exists" or to deal #ith it in some other #ay. 3$ents
o! hih !re*uency and lo# se$erity !all in the sel! retention cateory. /or example"
L .mall shop0eepers retain the losses instead o! payin the insurance premium.
ii. Only bi machines o! hih $alue are bein insured and losses due to small machines
are retained by corporate clients.
iii. The excess imposed by insurance companies is a !orm o! retention to bear small
losses to the insured.
?Acti vi ty I:
48enerally !leet o#ners create a !und to pay !or small losses instead o! payin a premium.
43xpress your $ie#s.
$. C&3Finati&n@ +y combinin a lare number o! independent exposure units in one
port!olio" an insurance company is able to share the losses o! a !e# amon many. +y
collectin money" a sort o! a pool o! !unds is prepared and out o! this" the loss is made
ood. /or example"
i. 2 lare retail roup" by centrally poolin the ris0 o! brea0ae o! it<s shop
#indo#s" can a!!ord to carry the ris0 by itsel! instead o! insurin.
ii. 2 housin society collets chares !rom all members e$ery month and i! there is
!ailure o! #ater supply to anybody<s house" can bear the expense !rom this !und.
yT Activity .T :
.uest any plan #hich uses combination as a #ay o! handlin ris0" so that losses can be
paid throuh it.
;. Tran4er@ Ris0s may be trans!erred in t#o #ays. 2 !irm may see0 to trans!er the
acti$ity #hich creates the ris0s" or contractual arranements may be made to trans!er
responsibility !or any losses !rom one party o! the contract to the other party. /or
example"
i. 2 ci$il enineerin contractor may sub,contract particularly ha&ardous ?obs li0e
under#ater operations" to a specialist !irm.
ii. 3xclusion and indemnity clauses in contracts o! sale" buildin etc. are common
examples.
iii. The most important !orm o! ris0 trans!er is insurance.
(. %e':in: @ /irms that enter into contracts to supply oods at !ixed prices in the
!uture" !ace the ris0 that a rise in prices bet#een enterin into the contract and the
deli$ery date may in$ol$e them in a loss. In such cases" some protection can be
obtained by hedin aainst exchane mo$ements by enterin into !or#ard contracts.
/or example"
The !orein exchane reulation o! India permits importers to enter into the !or#ard
purchase o! speci!ic !orein currencies !or a speci!ied period. Then" reardless o! the
exchane rate pre$ailin on the date o! payment" the importer<s liability #ill be limited
to the cost o! purchasin the !orein currency at the time o! enterin into the !or#ard
purchase contract" thus limitin his loss" i! any.
+. ReearcG@ Research desined to impro$e the in!ormation on #hich decisions are
ta0en" can help to reduce ris0. /or example"
i. (ar0etin o! a ne# product may see0 to reduce the uncertainty by conductin
mar0et research.
iL 2 search !or ood pac0in material reduces the ris0 o! e$aporation o! $olatile
substances.
Activity 0:
Identi!y the ris0s in a chemical !actory and i$e your suestions reardin handlin these
ris0s.
8., SUMMARY
___________________________________________________________________
In this unit" #e ha$e learnt #hat is ris0 and #hat is uncertainty. Ris0 may be classi!ied into
pure" speculati$e" dynamic" static" !undamental and particular. )e ha$e discussed in detail
about these ris0s #ith the help o! $arious examples.
D
)e ha$e also discussed the essential characteristics o! insurable ris0.. These are necessary
to obtain insurance.
;arious #ays o! handlin ris0s ha$e also been introduced. 8enerally" in practice" t#o or
more methods may be employed in handlin ris0s.
/or example" loss pre$ention and insurance are usually complements" not substitutes.
2lthouh a !irm may spend a lare amount to reduce the incidence or se$erity o! industrial
accidents" the employer<s liability must be to insure.
8.. 0EY1ORDS
Dyna3ic Ri9
)!re Ri9
Ri9 S5ec!lative
Ri9
Those ris0s #hich results !rom chanes in economy.
2 condition in #hich there is the possibility o! either loss or
no loss.
2d$erse results !rom any occurrence is called as ris0. 2
condition in #hich there is a possibility o! loss or ain.
Static Ri9 ty5e &4
Ri9
Ty5e &4 Gan'lin:
Ri9
Uncertainty
@ Those ris0s #hich result in other than chanes in economy. @ Pure"
speculati$e" dynamic" static" !undamental" particular.
@ 2$oidance" ris0 reduction" retention" combination" trans!er" hedin and
research.
@ Losses #hich are due to uni*ue e$ents.
8.1/ SE*F6ASSESSMENT 7UESTIONS
itutes.
strial
H1. )hat do you understand by the term 4Ris04' %o# is it di!!erent !rom uncertainty'
)hat are the characteristics o! insurable ris0'
H1. %o# do you di!!erentiate bet#een Pure Ris0 and .peculati$e Ris0' )hy don<t
insurers insure speculati$e ris0'
HC. Discuss at lenth the methods to handle ris0s. Can #e eliminate ris0s' 3xplain.
H5. /ill in the blan0s@
a: Insurers do not insure-products.
-------!re*uency and-------se$erity !all in the sel! retention
o! ris0.
also.
9) In speculati$e ris0" there can be
10)______Pure ris0s may result in
HK. (atch the !ollo#in@
b: 3$ents o!---
cateory.
c: Insurance is.
or
1) Tradin ris0
2) Impersonal in nature
3) Insurance
4) No ris0
5) Insurable ris0.
1
1)
T
ra
ns
!er o! ris0
12) Chane in !ashion
13) /undamental ris0
14) Pure ris0
15) =no#n e$ent
HL. )rite t#o examples o! each@
16)Pure ris0
17).peculati$e ris0
18)Particular Ris0
19)/undamental Ris0
20)Dynamic Ris0
21).tatic Ris0.
: Ris0 a$oidance"
h: Reduction.
i: Trans!er" ?:
Retention.
3.1 INTRODUCTION
2 contract may be de!ined as an areement bet#een t#o or more parties to do or to
abstain !rom an act and this areement is intended to create a leally bindin relationship.
This could be summari&ed as <an areement desined to ha$e leal conse*uences<. 2ll
contracts" includin the insurance contracts" are o$erned by the eneral principles o! the
la# o! contract as codi!ied in the Indian Contract 2ct" 1N61. This 2ct pro$ides that all
contracts must ha$e certain essential elements in order to be leally $alid. Insurance contracts
are also sub?ect to the essential elements applicable to any commercial contract. %o#e$er"
insurance contracts ha$e certain peculiar or special characteristics #hich ha$e led to the
de$elopment o! a special body o! common la#. These special leal principles #hich e$ol$ed
under the common la#" relate to@
9i: the existence o! insurable interest to support the insurance contract.
9ii: compensation or indemnity !or actual loss" and no more" under the insurance contract.
9iii: obser$ance o! utmost ood !aith by both parties to the contract.
C.1 NATURE OF INSURANCE CONTRACTS ______________
2 contract o! insurance is an areement #hereby one party" called the insurer" underta0es" \
in return !or an areed consideration" called the premium" to pay the other party" namely"
the insured" a sum o! money or its e*ui$alent in 0ind" upon the occurrence o! a speci!ied ?
e$ent resultin in loss to him.
3.3 E*EMENTS OF INSURANCE CONTRACTS
2ll contracts" includin insurance contracts" must ha$e the !ollo#in essential elements in ?
order to be leally $alid@
1E O44er an' acce5tance
Li0e any other contract" the contract o! insurance is completed #hen one party ace the
o!!er made by the other party. The o!!er usually comes !rom the proposer andt o!!er
is 0no#n as the proposal. The proposal may be made orally" on the telephone? or it
may be made in #ritin" by means o! a letter or by means o! a proposal !orm. I !ire
insurance" proposal !orms are in$ariably used. .eparate !orms are usedl
residential premises" o!!ices" shops and !or industrial ris0s" odo#ns etc. !ort
con$enience o! the proposer. In accident insurance too" the o!!er is in$ariably re*u to
be made by the completion o! a proposal !orm. Insurers indicate acceptanceO@
UnitC 3ssential /eatures and /undamentals o! 8eneral
Insurance
the issue o! a co$er note or a letter o!
acceptance. In the latter e$ent" the
acceptance letter becomes another o!!er
#hich is accepted by the payment o!
premium by the insured.
1: C&ni'erati&n
No contract is $alid unless there is due
consideration. Consideration is the 4act
or promise o!!ered by one party and
accepted by the other as the price o! that
other<s promise.4 Consideration consists
o! some pro!it or bene!it accruin to the
one party or some loss or responsibility
su!!ered or underta0en by the other. In
the case o! insurance contracts" <premium<
is the consideration !rom the insured and
the <promise to indemnity< is the
consideration !rom the insurer. 2ccordin
to the Insurance 2ct 1PCN as amended in
1PLN" prior payment o! premium is a pre,
re*uisite !or assumption o! co$er by
insurers.
C: A:ree3ent FetCeen tGe 5artie
This is the principle o! 4consensus ad
idem.4 +oth parties should be o! the
same mind. In other #ords" there must be
consent arisin out o! a common
intention. /or example" i! the proposer
desired a (ediclaim insurance" and the
insurers issued a personal accident
policy" there is no consent arisin out o!
common intention. I! the contract is
entered into #ith an intention to decei$e the
other party or #ith a !raudulent intention"
then the contract becomes $oid.
5: Ca5acity &4 tGe 5artie
2s per the Indian Contract 2ct" e$ery
person is competent to contract #ho is o!
the ae o! ma?ority accordin to the la# to
#h
ich
he
is
su
b?e
ct
an
d
#h
o
is
o!
so
un
d
mi
nd
an
d
is
no
t
dis
*u
ali
!ie
d
!ro
m
co
ntr
act
in
by
an
y
la
#
to
#h
ich
he
is
su
b?e
ct.
The persons to the contract should be
competent to contract. (inors and
persons o! unsound mind cannot enter
into insurance contracts. The leal capacity
o! an insurer to contract has to be explicit
in its (emorandum and 2rticles o!
2ssociation.
K: *e:ality &4 tGe c&ntract
The sub?ect matter o! the contract must
be leal. .ection 1C o! the Indian
Contract 2ct" states@ 4The ob?ect o! an
areement is la#!ul unless
22) it is !orbidden by la#"
23) it is o! such a nature that" i! permitted"
it #ould de!eat the pro$isions o! any
la#
or is !raudulent"
24) in$ol$es or implies in?ury to the person or property o! another" or
25) the court reards it as immoral or opposed to public policy4.
/or example" stolen $ehicles and smuled oods cannot be insured as the insurance o!
smulin $entures or stolen oods #ould be rearded by courts as opposed to public
policy.
3.$ )RINCI)*ES OF INSURANCE
2ll Insurance Contracts are o$erned by the !ollo#in !our basic principles o! insurance@
26) Insurance Interest
27) Indemnity
28) Utmost 8ood /aith
29) Proximate Cause
91: In!raFle Interet
The o#ner o! property has a riht under la# to a!!ect insurance on the property i! he is
li0ely to su!!er !inancially #hen the property is lost or damaed. This leal riht to insure is
called insurable interest. )ithout insurable interest" the contract o! insurance #ill be $oid.
There are three essentials o! insurable interest@
i There must be a property" rihts" interest" li!e or potential liability capable o! bein
insured.
i .uch a property" rihts" li!e" etc. must be the sub?ect matter o! insurance.
I The insured must bear a leal relationship to the sub?ect,matter #hereby he stands to
bene!it by the sa!ety o! the property" rihts" interest" li!e or !reedom o! liability and
stands to lose by any loss" damae" in?ury or creation o! liability.
Insurable interest could arise in a number o! #ays" !or example"
aE Interet ariin: 4r&3 OCnerGi5@ The clearest and most common example o! the
existence o! an insurable interest is that o! an o#ner o! a property. 2n o#ner o! a
buildin #ould su!!er !inancial loss i! it is destroyed or damaed by !ire or by any
other peril. The la# there!ore i$es him a riht to insure his property.
nit C 3ssential /eatures and /undamentals o! 8eneral Insurance
ice o!
ublic
f i! he is
insure is
be $oid.
o! bein
"dsto
bilit$ and
np=, ui iii.
C;$ ner o! a
Qor by any
30) Interet ariin: &!t &4 a M&rt:a:e@ One #ho has ad$anced money on the security
o! property has an insurable interest in that property as he #ould su!!er !inancial loss
by loss or damae to the property.
31) Interet ariin: 4r&3 laC a a Tr!tee@ The insured #ill ha$e an insurable interest
in not only the oods o#ned by him but also the oods held by him in trust or on
commission !or #hich he is responsible.
32) Interet ariin: 4r&3 laC a a "ailee @ (otor traders li0e arae proprietors
ha$e as bailees" an insurable interest in respect o! loss or damae to the customer<s
$ehicles #hich are in their custody !or repairs.
33) Interet ariin: 4r&3 c&ntract a a *eee@ 2n o#ner may rent his buildin to a
lessee #ith a pro$ision in the contract that the lessee shall continue to pay rent e$en in
case o! !ire. Lessee in such circumstances #ould #ish to insure the loss o! rent.
)e Gall n&C see &3e 3&re clear e>a35le &4 in!raFle interet:
Q O#nership o! property 9and ?oint o#nership: is a clear example o! insurable interest.
t 2 ban0 or other !inancial institutions ha$e insurable interest in the property by reason
o! a loan ranted by them. The interest is limited to the amount o! the loan. Usually
under such circumstances" the policies are issued in the ?oint names o! the insured and
the ban0.
Q 2 ship o#ner has insurable interest in the ship o#ned by him. Caro o#ners" both
sellers and buyers" ha$e insurable interest in the oods o#ned by them.
Q The o#ner o! a motor $ehicle has insurable interest in the $ehicle> he also has insurable
interest in a potential third party liability. I! a third party is in?ured in the accident" the
damaes payable to the third party #ould be a !inancial loss to the insured. %ence" he
can insure his third party liability.
Q 2person has an insurable interest in his o#n li!e as it is assumed that any person<s li!e
is $aluable to himsel! and he is deemed to ha$e unlimited !inancial interest in it.
Q 2 creditor has insurable interest in the li!e o! the debtor to the extent o! the loan
repayable by the debtor.
The ser$ice conditions" or special areements #ith sta!!" sometimes pro$ide that the
employer shall pay a speci!ied sum o! compensation to their employees in the e$ent
o! accidental disablement or to their leal heirs in case o! death o! the employee.
Under such circumstances an employer #ill ha$e an insurable interest in the li!e o! the
employee and he can ta0e a roup personal accident policy !or his employees.
4Property anHRL2atnUty Ginsurance
Activit A :
;isit the nearest Ne# India 2ssurance Co. Ltd. o!!ice and re*uest !or a policy in your
name !or a $ehicle #hich is reistered in your sister<s B brother<s name as the $ehicle is
al#ays bein used by you. Note do#n the reply i$en by the insurance company. )hich
is the principle o! insurance applicable here'

Sit!ati&n an' ti3e CGen in!raFle interet 3!t e>it:
In !ire and miscellaneous insurance" it should be present at both times" at the time o!
buyin and at the time o! loss. I! a !ire has occurred in a shop and it is sold later"
there is no insurable interest. %ence the o#ner cannot reco$er the amount.
In marine caro" insurable interest is re*uired at the time o! loss. It may not be
present at the time o! e!!ectin insurance. O#nership o! the oods passes !rom the
exporter to the importer #hen the payment is made. 2lthouh insurable interest is not
re*uired at the time o! the issue o! the policy" the importer must ha$e a enuine
expectation o! ac*uirin insurable interest.
)e shall no# see ho# the insurable interest chanes a!ter the assinment o! the
policD.
2ssinment means trans!er o! rihts and liabilities o! an insured person to another
person #ho has ac*uired insurable interest in the property insured. This person called
the assinee" becomes the ne# insured to #hom the bene!it o! insurance is passed. %e
is then entitled to deal #ith the insurers in his o#n name and reco$er directly any
claim under the policy.
/ire and miscellaneous policies are assined only #ith the consent o! the insurers.
(arine caro policies are" ho#e$er" !reely assinable #ithout the pre$ious
0no#lede or consent o! the insurer. The reason is that the o#nership o! the oods
insured under a marine caro policy !re*uently chanes #hen the oods are still in
transit.
2
marine
hull
policy
cannot
be
assin
ed
#itho
ut the
conse
nt o!
the
insure
rs. /or
exam
ple"
durin
the
curren
cy o!
the
policy"
i! the insured person sells his motor $ehicle to another person and ets the $ehicle
duly trans!erred on the $ehicle documents throuh the R.T.O." bene!its under the
policy
1.
Unit 3 3ssential /eatures and /undamentals o! 8eneral
Insurance

$l
ar
in
e
o
ns
e
nt .' caro mot be G..y o! the ?he
$ehicle Qr the policy
#
9
T
"
M
.
-p
T
a
C
M
C
a
G
5
a
y
3
e
n
t:
T
h
is
is
t
h
e
si
m
p
l
e
st
m
e
t
h
o
d
#
h
i
c
h
is
a
dop
ted
by
the
ins
ure
r in
mo
st
cas
es.
)h
en
the
ins
ure
rs
are
sati
s!ie
d in
re
ard
to
the
cau
se
and
ext
ent
o!
the
los
s"
the
loss
is
sett
led
by
a
cas
h
pay
me
nt"
that
is"
by che*ue.
34) Re5air @ It may be more con$enient to both parties o! a contract o! insurance" to
settle loss or damae claims by repair as is done in case o! motor insurance claims.
On receipt o! !inal bill o! repairs and a satis!action note !rom the insured" the repairer
is paid.
35) Re5lace3ent@ The insurer sometimes arranes !or the replacement o! $aluable
items li0e ?e#ellery" and other special items. This method is rarely met in practice.
36) Reintate3ent@ Occasionally" an insurer may underta0e to reinstate buildin
destroyed or damaed by !ire or other insured perils #hen it is !ound that the amount
claimed by the insured is exorbitant. This option o! reinstatement lies only to the
insurer under a speci!ic condition o! a policy but it is rarely exercised by the insurer in
practice. The reason bein once this method is chosen by the insurers they cannot
subse*uently #ithdra# and o!!er cash settlement.
/ire" accident" and marine hull policies are pro$ided #ith true indemnities but under marine
caro" it is a commercial indemnity i.e. some amount o! pro!it is allo#ed. %o#e$er personal
accident insurance is not at all a strict contract o! indemnity as man has unlimited interest in
his o#n li!e.
E44ect &4 l& &n tGe !3 in!re'
)hen a payment has been made by the insurer in respect o! a loss under a policy o!
insurance" it may be said that he has dischared his liability under the contract to the extent
o! the amount o! the loss. )hether or not the sum insured under the policy is reduced by
the amount o! claims depends upon the terms and conditions o! the policy. The position
$aries accordin to the type o! the insurance.
Fire In!rance:
)hen a loss is paid" the sum insured under a !ire policy stands reduced by the amoui paid"
!rom the time o! loss until the rene#al date. The sum insured may be restored to oriinal
!iure by an endorsement" on payment o! the appropriate premium calculated on pro,rata basis
!rom the date o! reinstatement o! the sum insured to the next rene#al
Marine In!rance:
Under the (arine hull policy" any number o! repair claims are payable under the policy"
.um insured does not et reduced and the *uestion o! restoration o! sum insured does noO
arise.
Unit C 3ssential /eatures and /undamentals o! 8eneral Insurance

m
ce
"
to
cl
ai
m
s.
re
pa
ire
r
$a
lu
ab
le
ac
tic
e.
b
ui
ld
in

>
a
m
o
u
nt
ll
y
to
th
e
insurer
in
n
n
ot
b
r
marine r personal interest in
"cy o! S the extent educed
by ie position
mount .tored to the
culatedona ne#al date.
a,me policy. TP.I does not
M
.
a
c
c
i
d
e
n
t
h
e
n
c
e
*
u
e
s
ti
o
n
o
!
r
e
i
n
s
t
a
t
e
m
e
n
t
d
o
e
s
n
o
t
a
r
i
s
e
.
*i
aF
ili
ty
In
!
ra
nc
e:
R
ei
ns
tat
e
m
en
t
o!
th
e
su
m
in
su
re
d
ar
is
es
on
ly
i!
th
e
po
lic
y
sti
pu
lat
es
an
an
nu
al
li
m
it o!
liability.
1Jer&nal Acci'ent:
Reinstatement o! sum insured is
not applicable. On payment o!
capital sum insured 9death" loss o!
limbs: policy ets cancelled.
-al!e' )&licie
2 $alued policy may be de!ined as
a policy in #hich the sum insured
is areed bet#een the insurer and
the insured as the $alue o! the
property insured" #hich amount
becomes payable in the e$ent o!
total loss" irrespecti$e o! the
considerations o! the
depreciation etc. These policies
are issued !or marine insurance
and to co$er some types o!
special properties #hich are
di!!icult or impossible to replace
or #here it is di!!icult to establish
the $alue at the time o! loss.
;alued policies are reconi&ed by
la# and their issue is not
considered as the $iolation o! the
principle o! indemnity.
*i3itati&n &n tGe In!rerJ
*iaFility
3$ery policy o! insurance
contains a sum insured #hich
is the maximum limit o!
liability under the policy.
This $alue is not the areed
$alue o! the property
9except under areed $alue
policies: nor is it the
amount #hich #ill be
automatically paid in the
e$ent o! loss or damae.
The amount payable under
the insurance contract is the
actual loss or the sum
i
n
s
u
r
e
d
#
h
i
c
h
e
$
e
r
i
s
l
e
s
s
.
i
.
o
m
e
p
ol
ic
ie
s
ar
e
s
u
b?
e
ct
to
<e
x
c
e
ss
<
or
<!ra
nchi
se<
#hi
ch
mea
ns
that
und
er
cert
ain
circ
ums
tanc
es>
a
part
o!
the
loss
ma
y
ha$
e to
be
bor
ne
by
the
insu
red.
In
thes
e
circ
ums
tanc
es
the
insu
rer<s
liab
ility
is
the
me
as
ur
e
o!
indemnity less the amount
o! <excess< or <!ranchise<. /or
example" excess 9also
0no#n as compulsory
deductible:
!or motori&ed t#o #heelers is Rs. K7B,. In case o! each and e$ery o#n damae
claim" settlement o! the claim #ill be done a!ter deductin Rs. K7B, !rom the claim
amount.
TGere are tC& c&r&llarie &4 5rinci5le &4 in'e3nity:
S!Fr&:ati&n an' C&ntriF!ti&n.
SU"ROGATION
.ubroation is a principle #hich is applied to all contracts o! indemnity. It may be de!ined
as the trans!er o! rihts and remedies o! the insured to the insurer #ho has indemni!ied the
insured in respect o! the loss. It means that a!ter payment o! the loss the insurer ets the
riht o! ta0in all steps to reco$er any money in compensation !rom a third party. /or
example"
a. Insured property may be destroyed by !ire caused by the nelience o! a third party
#ho is at la# responsible to ma0e ood the loss. The insurer ha$in indemni!ied the
insured is entitled to the insured<s riht o! reco$ery aainst the third party.
I! the caro is damaed due to the nelience o! a carrier 9!or example" rail#ays" 1
truc0 operators" shippin companies etc.: #ho ha$e an obliation to ma0e ood theF
loss o! the insured" the bene!it o! this obliation pass to the insurer.
@
In case o! a the!t claim" the $ehicle may be traced a!ter the settlement o! the claim. 2s"
a total loss claim is settled by the insurers" rihts o! the insurers are subroated to the.
insurance company. To preser$e this riht" the insured has to sin a subroation bondO
prior to the release o! the claim che*ue.
CONTRI"UTION
Indemnity is also o$erned by the principle o! contribution. 2n insured may ha$e se$eral
insurances on the same sub?ect,matter. The insurer is liable to contribute proportionately
the loss to the extent o! its interest. I! a property has been insured #ith more than one
insurer" in the e$ent o! a loss the insured #ill et a proportionate part o! the loss !rom each,
insurer" so that the insured does not ma0e a pro!it out o! the settled claim. T
In order to understand the application o! the principle o! contribution in practice" letusl
consider the !ollo#in examples@ A
b.
c.
.um Insured 2mt. o! Loss 2ssessed
Policy 2Rs. 177776,Rs.l 17776,
Policy+Rs. 177776,Policy C Rs.
C77776,TotalRs. L77776,
The amount payable under Policy 2" + and C #ill be as !ollo#s@
2mount Payable
Policy 2Rs. 17776,
Policy +Rs. 57776,
Policy CRs. L7776,
TotalRs. 117776,
The amount payable under each policy is arri$ed at by the !ollo#in !ormula @
.um insured under each policy
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, U Loss 2ssessed
Total sum insured under all policies
, Contribution by each policy to#ards the total loss assessed.
& Activity "#
(r. U had insured his (aruti Ven !or the period 11.7K.177K to 11.7K.177L. The $ehicle
#as stolen !rom the par0in lot bet#een 17.71.177L to 1K.71.177L #hen the insured
#as out o! station. %e loded a /.I.R. and submitted all the documents to the insurance
>npany. 2!ter completin the !ormalities" the claim #as settled on 1K.75.177L. On
1K.7L.177L" the $ehicle #as traced by the police. Police authorities in!ormed the insurance
company" #ho had settled the claim as the insurers had in!ormed the police station about
the settlement o! the total loss claim !or the!t o! the $ehicle. Insurers had also ta0en
subroation bond !rom the insured. .omeone #ho noticed the $ehicle in!ormed the insured
O he #ent to the police station to claim the $ehicle.
AnCer tGe 4&ll&Cin: CitG rea&n:
1. Can the insured ta0e the possession o! the $ehicle'
1. Is the insurer<s riht o! subroation protected'
9C: Ut3&t G&&' FaitG
The parties to a commercial contract" accordin to la#" are re*uired to obser$e ood
!aith. The seller cannot mislead the buyer in respect o! the transaction" but he has no
obliation to disclose all in!ormation about the sub?ect o! the contract. It is the buyer<s
duty to be care!ul #hilst enterin into the contract. <Let the buyer be#are< is the leal rule.
In insurance contracts ood !aith is re*uired to be obser$ed. The proposer has a leal
duty to disclose all material in!ormation about the sub?ect matter o! insurance to the insurers
#ho do not ha$e this in!ormation. The material in!ormation is that in!ormation #hich enables
the insurers to ta0e an under#ritin decision" that is" the decision #hether to accept the
ris0" the rate o! premium and terms and conditions o! acceptance or re?ect the ris0. This is
called the leal duty o! utmost ood !aith arisin under common la#. The !ollo#in are
some examples o! material !acts@
Fire In!rance:
Construction o! the buildin"
Occupancy o! the buildin i.e. #hether occupied as !actory" odo#n" shop etc.
Nature o! oods" that is" non,ha&ardous" ha&ardous" extra ha&ardous.
3ssential /eatures and /undamentals o! 8eneral Insurance
ood
he has no
ie buyer<s
leal rule.
leal
.surers ich
enables JS
eptthe This
is +o#in
are
Marine In!rance:
(ethod o! pac0in
The nature o! oods
The $essel carryin the oods
The ports o! shipment and destination etc.
M&t&r In!rance:
Reistered o#ner<s name and address
Cubic capacity o! enine
The year o! manu!acture" carryin capacity o! $ehicle
)hether CN8 0it installed
The purpose !or #hich the $ehicle is used
The eoraphical area in #hich it is used
The o#ner<s or dri$er<s con$ictions !or tra!!ic o!!ences etc..
)er&nal Acci'ent In!rance:
The exact nature o! occupation
2e" heiht and #eiht Physical
disabilities $lonthly income.
& Activity C:
The !ollo#in proposals ha$e been recei$ed !or insurance by an insurance company@ :
Residentia
l !lat !or
!ire
insurance
1: /actory buildin and contents !or !ire insurance W: %yundai .antro !or motor
insurance 5O (ediclaim and personal accident insurance !or a !amily o! !our members
O
"ist the in!ormation !or each proposal that #ill be material !or the acceptance o! the ris0 by
Smpany.
E>a35le &4 3aterial 4act a55licaFle t& all clae &4 in!rance
37) The !act that pre$ious insurers had re?ected the proposal" or chared extra premium"
cancelled" or re!used to rene# the policy.
38) Pre$ious losses su!!ered by the proposer.
39) )hether heBshe holds a similar policy #ith any other insurance company or in the
same insurance company.
The insured need not disclose the !acts o! the !ollo#in nature@
40) /acts #hich #ould diminish the ris0 o! insured peril !or example" appointin a niht
#atchman.
41) /acts #hich are presumed to ha$e been 0no#n to the insurer !or example" lare,
scale riotin in the area.
42) /acts #hich could be understood !rom the in!ormation already !urnished !or example.
customary process in an industry.
43) /acts #hich ouht to ha$e been en*uired into" but omitted by the insurer. This #ill be
construed as #arranty by the insurer.
JS$ Activity D #
Purchase a dress !rom a readymade cloth shop and o to the shop the next day to return
the same" as a!ter #ashin" the dress had shrun0.
a: Note do#n the reply i$en by the shop0eeper.
)hich is the principle applicable' %o# is the principle applied di!!erently in insurance
contracts'
Contractual '!ty &4 G&&' 4aitG
In$ariably" in accident insurance and !ire insurance" a proposer is re*uired to ans#er
*uestions in a proposal !orm. This !orm incorporates a declaration to the e!!ect that the
ans#ers are #arranted to be true and complete and shall !orm the basis o! the contract.
leal e!!ect o! this declaration is to con$ert representations into #arranties" #hich
ins that any incorrect or inaccurate ans#er to a *uestion in the proposal !orm #ill
ier the contract $oidable at the option o! the insurer irrespecti$e o! the !act #hether it
aterial to the ris0 or not. The ans#ers are re*uired to be literally true and absolutely
cct. This is the contractual duty o! utmost ood !aith.
5: )r&>i3ate Ca!e
mition@ 4The acti$e e!!icient cause that sets in motion a train o! e$ents #hich brins
Sut a result" #ithout the inter$ention o! any !orce stated and #or0in acti$ely !rom a
independent source.4
principle o! the leal doctrine o! <proximate cause< is based on the principle o! cause
e!!ect #hich states that ha$in pro$ed the e!!ect and traced the cause" it is not necessary
o !urther. The la# does not concern itsel! #ith the cause o! causes. The immediate
ise and not the remote or the distant one" should be rearded.
proximate cause means the direct" the most dominant and the most e!!ecti$e cause
o! >ch the loss is the natural conse*uence. It is the cause #hich is most closely
connected 11 the loss" not necessarily in time but in e!!iciency or e!!ecti$eness. Once
this cause is > iti!ied" it is not necessary to o !urther into the cause o! causes.
$ ob?ect o! insurance is to pro$ide indemnity !or such losses as are caused by insured
ils. I! stoc0s are burnt" then the cause o! loss is !ire #hich is co$ered under a !ire policy
O hence the claim is payable. I! stoc0s are stolen" the loss is not payable under the !ire
s <burlary< is not a peril co$ered. The loss may be the result o! t#o or more
J*.-'
causes" actin simultaneously or one a!ter the other. Then" it becomes necessary to select
the most important" the most e!!ecti$e" the most po#er!ul cause #hich has brouht about
the loss. This cause is termed as the <proximate cause<" all other causes bein considered
as <remote<.
The !ollo#in examples #ill illustrate the distinction bet#een <proximate cause< and <remote
cause<.
44) 2 person insured under a personal accident policy #ent out huntin and met #ith an
accident. Due to shoc0 and #ea0ness" he #as unable to #al0. )hilst lyin on the
#et round he contracted a cold #hich de$eloped into pneumonia #hich caused his
death. The court held that the proximate cause o! death #as the oriinal accident and
pneumonia 9a disease #hich is not co$ered under the policy: only a remote cause.
%ence the claim #as payable.
45) 2n insured person su!!ered accidental in?uries and #as ta0en to hospital. )hile
underoin treatment" he contracted an in!ectious disease #hich caused his death. In
this case" the court a$e a contrary rulin. The <proximate cause< o! death #as the
disease and the oriinal accident only a <remote cause<. %ence" the claim #as not>
payable under a personal accident policy.
46) I! an insured man meets #ith a motor accident #hile crossin the road" commonO
sense tells us that the immediate cause o! accident #as his bein 0noc0ed do#n by a
car. In see0in !or the cause o! accident" one #ould not try to !ind out #hy he #as
crossin the road nor #ould one arue that i! he had remained #here he #as" the t
accident #ould not ha$e happened. Thus" the <cause o! causes< is not be loo0ed !or.O
47) 2 man #ith heart disease sustains an accident #hich" coupled #ith his #ea0 heart"<
leads to his death. The proximate cause o! death is the accident althouh a man #ith
a normal heart #ould ha$e reco$ered.
The doctrine o! proximate cause helps in i$in e!!ect to the real meanin and intention o!
an insurance contract. In the absence o! this rule" e$ery loss could be claimed by the
insured and e$ery loss could be re?ected by the insurers. It also helps in maintainin a
balance bet#een the rihts o! the those insured and the insurers. It not only de!ines the
scope o! co$erae under the contract but ser$es also to protect the relati$e rihts o! the
parties to the contract by pre$entin the insured !rom enlarin the scope o! insurance and
pre$entin the insurers !rom restrictin its scope" thus maintainin the true intention o! the
parties #hen the contract #as made.
C"K SUMMARY
,.ential elements o! insurance contracts are similar to commercial contracts. %o#e$er"
urance contracts are o$erned by !our principles o! insurance #hich are not applicable
commercial contracts. Commercial contracts are sub?ect to the principle o!
<8ood >h< #hereas insurance contracts are sub?ect to the principle o!< Utmost 8ood
!aith<. is principle re*uires the insured to disclose all the material in!ormation to the
insurers. ?sed on this in!ormation" insurers decide #hether to accept the proposal or not.
In$ariably accident insurance and !ire insurance" a proposer is re*uired to ans#er
*uestions in a iposal !orm. The ans#ers are re*uired to be literally true and absolutely
correct. This an incorporates a declaration to the e!!ect that the ans#ers are #arranted to
be true and mplete and shall !orm the basis o! the contract. 2ny incorrect or inaccurate
ans#er to a estion in the proposal !orm renders the contract $oid at the option o!
the insurer" i,specti$e o! the !act #hether it is material to the ris0 or not. This is the
contractual duty utmost ood !aith.
ie principle o! insurable interest is strictly applicable to all contracts o! insurance. )ithout
Durable interest" a contract becomes $oid. It is applied di!!erently only in marine caro
urance" #here the insurable interest need not be present at the time o! ta0in the policy
O must be present at the time o! claim. Insurable interest arises in many #ays. In case o!
ane in the insurable interest the same has to be intimated to the insurance company and
e policy is assined or trans!erred in the name o! ne# o#ner #ho has ac*uired the
urable interest.
% insurance contracts are contracts o! indemnity only and nothin more. The ob?ect o!
principle is to place the insured in the same !inancial position as he #as be!ore the loss.
lis principle ensures public interest at lare by not allo#in the insured to ma0e pro!it out
loss. In marine insurance" this principle is applied in a modi!ied !orm i.e. marine insurance
Jlicies are areed $alue policies. Personal accident policies are not strict contracts o!
lemnity as man has unlimited interest in his o#n li!e.
2broation and contribution are t#o corollaries o! principle o! indemnity. .ubroation
ms!ers the rihts and remedies o! the insured to the insurance company a!ter the payment
ihe loss. 2ccordin to the principle o! contribution" i! there exist more than one policy
lyerin the same sub?ect matter all policies contribute to the loss in proportion to the sum
wed.
arious perils are co$ered under di!!erent co$ers. Ob?ect o! the insurance contract is to
,o$ide indemnity !or losses caused by the insured perils. The most important" e!!ecti$e
nXl po#er!ul cause #hich has brouht about the loss is the proximate cause. 2ll other
causes are 0no#n as <remote cause<. I! the proximate cause o! loss is co$ered under the
policy" only then the claim becomes payable.
3.( 0EY1ORDS

Ai:n3ent
C&ni'erati&n
C&ntriF!ti&n
De5reciati&n
E>ce Kal& re4er
De'!ctiFleE
FrancGie
In'e3nity 5rinci5le
*iaFility )r&>i3ate
Ca!e
Reintate3ent
S!Fr&:ati&n
The leal trans!er o! one person<s interest in an insurance policy
to another person.
2ct or promise o!!ered by the one party and accepted by the
other as a price o! that others< promise.
Price" to0en" or other matter used as an inducement !or the
completion o! a contract" as an insurance premium.
2 participation" as t#o insurance policies in the same loss.
2 decrease in the $alue o! property o$er a period o! time due
to #ear and tear or obsolescence. Depreciation is used to
determine the actual cash $alue o! property at time o! loss.
2reed amount upto #hich no claim is paid under a policy.
Clause inserted in a policy to the e!!ect that losses exceedin
an areed limit #ill be paid in !ull and losses belo# the limit to
be borne by the insured.
O! a eneral leal principle related to insurance #hich holds
that the indi$idual reco$erin under an insurance policy should
be restored to the approximate !inancial position he or she
#as in prior to the loss.
2ny leally en!orceable obliation.
The dominatin cause o! loss or damae> an unbro0en chain
o! e$ents bet#een the occurrence and damae.
The restoration o! a lapsed policy.
It is de!ined as the trans!er o! rihts and remedies o! the insured
to insurers #ho ha$e indemni!ied the insured in respect o! the
loss.
C 3ssential /eatures and /undamentals o! 8eneral Insurance
utmost G&&' FaitG
;oid
;oid C&ntract !idable
C&ntract
2 duty imposed on both parties to an insurance contract. The leal duty
implies !ull disclosure o! all !acts material to the contract" durin
neotiations o! the contract.
O! no !orce or e!!ect@ null.
2 contract obtained by !raud is a $oid contract.
2 contract" #hich is $alid until it is treated as $oid by the arie$ed
party" is $oidable.

red SE*F6ASSESSMENT 7UESTIONS
@
" 3numerate #ith examples !i$e essential elements o! insurance contracts. . )hat is
the di!!erence bet#een a commercial contract and an insurance contract' " )hat are
the corollaries o! the principle o! indemnity' 3xplain #ith examples.
5.
De!i
ne
<sub
roa
tion<
and
<con
trib
utio
n<.
)h
y
are
they
called as the corollaries o! the principle o! indemnity'
r
S. 3xplain the !undamental principles o! eneral insurance. 8i$e detailed cases o!
proximate cause and contribution.
J:. List the !acts #hich the insured is expected to disclose and the !acts #hich he is not
supposed to disclose" under the principle o! Utmost 8ood /aith.
. 3xplain the importance o! a proposal !orm in accident insurance. )hat is the
contractual duty o! ood !aith'
G. )hat is meant by <material !act< ' 3xplain #ith examples !or di!!erent classes o!
insurance.
ixplain #hy personal accident policies are not contracts o! strict indemnity.
On

Distinuish bet#een <proximate cause< and <remote cause<.
Property and Liability Insurance 4
Hll. .tate #hether true or !alse.
48) Proposer is bound to disclose all material !acts.
49) Pre$ious history is not re*uired i! proposal is made to a ne# insurer.
50) 2 car holder has interest in third party liability.
51) The indemnity principles protect the pro!it element to be made by the insured.
52) Principle o! Indemnity is not strictly !ollo#ed in personal accident.
53) Riht o! .ubroation can be exercised be!ore payment o! claim.
54) Premium is also called consideration.
h: Contribution Y subroation are corollaries o! Utmost 8ood /aith"
i: Insurance contracts are based on <let the buyer be#are.<
?: O#ner o! property may sometimes not ha$e Insurable Interest"
0: In (arine Caro Insurance insurable interest is re*uired at the time o! loss.
1: Part o! Loss borne by the insured is 0no#n as <excess or< !ranchise<.
Hll. (atch the !ollo#in@
55)(arine Caro Policies 9: a: Tari!! +usiness
56)/ire Policies 9: b: Personal accident
57)Not strict contract o! indemnity 9: c: 2reed $alued policies
58)Commercial Indemnity 9: d: Cost o! repairs less depreciatio
59)(otor 9: e: (arine caro
H1C. /ill in the blan0s
60)___________________________________________________________.
ubroation and contribution are the corollaries o! principle o!
.
61)___________________________________________________________I
n marine insurance insurable interest must exist at the time o!
.
C: -------------------policies are !reely assinable.
5: Trans!er o! rihts and remedies !rom the insured to the insurers is 0no#n
as-------------.
K: (ost important" e!!ecti$e and po#er!ul cause #hich has brouht about the loss
is 0no#n as--------------cause.
L: Principle o! indemnity is not !ollo#ed strictly in. insurance.
$.1 INTRODUCTION
2ccordin to the #idest meanin" property means all the leal rihts #hich a person has"Z
includin the riht to his reputation as #ell as rihts in respect o! material and immaterial A
thins. It sini!ies dominion or riht o! use" control and disposition #hich one may la#!ully
exercise o$er thins" ob?ects or land. In a narro# sense" the term <property< re!ers to all X
rihts o! a person in material ob?ects o#ned or possessed by him.
There are di!!erent properties #hich are exposed to the ris0 o! loss or damae due to !ire"M
explosion" earth*ua0e" accidental damae to the $ehicles. ;aluables are also exposed to i
the ris0 o! the!t or burlary. )ith the industrial re$olution" there is an increase in manu!acturinZ
units" odo#ns" !actories #herein lare in$estments are made in respect o! buildins" plant A
and machinery" electrical and electronic e*uipments in addition to manpo#er. 2ny ma?o
loss #ill ha$e a direct impact on the !inancial stability o! the o#ner. )ith the urbani&ationO
there is tremendous increase in the number o! $ehicles that run on the roads. )ith theO
increase in the number o! $ehicles" accidents ha$e also increased #hich can e$en lead toT
the total loss o! a $ehicle. In addition to the ris0 o! physical loss or damae to the $arious 1
properties that a man possesses" there is a ris0 o! in?ury to the people usin these properties ?
too. $
$.8 TY)ES OF )RO)ERTY
Property is commonly classi!ied as either real property or personal property. Real property Z
applies to those lands and items attached to land" such as a house or a tree. Personal!
property comprises all other property.
Real )r&5erty .
Real property is the term applied to 91: unimpro$ed land and 91: impro$ed la
Uni35r&ve' lan' is real property that does not include permanent impro$ements
Unimpro$ed land may contain $aluable resources such as #ater" mineral resources" t
soil" ro#in timber" or #ildli!e. The o#ner o! unimpro$ed land is still exposed to a reductii?
in land $alue throuh such perils as contamination" pollution" erosion" !lood" earth*u
or !ire 9#hich may damae $eetation:. I35r&ve' lan' is real property that conti
somethin o! additional permanent $alue" such as structures a!!ixed to it. .tructures indu
not only buildins" but also such tanible property as in,round s#immin pools i
e*uipment" underround la#n sprin0ler systems" other underround pipin or #irin" s
tan0s" #ells" and pa$ed dri$e#ays and #al0s.
Property" Insurance and its Under#ritin
"oaui mses and d#ellin buildins are real property" because they are structures a!!ixed to
apro$edland. D#ellins include not only the li$in space" but also exca$ations" !oundations" >pes or
other supports" underround !lues and pipes" and plumbin and heatin systems. A#ellins can
ta0e a $ariety o! !orms besides that o! a sinle !amily house" includin ondominiums"
to#nhouses" apartments" and mobile homes. These d#ellins may be ccupied by their o#ners or
by tenants.
ixtures are personal property that become part o! the land or the d#ellin #hen installed ir
attached to it. In eneral" i! the personal property cannot be remo$ed !rom land or a buildin
#ithout substantial damae to the land or buildin or #as speci!ically desined !or use on the land or
in the buildin" it is a !ixture. /or example" custom,ordered drapes and #all lamps may be
considered !ixtures attached to a d#ellin" but standard curtains and r lamps are not !ixtures.
2!lapole cemented into the round may be considered as a iixiure attached to the land because
remo$in it may damae the surroundin tur!.
Personal Property
lO
4 onal property encompasses all property that is not real. This property can be tanible itanible"
and it can be o#ned or merely in one<s possession.
onal property is tanible i! it may be physically touched. /or example" !urniture" clothin" " money"
securities" automobiles" motorcycles" sno#,mobiles" boats" aircra!t" ?e#ellery"
!urs.
Fonal property is intan:iFle i! it is not physical in nature. 3xamples o! intanible personal perty
includ e an insurer<s promise under an insurance policy" a copyriht" and a ban0

land.
tillable : a
reduction
Jh*ua0e"
ontains
include :ols
and #irin"
septic
S nership o! personal property establishes an exclusi$e riht by the o#ner to use and . ioy
the property. The o#ner also has the riht to trans!er rule by sale and the obliation pay
outstandin debt on the property" such as a municipal tax or a mortae on the operty.
O#nership" or leal title" is the hihest property riht a person can possess.
is uu<!icult to list out the properties a man possesses. The rane can be !rom a needle to
Ship. )e can ma0e an attempt to list !e# o! them althouh the list is illustrati$e" not
Dhausti$e.
5
5
Man can o#n@
I. D#ellins
C. .hops" odo#ns.
K. %ousehold oods.
6. 2utomobiles.
P. .hips.
I1. 2rms Y 2mmunition.
1C. Roads and brides.
1. /actories.
5. Industries.
L. Plant and machinery.
N. Caro in transit.
17. 2eroplanes.
11. Real 2ssets.
$.3 NEED FOR )RO)ERTY INSURANCE
In other #ords" man can ha$e both" mo$able and immo$able properties. Immo$able means?
real assets and mo$able means $ehicles etc. .ince man has riht !rom beinnin a sense c
security and possessi$eness" he does his best to protect" !irst himsel! and then his possessio I!
the property #hich is the source o! income is lost !ully or partially" permanently c
temporarily" the income too #ould stop. The purpose o! insurance is to sa!euard aain
such a mis!ortune by ma0in ood the losses o! the un!ortunate. In order to cater to t
needs o! the customer" insurance company has de$ised $arious co$ers to pro$ide protectia to
the property o#ned or possessed by him.
$.$ ORIGIN OF )RO)ERTY INSURANCE
Property insurance started in the U.=. In about 1677" early insurance companies started
insurin houses !or !ire in ma?or cities ha$in reasonable #ater supplies. Insurance companieaT
radually expanded their port!olio and started insurin houses outside cities shops and
manu!acturin units. 2!ter the industrial re$olution" there #as an increase in the machines
that could produce more and lare premises #ere erected by the manu!acturers. The
industrial re$olution brouht about a reat increase in material #ealth in the !orm o! !actories.
machinery and merchandise #hich had to be protected by !ire insurance. Due to the complex
manu!acturin processes in industries" insurance also became complicated and there #as a
need !or scienti!ic classi!ication o! ris0s and uni!ormity in rates. Insurance companies thus
extended their operations to co$er the accidental ris0" burlary" explosions" accidents to
$ehicles" etc. in addition to the !ire ris0. .peciali&ed enineerin insurance li0e boila
explosion and machinery brea0do#n #as also started to protect the in$estment o! t0
manu!acturers in the !orm o! boilers and machineries.
Unit 5 Property" Insurance and its Under#ritin
.ant iiieans T
a sense o!
"sions.
lanently or
lard aainst
cater to the
ie protection
,.Mnies started
Smpanies hops
anX nachine J
rers. Thi
!actorie
ecomp0 there
# ompantX
.accider,."".-
li0e boil
Bestment o!F
5.K )O*ICIES CO-ERING )RO)ERTY INSURANCE _____________________
The main branches o! insurance are 4/IR3<" <(2RIN3< 2ND <(I.C3LL2N3OU.<. To
understand the policies co$erin di!!erent properties !irstly #e shall see classi!ication o! property
insurance on the basis o! di!!erent branches o! insurance.
Fire In!rance@ (aterial property such as buildins" machinery" !urniture" !ixture and
!ittin" stoc0s etc. are co$ered !or loss or damae due to the operation o! !ire and allied
perils.
Other than material damae" the !ire policy also co$ers conse*uential losses such as loss J S!
net pro!it and standin chares.
Marine In!rance:
> %ull Insurance , loss or damae to the !ollo#in properties is co$ered@
62) Iron" steel and or composite $essels classi!ied in Indian Reister o! shippin"
Lloyd<s Reister o! shippin or other Classi!ication .ocieties. These are lare
$essels carryin caro.
63) .maller cra!ts enerally Indian built #hich are not classi!ied in any classi!ication
1
society.
/ollo#in are &3e e>a35le:
1" (otor boats" mechanical bares" launches employed !or caro or passenes in inland
#aters.
64) Dreders
65) (echani&ed !ishin tra$elers
66) )ooden !ishin boats #ith diesel enines.
1. Caro Insurance , loss or damae to the !ollo#in properties is co$ered@
67) (achinery
68) 3lect
ricB3lectr
onic
items
69) Li*uid caro and li*uid chemicals
70) 2ll 0inds o! lass items
5
7
71) %ousehold oods
72) Re!rierated caro
73) Paper" stationary oods" boo0s
h: Pharmaceutical" toilet items Y medicines
i: (etal bars" sheets other structural material
?: 2utomobiles" spare parts
Micellane&! :
J +urlary policy co$ers the!t o! any property includin cash a!ter !orcible entry or exit.
+urlary policy also co$ers damae to the property or premises by burlars.
J 3nineerin policies co$er loss or damae to plant and machinery" boilers Y electronic
e*uipments.
J (otor policy co$ers loss or damae to (otor ;ehicles.
J .hop0eeper policy co$ers loss or damae to buildin" contents" plate lass" Z
cycle" neon sin" personal baae.
J %ouseholders Insurance co$ers loss or damae to buildin" contents li0e !urniti
and !ixtures"
In addition to the material damae these policies also co$er leal liability and human 1
under third party policy or personal accident policy.
)e shall no# see classi!ication o! insurance on the basis o! sub?ect matter o! insu
2. In!rance &4 5r&5erty:
(otor $ehicles" residential premises" !actory" odo#ns" plant Y machinery" i
and !ixtures" stoc0s" plate lass" ?e#ellery etc.
%ere property" #hich has intrinsic $alue o! its o#n" is insured aainst loss ore
by $arious perils such as !ire" burlary" accidents etc.
I 5 Property" Insurance and its Under#ritin
oedal
Aamaec
". In!rance &4 liaFility:
J Leal liability to third parties
J Leal liability to employees etc.
%ere" insurance pro$ides protection aainst !inancial loss caused by incurrin leal
liability" throuh nelience or by reason o! statutory la#. /or example" liability o! the
employer to#ards his employees as per the )or0men<s Compensation 2ct or liability
o! a person to#ards third party !or in?ury or property damae as per the (otor
;ehicles 2ct.
A. In!rance &4 tGe 5er&n:
J Personal accident and sic0ness insurance
This insurance pro$ides !or payment o! !ixed bene!its in the e$ent o! death or
diablement o! the insured due to an accident.
J (ediclaim insurance@
This policy pro$ides !or reimbursement o! %ospitali&ationBdomiciliary
hospitali&ation expenses !or illnessBdisease su!!ered or accidental in?ury sustained
durin the currency o! the policy.
J O$erseas (ediclaim policy
This policy mainly pro$ides !or payment o! medical expenses in respect o! illness
su!!ered or accident sustained by Indian residents durin their o$erseas trips !or
speci!ied purpose. %o#e$er this is not a purely health insurance li0e (ediclaim
i
n
s
u
r
a
n
c
e

a
s
it co$ers loss to the property o! the insured to a speci!ied limit" i.e. it co$ers
loss o! chec0ed baae and loss o! passport in addition to the medical expenses
and personal liability.
1:" *& &4 5ec!niary l&e :
J Loss o! pro!it policies
t /idelity uarantee policies
Loss o! pro!it policies pro$ide protection aainst certain conse*uential losses
that result !rom the material damae> !idelity uarantee policies pay !or !inancial
losses su!!ered by the insured due to act o! dishonesty o! his employees.
/rom the classi!ication o! insurance on the basis o! sub?ect matter it is no# clear
that certain policies pro$ide protection aainst material damae to the property
#hereas certain policies pro$ide co$er !or leal liability. .ome policies are a
combination o! property insurance and liability insurance. /or example" the
comprehensi$e motor policy pro$ides co$er !or accidental damae to the $ehicleO
as #ell as leal liability !or third party in?ury or property damae. 3$en a !ire<
policy #hich mainly co$ers loss or damae to the property due to !ire and allied>
perils may also include insurance co$er !or loss o! rent due to loss or damae to
the property thus ma0in a !ire policy a combination o! property insurance and
pecuniary loss insurance. ;arious pac0ae policies li0e .%OP=33P3R.
IN.UR2NC3 and %OU.3%OLD3R. IN.UR2NC3 pro$ide co$er !or loss
or damae to the property due to !ire" burlary" brea0do#n and also
compensation !or personal accident and public liability arisin out o! ).C. 2ct..
%ence e$en these policies are a combination o! property insurance and liability
insurance.
)e shall be studyin all the policies co$erin di!!erent properties in detail in this
study course !rom Unit K to 17.
$.( UNDER1RITING OF )RO)ERTY INSURANCE
The term <Under#ritin4 is broadly used to denote the principles and practices concernin
the acceptance or re?ection o! ris0s" the total amount o! acceptance" the amount o! retention
!or insurer<s o#n account and treatment o! the balance throuh reinsurance.
The ultimate under#ritin ob?ecti$es are@
74) the production o! a lare $olume o! premium income su!!icient to maintain and enlare
an insurer<s orani&ation and
75) the earnin o! a reasonable pro!it on the operations.
To achie$e these ob?ecti$es there are se$eral !actors that enter into Under#ritin and
these may be classi!ied as !ollo#s>
76) The production o! a #ell spread and lare $olume o! business.
77) The selection o! the business
78) The determination o! the limits to be retained.
79) The reinsurance o! the surplus.
rious under#ritin considerations ri
>ment o! the ris0. /or a better understa
B see the under#ritin consideration@
ih 0no#lede o! !ire ha&ards o!
iction and occupancy details are i$i
The !irst !actor mentioned abo$e" the production o! #ell spread and lare $olume o! business
is o$erned by the need !or #ide distribution o! ris0s class#ise and eoraphically. 2ccordin
to the theory o! lare numbers #hich is the !undamental basis !or all insurance operations"
it is unli0ely that all classes o! business #ould produce ad$erse results at the same time
#hereas business obtained in certain classes may not be lare enouh to produce a$erae
loss experience o! the past. There!ore obtainin business in as many classes o! ris0s as
possible and co$erin as much area as possible eoraphically #ill ha$e the e!!ect o!
a$erain out the o$erall results.
The second !actor" the selection o! business" in$ol$es a care!ul scrutiny o! the business
obtained #ith a $ie# o! ma0in a proper assessment o! the ha&ard in$ol$ed. The riht
assessment pre,supposes on the part o! the insurers a thorouh 0no#lede o! the ha&ard
in$ol$ed in di!!erent properties to be insured.
The third !actor" the determination o! the limits to be retained 0no#n as <retention< #ill
depend upon the experience in the particular class o! business" the premium income and
the !inancial status o! the insurers.
The !ourth !actor" the reinsurance is an arranement #hereby an insurer reinsures a part o!
the ris0 #ith another insurer to diminish his o#n liability throuh di!!erent methods o!
reinsurance #hich are 9a: !acultati$e and 9b: treaty either proportional or non,proportional.
5.6 UNDER1RITING CONSIDERATIONS
There are $arious under#ritin considerations re*uired !or the selection o! business and
proper assessment o! the ris0. /or a better understandin o! property insurance under#ritin"
#e shall no# see the under#ritin considerations o! ma?or policies co$erin insurance o!
properties.
/IR3@
Thorouh 0no#lede o! !ire ha&ards o! di!!erent 0inds o! buildin materials.
Construction and occupancy details are i$en attention.
/or example" in respect o! construction #ith timber !loorin or roo!s made o! hay or
#ood" ratin #ill be done 0eepin in mind the aspect o! 4=UCC%2
CON.TRUCTION4
Thorouh 0no#lede o! di!!erent industrial processes.
J =no#lede o! di!!erent 0inds o! oods and their nature in relation to outbrea0 and
spread o! !ire.
J Thorouh 0no#lede o! methods o! !ire protection and extinction.
In this respect" sur$ey and ris0 inspection are use!ul aids to the insurers.
MARINE INSURANCE
The important !actors to be considered !or under#ritin a marine caro policy are@,
J (ethod and type o! pac0in
J (ode o! transit
J Name o! the steamer
J Nature o! the commodity
J (ethod o! pac0in
J Type o! insurance co$er i.e. #hether restricted or all ris0.
MOTOR
J Reistration no. o! the $ehicle.
J 8eoraphical area #here the $ehicle is to be used.
J 2e o! the $ehicle.
J (a0e and model o! the $ehicle.
J Cubic capacity and seatin capacity o! the $ehicle.
J Use o! the $ehicle 9pri$ate or commercial:.
J Dri$er<s experience" ae" prosecution details etc.
J Past claims<history.
J )hether any other insurer has re?ected the proposal.
Inspection o! the $ehicle helps in 0no#in the physical condition o! the $ehicle. Inspection
o! the $ehicle in$ol$es notin do#n the details li0e chassis no" enine no." 0ilometer readin"
colour o! the $ehicle and the condition o! the $ehicle" especially condition o! tires o! the
$ehicle.
?Activity A#
I! you are the insurer" mention the !actors that you #ould consider be!ore acceptin a
proposal to issue a comprehensi$e policy !or a truc0.
/or this purpose" you may ta0e the help o! the proposal !orm. 2ll the *uestions duly
ans#ered #ill help you in this exercise.
"URG*ARY INSURANCE
*x
)hile under#ritin a burlary proposal" special attention is i$en to the !ollo#in !actors.
t Nature o! the insured property #ith re!erence to the $alue and $olumeB#eiht o! the
property.
/or example" special attention is re*uired #hile under#ritin articles o! small $olumeB
#eiht and ha$in hih $alue as they are attracti$e to burlars.
J Premises in #hich the insured property is housed. The class o! construction o! the
premises and the situation is important. /or example" Premises situated in densely
populated areas are considered better ris0s than those situated in lonely areas.
J Number o! days !or #hich the premises are unoccupied.
J .a!ety measures ta0en by the insured.
/or example" Pro$ision o! a #atchman to e!!ecti$ely uard the premises.
Details o! pre$ious claims and policies. These details help in assessin the moral
ha&ard o! the insured.
Activity " :
Iou ha$e been approached by a shop o#ner sellin expensi$e i!t articles and toys. %e
desires to protect his shop aainst !ire and burlary.
List out the under#ritin considerations> the $arious !actors that you #ould consider !or
acceptin the proposal and issuin t#o separate policies </IR3< Y <+UR8L2RI4
MONEY IN TRANSIT )O*ICY
/ollo#in ma?or !actors are ta0en into consideration #hile under#ritin a (oney,in
,Transit policy.
J The maximum amount carried in any sinle transit.
J The mode o! carriae o! money , on !oot" on bicycle" in a ric0sha#" in a bus etc.
)hether arms uard accompanies the person carryin the money.
J The manner in #hich the money is carried , on the shoulder o! the employee in a ba
or a loc0ed ba" etc..
J The route throuh #hich the money is carried.
J Location o! the premises.
2ns#ers to the abo$e #ill help in decidin the rate to be imposed. /or example" a lo#er
rate #ill be chared #here the transit is #ithin radius o! 1 0ms. 2nd hiher rate #ill be
chared !or transit upto 1K 0ms. or abo$e 1K 0ms.
)*ATE G*ASS INSURANCE
/ollo#in are the !actors that need special attention #hile pro$idin a co$er to !ixed plate
lass aainst brea0ae.
J .i&e and identi!ication o! the lass.
J )hether the premises are $acant or occupied.
J Locality !actor is also ta0en into consideration. /or example" #hether the premises
are in disturbed locality or near slum area.
2cceptance o! the proposal and the rate to be chared #ill depend upon the type o! lass"
situation" pre$ious claims experience etc.
"AGGAGE INSURANCE
/ollo#in !actors need special attention #hile issuin a baae policy aainst the ris0 o!
burlary" the!t or damae by accidental means.
J The route o! the ?ourney
J 2ny brea0 in ?ourney in$ol$ed.
J Description o! the baae Y contents
J N ature o! contents
J ;alue o! each pac0ae
$
J Indi$idual $alues and !ull description !or ?e#ellery and $aluables i! co$ered
This policy is sparinly ranted to 0no#n clients only as it in$ol$es hih moral ha&ard.
MAC%INERY "REA0DO1N INSURANCE
.pecial under#ritin considerations !or issuin a (achinery +rea0do#n policy are@,
J )hether reliable repair !acilities are a$ailable in the $icinity.
J Huality o! the machine and the maintenance o! the machinery.
J )hether the machine used is a <standby< machine.
J Past loss experience.
J Reular inspection o! the machinery.
J (anu!acturer<s credibility.
J )hether model is obsolete or can be easily replaced.
CONTRACTORJS )*ANT AND MAC%INERY )O*ICY
/actors ta0en into account #hile assessin the ris0 are@ ,
J 8eneral condition o! ?obsite and accessibility.
J Periodical inspection adopted by the contractors
J Conditions o! the construction plant and e*uipment.
J 3xperience o! the operators and or dri$ers
J 8eneral standard and *uality o! maintenance.
J 2ny extension o! co$er re*uired.
The rate o! premium o$erned by tari!! $ary accordin to classi!ication o! construction
plant" e*uipment and machinery.
E*ECTRONIC E7UI)MENT INSURANCE
+e!ore acceptin any 3lectronic 3*uipment !or insurance" important !actors to be considered
are"
J )hether the per!ormanceBacceptance test is success!ully completed.
J )hether the reular ser$icin and maintenance contract is $alid.
J 2e o! the $ehicle" year o! manu!acture
J Technical details o! the 3*uipment
J Pre$ious claims history etc.
Under#ritin o! $arious property co$ers mentioned abo$e mainly in$ol$es !indin outt
perils to #hich the property is exposed and accordinly o!!er the riht combination c
co$er to the insured.
& Activity C:
.uest a suitable policy or policies to co$er the !ollo#in properties aainst the $arious
perils to #hich they could be exposed,
i. Residential !lat L. 2 lass !actory

Passener carryin bus 6. %ospital

Pri$ate car N. Re!rierator
Gruction
5. 8rocery shop P. Ae#ellery
msidered
8odo#n o! clearin Y !or#ardin aent 17. Laptop
5"N SUMMARY
out the
"iion o!
Collecti$ely" property is somethin o#ned or possessed by a person to #hich he has a
leal title. 3ach and e$ery property is exposed to $arious ris0s #hich may cause loss or
damae to the property. This #ill result into !inancial loss to the o#ner o! the property. Thus
there is a need !or protectin such property !rom any accidental" un!oreseen loss or damae.
Property insurance ta0es care o! such a situation throuh $arious co$ers.
Property other than real estate or property that is mo$able or separable !rom real estate is
0no#n as <contents< !or the purpose o! property insurance. Property used !or business
purpose is co$ered by a commercial policy #hereas personal property not used !or
commercial purpose is co$ered by personal line policies li0e %ouseholder policy" (otor
policy 9pri$ate use:" /ire policies 9d#ellins: etc. Certain policies co$er only physical loss
or damae to the property and certain policies co$er liability to#ards third party" !or
example" motor third party policy" public liability policy" #or0men<s compensation policy.
)hereas certain policies are a combination o! both property and liability co$er" li0e motor
comprehensi$e policy. Pac0ae policies li0e the householders or shop0eepers policy pro$ide
$arious co$ers under a sinle policy. These policies co$er loss or damae to the property
by !ire" burlary etc. and also co$er personal accident co$er. Under#ritin o! the $arious
policies re*uires thorouh 0no#lede o! the ha&ards in$ol$ed" perils co$ered and exclusions
under the policy. ;arious !actors need to be considered be!ore acceptin a proposal #hich
is 0no#n as under#ritin considerations.
$.. 0EY1ORDS

"!r:lary @ It is a the!t committed by brea0in into or out o! the premises.
3$idence o! brea0in in" is necessary. The!t in$ol$in !orcible
entry or exit.
J. 22oose;y used term sini!yin broad or extensi$e co$erae

%aLar'
Intan:iFle
*iaFility
Rein!rance
Retenti&n
Ri9
Tan:iFle
<Prr$ate<riottse.
2 condition that creates or increases the probability o! a loss"
Indescribable. 2ny leally en!orceable obliation" leal
responsibility.
Insurance placed by an under#riter in another company to
cut do#n the amount o! the ris0 assumed under the oriinal
insurance.
The act o! retainin an exposure to loss@ also that part o! the
exposure that is retained.
It can be a potential source o! loss or the sub?ect matter o!
insurance itsel!. The probability o! loss.
Physical" real.
used !or >y"
(otor rsical
loss party" !or
on policy" ti0e
motor cy
pro$ide e
property he
$arious
exclusions
osal #hich
e premises.
J) !orcible
Be co$erae
lit$o!aloss.
ability.
Jcompany to
r the oriinal
$.1/ SE*F6ASSESSMENT 7UESTIONS
H1. De!ine property. )hat are the di!!erent types o! properties'
H1. )hat is the need !or property insurance'
HC. 8i$e ten examples" other than those mentioned abo$e" o! personal property that
needs to be protected aainst material damae.
H5. 3xplain the need !or a #ell spread and lare $olume o! business by the insurer. HK.
)hat are the di!!erent ob?ecti$es o! under#ritin'
HL. )hat are the di!!erent under#ritin considerations !or acceptin a plate lass !or
insurances'
H6. .tate #hether the statements are true or !alse.
a. Personal property is al#ays tanible
b. .tandard /ire and .pecial Perils policy co$ers only material damae to the
property.
c. (otor comprehensi$e policy is a combination o! property insurance and liability
insurance.
d. Personal 2ccident policy co$ers lossBdamae to the accompanied baae in
addition to compensation !or death or disablement.
e. In (oney,in,transit policy" the distance o$er #hich money is carried has an
e!!ect on ratin.
!. ;alidity o! maintenance contract is an important consideration !or insurin an
3lectronic 3*uipment.
lai part o! the
?ect matter o
K.1 INTRODUCTION

/ire insurance is an important port!olio as !ar as insurance is concerned. It pro$ides !inancial
protection !or property aainst loss or damae by !ire and other perils. It is an areement
bet#een the insured and insurer #hereby the insured pays a premium in consideration o!
#hich the insurer arees to ma0e ood the !inancial loss su!!ered by the insured in the
e$ent o! the insured property sustainin loss or damae due to !ire and other insured peril.
)hat are the insured perils in !ire insurance' )e #ill see later.
This business is o$erned by 2ll India Tari!! !ormulated by the Tari!! 2d$isory Committee.
T28 is a statutory body established under the pro$isions o! the Insurance 92mendment:
2ct" 1PLN to control and reulate the rules" ad$antaes" terms and conditions that may be
o!!ered by insurers in respect o! 8eneral Insurance +usiness. It is applicable to all insurer
includin pri$ate insurers. )e #ill no# see #hat in!ormation tari!! co$ers.
The Tari!!@
It contains .ections 1 to N i$in in!ormation reardin rules" reulations and types o! I
property #hich can be co$ered" includin@
80) Imposes minimum rates.
81) 2llo#s discounts !or !ire extinuishin appliances and claim experience discountB
loadin.
82) Contains reulations !or ?udin standard o! construction and class thereo!.
83) .a!ety arranements.
K. Pro$ides policy #ordins" conditions" endorsements and #arranties.
The Tari!! #as re$ised in C1 st (arch 1771 and supersedes all earlier !ire tari!!s so !ar as
ratin is concerned. +reach o! tari!! is the term used #hen any insurer chares belo# tarin
rates and it is $ie#ed $ery seriously. Penalties are also imposed !or breach o! tari!!. Charin
o$er and abo$e the tari!! rates is not a breach o! tari!! but it a!!ects the insurer as competitor.
ta0es ad$antae o! it. /ire tari!! has underone tremendous chanes. It is a$ailable no# in i
a poc0et si&e diary sort o! thin. The one ris0 rate is the most salient !eature o! this tari!!" J
r.
Unit 5 /ire Insurance
,1
/ollo#in
sections are
co$ered
under the
Tari!!.

Sect
i&n
%ea
'in:

/
$
;
$
;
I
I
I
8eneral
rules and
reulatio
ns
.tandard
!ire and
special
perils
policy
D#ellin
s"
O!!ices"
%otels"
.hops
etc.
Located
Outside
the
compoun
ds o!
Industria
l B
(anu!ac
t
I
U
.
de
the
com
pou
nds
o!
Indu
stria
lB(a
nu!a
cturi
n
ris0s
T
a
n
0

!
a
r
m
s

B

8
a
s

h
o
l
d
e
r
s

o
u
t
s
2
co$er.

o#
#e
#ill
see
in
deta
il all
the
secti
ons
co$e
red
by
the
!ire
tari!
!.
;.8
GEN
ERA
*
RU*
ES
AND
REG
U*A
TIO
NS
et us
see
the
rule
s
and
reu
latio
ns
#hi
ch
are
appl
icab
le to
all
secti
ons
o!
the
t
1
a:
O
n
l
y

.
t
a
n
d
a
r
d

/
i
r
e

a
n
d

.
p
e
c
i
a
l

P
e
r
i
l
s

P
o
l
icy
9h
ere
ina
!te
r
re!
err
ed
to
as
Po
lic
y:
#i
th
the
pe
rm
itt
ed
42
dd
,
on
4
co
$e
rs
9as
ap
pe
ari
n
un
de
r
.e
cti
on
;I
II:"
i!
an
y"
ca
n
85)
86)
o
li
c
y
9i
e
s:
c
o
$
e
ri
n

+
u
il
d
i
n
s
a
n
d
B
o
r
c
o
n
te
n
ts
s
h
al
l
s
h
o
#
b
l
o
c
0
#
i
s
e

s
e
p
a
r
a
t
e
a
m
o
u
n
t
s

o
n

9
i
:

+
u
i
l
d
i
n

9
i
i
:

(
a
c
h
i
n
ery
Properly
87) It is permissible to exclude .torm" Tempest" Rood and Inundation roup o!
perils 9hereina!ter re!erred to as .T/I: andBor Riot" .tri0e" (alicious and
Terrorism Damae perils 9hereina!ter re!erred to as R.(TD: at inception o! the
Policy only by deletin the rele$ant perils !rom the Policy. The deletion shall
apply !or the entire property in one complexBcompoundBlocation co$erin the
entire interest o! the insured under one or more policy 9ies: #ithout any option
!or selection. Reduction in premium,rates !or such deletion9s: may be allo#ed
as sho#n under the rele$ant sections o! the Tari!!. )hen these perils are deleted
!rom the scope o! the policy" the eneral exclusions shall include these perils.
88) 2ny ris0" #hich has not been pro$ided !or in the Tari!!" shall be re!erred to the
Committee !or ratin. Pro$isional rate o! Rs. 1.K7 per mile shall be chared in
such cases !or co$erin the ris0s under .tandard /ire and .pecial Perils Policy.
No discounts andBor aency commission shall be allo#ed on this rate. /or add
on co$ers" additional rates pro$ided in .ection ;III shall be chared.
89) Rates sho#n under this tari!! are minimum rates . Insurers may chare rates hiher
than those i$en under the tari!! .
8. -A*UED )O*ICYKIESE:
;alued Policy 9ies: can be issued only !or properties #hose (ar0et ;alue cannot be
ascertained e.. Curios" )or0s o! 2rt" (anuscripts" Obsolete machinery and the
li0e sub?ect to the $aluation certi!icate bein submitted and !ound acceptable by the
insurers.
Activity A #
(r. ;i?ay has a ood collection o! anti*ue pieces. %e has decided to o to London !or
some #or0. .o he #ants to insure all his collection !or Rs. 17"77"777 B,. +ut the insurance
company does not aree to this $alue.
/ind a solution !or this.
Unit K /ire Insurance ,1
!
5. *ONG TERM )O*ICIES:
I Policies !or a period exceedin 11 months shall not be issued except !or 4D#ellins4.
90) The policy shall be issued !or a minimum period o! C years.
91) Premium shall be collected in ad$ance.
92) Discount starts !rom 1KE !or C years and abo$e. (aximum discount allo#ed is
K7E !or 17 years and abo$e.
Activity ":
Ta0in into consideration lobali&ation and h<berali&ation" is it necessary to issue lon term
olicies to all other sections o! tari!!. 8i$e your opinion on this statement.
MID6TERM CO-ER :
8enerally" it is not permissible to rant mid,term co$er !or .T/I andBor R.(D perils.
The !ollo#in pro$isions shall apply" #here such co$ers are ranted mid,term@
93) Insurers must recei$e speci!ic ad$ice !rom the insured accompanied by payment
o! the re*uired additional premium in cash or by dra!t. This additional premium
shall not be ad?usted aainst existin cash deposits or debited to +an0 uarantee.
94) (id,term co$er shall be ranted !or the entire property at one complexB
compoundB location co$erin the entire interest o! the insured under one or
more policy9ies:. Insured shall not ha$e any option !or selection.
95) Co$er shall commence 1K days a!ter the receipt o! the premium.
96) The premium rates as under shall be chared on short period scale 9as per Rule
N: on !ull sum insured at one complexBcompoundBlocation co$erin the entire
interest o! the insured !or the balance period i.e. upto the expiry o! the policy.
TaFle ;.1
(id,term
Inclusion
.ection !!l .ection ;I .ection I;" ;
and;%
(aterials
8odo#n
Inmaterials In
Open
.T%
R.(TD
7.17E
7.1KE
7.CKE
7.1KE
1.77E
7.1KE
7.CKE
7.1KE
;. )AYMENT OF )REMIUM :
Premium shall be paid in !ull and shall not be accepted in instalments or by de!erred
payments in any !orm.
N.+@ It is not permissible to split the sum insured o! the same property under $arious
policies !or di!!erent periods o! insurance to deri$e ad$antae o! de!erred installments
!or payment o! premium. Not#ithstandin the abo$e" di!!erent policies may be issued
!or stoc0s #here circumstances necessitate issuance o! such policies.
(. MINIMUM )REMIUM :
(inimum premium shall be Rs. 1776, per policy except !or ris0s ratable under .ection
%I" #hich are d#ellins" shops" hotels etc. and <Tiny .ector Industries< under .ection
I;. The industrial B manu!acturin ris0s #here the minimum premium shall be
Rs. K7B, per policy.
+. )ARTIA* INSURANCE:
It is not permissible
97) To issue a policy co$erin only certain portions o! a buildin. Not #ithstandin
this" the plinth and !oundations or only the !oundation o! a buildin may be
excluded.
98) To issue a policy co$erin only speci!ied machinery 9except +oilers:" parts o!
machine or accessories thereo! housed in the same bloc0B buildin.
N.". )here portions o! a buildin andBor machinery therein are under di!!erent
o#nership" it is permissible !or each o#ner to insure separately but to the !ull extent
o! his interest on the buildin andBor machinery therein. In such cases" the insured<'
interest shall be clearly de!ined in the policy.
Unit K /ire Insurance
,1
& Activity
C:
2ssume that
you are a
o#ner o! a
!lat ha$in
!i$e rooms.
In one room
you ha$e
installed a
sa!e and you
#ant to
insure only
that room
aainst !ire.
)ill that be
possible or
not' )hy
RATE
S FOR
S%OR
T
)ERIO
D
INSUR
ANCE
:
Policies
!or
a
pe
rio
d
o!
les
s
tha
n
11
m
on
ths
sh
all
be
iss
ue
d
at
the
rat
es
set
ou
t
hereund
er@
TaFle K.1
/or a period not exceedin 1K days 1 7E o! the 2nnual rate
,do, 1 month 1 K E o! the 2nnual rate
,do, 1 months C7E o! the 2nnual rate
,do, C months 57E o! the 2nnual rate
,do, 5 months K7E o! the 2nnual rate
,do, K months L7E o! the 2nnual rate
,do, J L months 67E o! the 2nnual rate
,do, 6 months 6KE o! the 2nnual rate
,do, N months N7E o! the 2nnual rate
,do, P months NK E o! the 2nnual rate
i,or a period exceedin P months The !ull 2nnual rate
N.+.@
3xtens
ion o!
short
period
policy9
ies:
shall
not be
permitt
ed.
*OA
DING
FOR
H0UT
CC%
AH
CONS
TRU
CTIO
N:
+uildi
n9s:
h
a
$
i
n
#
a
ll
s
a
n
d
B
o
r
r
o
o
!
s
o
!
#
o
o
d
e
n
p
l
a
n
0
sB
t
h
a
t
c
h
e
d
l
e
a
$
e
s
andBor
rassB
hay o!
any
0indBb
amboo
Bplastic
clothBa
sphalt
clothBc
an
$asBtar
paulin
and
the
li0e
shall
be
treated
as
<=utch
a<
constr
uction
!or
ratin.
2n additional rate o! Rs. 5.77E shall be chared !or such buildin9s: andBor contents
thereo!.
Note@ Temporary sheds 9attached to buildins: erected durin the monsoon solely
!or the purpose o! monsoon protection are permitted #ithout loadin pro$ided such
sheds are not used !or storae purpose.
1/. RU*ES FOR CANCE**ATIONS:
/or Cancellation o! insurance policy.
1E At tGe &5ti&n &4 tGe in!re' :
a. Retention o! premium shall be at .hort Period .cale !or the period the
policy has been in !orce" sub?ect to the retention o! minimum premium by
the insurer.
b. Durin the currency" i! a policy is replaced #ith the same insurer by a ne#
annual one co$erin the identical property" re!und o! premium may be allo#ed
on pro,rata basis at the oriinal rates !or the sum insured replaced.
c. /or the sum insured not replaced" re!und must be calculated a!ter charin
premium at short period scale on such sum !or the time the insurance has
been in !orce sub?ect to retention o! the minimum premium by the insurer"
d. In case o! short period policies" premium shall be retained at the applicable
short period scale.
N.+. @ In case a policy is cancelled on account o! a 8o$ernment Order or on
completion o! a 4+uildin in course o! construction4 or #here +uildins are demolished"
pro,rata re!und o! premium may be allo#ed.
1: At tGe &5ti&n &4 tGe in!rer:
Re!und o! premium shall be on pro,rata basis !or the unexpired term.
11. MID6TERM RE-ISION IN SUM INSURED:
(id,term re$ision in sum insured shall be allo#ed as !ollo#s@
Increase in sum insured@ On pro,rata basis Decrease in sum
insured@ On short,period scale
18. ESCA*ATION C*AUSE:
It #ill be in order !or Insurers to allo# automatic reular increase in the sum insured
throuhout the period o! the policy in return !or an additional premium to be paid in
ad$ance. The terms and conditions !or this extension shall be as !ollo#s@
99) The selected percentae increase shall not exceed 1KE o! the sum insured.
100) The additional premium" payable in ad$ance" #ill be at K7E o! the !ull
rate" to
be chared on the selected percentae increase.
101) The sum insured at any point o! time #ould be assessed a!ter application
o! the
3scalation Clause.
102) 3scalation Clause #ill apply to policies co$erin buildin"
machinery and
accessories only and #ill not apply to policies co$erin stoc0
103) 3scalation Clause #ill apply to all policies and is not restricted to policies
issued
on reinstatement $alue basis.
104) Pro,rata condition o! a$erae #ill continue to apply as usual.
105) The automatic increase operates !rom the date o! inception upto the
date o!
operation o! any o! the insured Perils.
Note@ /or endorsement #ordin" see" Clause /" 2nnexure 2. [
Activity D:
2 builder #ants a co$er !or a !actory underoin construction. .uest such a suitable
co$er.
1C. C*AIMS E@)ERIENCE DISCOUNT M *OADING
Ris0s ha$in sum insured 9on buildins and contents o! all bloc0s in one compound o!
one complex in one location: abo$e Rs.K7 Crores ratable under .ections I;" ;" ;I
Y ;II o! this tari!! shall attract claims experience discountsBloadins based on the
incurred claims experience o! all the policies co$erin the Insured<s interest !or the
precedin CL months excludin the expirin policy period. 9I! there is any brea0 in
insurance" a$ailable CL months experience shall be ta0en" into account: as per the
table i$en belo#@
TaFle ;.3

Inc!rre' clai3 rati& 4&r tGe 5rece'in: 3(
3&ntG e>cl!'in: tGe e>5irin: A 5&licy
5eri&'
Dic&!nt Loadin

U pto K E
2bo$e KE Y upto 17E
2bo$e 17E Y upto 1KE
2bo$e 1KE Y upto C7E
2bo$e C7E Y upto 57E
2bo$e 57E Y upto KKE
2bo$e KKE Y up to 6KE
2bo$e 6KE Y up to 177E
2bo$e 177EY upto 1K7E
2bo$e 1K7E Y upto 177E
2bo$e 177E Y upto C77E
2bo$e C77E Y upto K77E
2bo$e K77E
1K 17
K
1C
M On rene#al o! business either by an existin insurer or by a ne# insurer" a pro$isio
loadin o! 1K E must be chared in all cases #here certi!ied details o! claims experiei
by respecti$e insurers are not a$ailable. This loadin shall be ad?usted subse*uently
receipt o! the exact claims experience.
1. In case the claim experience exceeds 177E additional excess 1.KE o! the cT
amount o! each Y e$ery claim sub?ect to minimum o! Rs. 17"7776, shall apply" 9i.e.
minimum total excess o! Rs. 17"7776,:
1. The abo$e loadin #ill not be applicable !or d#ellin.
/ire Insurance ,1
15. FIRE E@TINGUIS%ING A))*IANCES DISCOUNT
The discounts as per the scale i$en belo# may be ranted by the insurers to be
detached or sereated 9as per the Committees +uildin Reulations: bloc0s o! the
ris0s protected by /ire 3xtinuishin 2ppliances ratable under .ections III" I;" ;. ;I
and ;II o! the Tari!! \except !or /loater andBor /loater Declaration Policy 9ies:Z sub?ect
to the !ollo#in@
a: .ystem is erected and tested as per the rele$ant Reulations o! the T2C and a
certi!icate !rom LP2 or T2C accredited Pro!essionalsBPro!essional aency9ies:
con!irmin the e!!icacy o! the system and its !ull compliance #ith the Committee<s
rules is submitted by the Insured.
N&te: Pro!essionalsBPro!essional 2ency9ies: desinin andBor installin the
system themsel$es shall et the system certi!ied by third parties.
b: The installation is maintained in an e!!icient #or0in order at all times and an
2nnual (aintenance Contract 92(C: #ith an external aency is in !orce.
N&te: 2ny aency other than the one in$ol$ed in the installation o! the system or
a third party ha$in up,to,date 0no#lede o! maintenance o! !ire !ihtin
e*uipment can be approached !or 2(C.
TaFle K.5

Ty5e &4 intallati&n Dic&!nt KNE

106) %and 2ppliances Y Trailer PumpsB/ire 3nines
107) %and 2ppliances Y %ydrant .ystem K
108) %and 2ppliances Y independent .prin0lerB/ixed
)ater .pray .ystem
109) %and 2ppliances ] %ydrant .ystem Y independent
.prin0lerB /ixed #ater spray system 17
1.K
6.K
N.+.@ 1 2bsence o! %and 2ppliances !or .torae ris0s #ill not pre?udice the applicable
discounts
N.+.@ 1 The discounts are not cumulati$e
1;. RATING OF RIS0S IN MU*TI)*E OCCU)ANCY INDUSTRIA* ESTATE
Ris0s in (ultiple Occupancy Industrial 3state shall be rated <per se<. I! the entire
buildin o! the Industrial 3state is insured under one sum insured" a rate o! Rs.l .N7E
shall be chareable to <buildin<.
1(. SI*ENT RIS0
Ris0s ratable under .ections T; i.e. IndustrialB(anu!acturin and .ection ; i.e. utilities
located outside the industrial B manu!acturin ris0s are allo#ed silent rates as per tO
!ollo#in table.
/actories #here no manu!acturinB storae acti$ities are carried out continuously !or
C7 days or more@ Retention o! the premium shall be based on the appropriate storat
rate or silent ris0 rate o! Re. 1.77E #hiche$er is hiher
T2C allo#s to exclude .T/IB R.(D perils at the inception o! the policy and reduction
in premium rate !or such deletion as per .concern section.
The silent rates are not applicable i! a ris0 oes silent !ollo#in a loss under. theT
policy.
N&te@ Ris0s becomin silent shall not be entitled to any discounts.
1+. -O*UNTARY DEDUCTI"*ES
On receipt o! application !rom the insured" insurer may consider suitable discouni
!or $oluntary deductibles as per the scale sho#n in the table belo#. The discounts ar
applicable under the .tandard /ire and .pecial Perils Policy as #ell as !or the add,
on co$ers.
N&te@ The insurer shall attach to the policy9ies: a suitable clause in case the insured ?
opts !or the deductible and discount in the premium as sho#n in the table.
?
/or endorsement #ordin see Clause =" 2nnexure 2.
N&te@ The Insurer shall attach to the policy9ies: a suitable clause in case the insu
opts !or the deductible and discount in the premium as sho#n in the table.
/or endorsement #ordin see Clause =" 2nnexure 2.
Table o! discounts !or ;oluntary Deductibles@
TaFle K.K
AOG )eril ;N &4
Clai3 a3&!nt
3ini3!3 &4 R.
De'!ctiFle A3&!nt
OtGer 5eril in R.
la9G
Dic&!nt KNE
1/ la9G ; 8
8/ la9G 1/ $
3/ la9G 1; (
(/ la9G 3/ ,
1// la9G ;/ 1/
O 1// la9G O;7 T& Fe re4erre' t& TAG
sured ;oluntary Deductible once opted shall apply to the entire property insured and no
selection shall be allo#ed.
1N" COM)UTATION OF FINA* RATE AS )ER FO**O1ING SE7UENCE
The !ollo#in se*uence shall be adopted !or computation o! the rate@ ,
110) +asic Rate
111) KE Reduction !or .prin0lered bloc0s i! applicable 9!or ris0s
ratable under
.ections III" I;" ; and ;I:.
112) Reduction in rates !or deletion o! .T/I andBor R.(D perils" i! opted
out.
113
) T
ari!!
extr
a !or <=utcha< construction" i! applicable 9to be applied on 1 ,1,C:
114) DiscountBloadin !or claims experience 9to be applied on 1,1,C,B]5:
115) Discount !or /32 on protected bloc0s 9to be applied on 1 ,1,C,6]5:
1. Discount !or $oluntary deductible shall be applicable on the total premium
calculated on the basis o! !inal rate #or0ed out as abo$e.
;.3 SCO)E AND )ERI*S CO-ERED UNDER STANDARD FIRE AND
S)ECIA* )ERI*S )O*ICY KMATERIA* DAMAGEE
The scope o! co$er is 4In Consideration o! the Insured named in the .chedule hereto
ha$in paid to the.........................Insurance Company Limited 9hereina!ter called the
Company: the !ull premium mentioned in the said schedule" The Company 2rees" 9.ub?ect
to the Conditions and 3xclusions contained herein or endorsed or other#ise expressed
hereon: that i! a!ter payment o! the premium the property insured described in the said
.chedule or any part o! such property be destroyed or damaed by any o! the perils
speci!ied hereunder durin the period o! insurance named in the said schedule or o! any
subse*uent period in respect o! #hich the Insured shall ha$e paid and the Company shall
ha$e accepted the premium re*uired !or the rene#al o! the Policy" the Company shall pay
to the Insured the $alue o! the Property at the time o! the happenin o! its destruction or
the amount o! such damae or at its option reinstate or replace such property or any part
thereo!.4
No# #e shall loo0 more closely about the perils@
I. Fire
Fire 3ean it 3!t Fe 4&rt!it&! in &ri:in P n&t 'eliFerately ca!e'.
There must be actual inition" $isible spar0s o! !lames.
3xcludin destruction or damae caused to the property insured by
116) i: its o#n !ermentation natural heatin or spontaneous combustion"
i: its underoin any heatin or dryin process"
117) burnin o! property insured by order o! any Public 2uthority.
II. *i:Gtnin:
The policy co$ers all damae caused by lihtnin #hether an actual !ire starts orti
Lihtnin can cause damae to property either by !ire or by actual clea$ae o! !
property. It is not necessary that there should be inition as a result o! lihtin itO
*uite su!!icient i! there has been a direct stro0e o! lihtnin. 3$en mere charrinT
property a!!ected by lihtnin is co$ered under the policy.
III. E>5l&i&nMI35l&i&n
)hat is explosion'
2 sudden increase in pressure in the surroundin air or ases !rom sudden and $iolent
expansion o! any substance in their neihbourhood.
Industries susceptible to 3xplosion damae are Paint industries" %our (ills" Chemical
!actories etc.
It excludes loss" destruction o! or damae
118) to boilers 9other than domestic boilers:" economi&ers or other $essels"
machinery
or apparatus 9in #hich steam is enerated: or their contents resultin !rom their
o#n explosionBimplosion"
119) caused by centri!ual !orces.
I-. Aircra4t Da3a:e
Loss" Destruction or damae caused by 2ircra!t" other aerial or space de$ices and"
articles dropped there!rom excludin those caused by pressure #a$es
-. Ri&t= Stri9e an' Malici&! Da3a:e
Co$er is i$en in respect o!
120) 8eneral Riots, li0e the +harat +andh" Rail Ro0o
121) .peci!ic stri0es , li0e industrial stri0es.
Loss o! or $isible physical damae or destruction by external $iolent means directly
caused to the property insured but excludin those caused by
122) Total or partial cessation o! #or0 or the retardation or interruption or
cessation
o! any process or operations or omissions o! any 0ind.
123) Permanent or temporary di spossession resul ti n !rom
con!iscat i on"
commandeerin" re*uisition or destruction by order o! the 8o$ernment or any
la#!ully constituted 2uthority.
124) Permanent or temporary dispossession o! any buildin or plant or
unit o!
machinery resultin !rom the unla#!ul occupation by any person o! such buildin
or plant or unit or machinery or pre$ention o! access to the same.
125)+urlary" housebrea0in" the!t" larceny or any such attempt or any omission o!
any 0ind o! any person 9#hether or not such act is committed in the course o! a
disturbance o! public peace: in any malicious act.
126))ar ris0s" conse*uential loss.
I! the Company allees that the lossBdamae is not caused by any malicious act" the
burden o! pro$in the contrary shall be upon the insured.
Terr&ri3 Da3a:e E>cl!i&n 1arranty:
Not#ithstandin any pro$ision to the contrary #ithin this insurance it is areed that
this insurance excludes loss" damae cost or expense o! #hatsoe$er nature directly
or indirectly caused by" resultin !rom or in connection #ith any act o! terrorism
reardless o! any other cause or e$ent contributin concurrently or in any other
se*uence to the loss.
/or the purpose o! this endorsement an act o! terrorism means in act" includin but
not limited to the use o!!eree or $iolence andBor the threat thereo!" o! any person or
roup9s: o! persons #hether actin alone or on behal! o! or in connection #ith any
orani&ation9s: or o$ernment9s:" committed !or political" reliious" ideoloical or
similar purpose includin the intention to in!luence any o$ernment andBor to put the
public" or any section o! the public in !ear.
The #arranty also excludes loss" damae" cost or expenses o! #hatsoe$er nature
directly or indirectly caused by" resultin !rom or in connection #ith any action ta0en
in controllin" pre$entin" suppressin or in any #ay relatin to action ta0en in respect
o! any act o! terrorism.
I! the Company allees that by reason o! this exclusion" any loss" damae" cost
expenses is not co$ered by this insurance the burden o! pro$in the contrary shall 1
upon the insured. In the e$ent any portion o! this endorsement is !ound to be in$ali.i
or unen!orceable" the remainder shall remain in !ull !orce and e!!ect.
-I. St&r3= Cycl&ne= Ty5G&&n= Te35et= %!rricane= T&rna'&= Fl&&' an' Inundation
Loss
Destruction or damae directly caused by storm" cyclone" typhoon" tempest" hu
tornado" !lood or inundation excludin those resultin !rom earth*ua0e" $olcano
eruption or other con$ulsions o! nature. 9)here$er earth*ua0e co$er is i$en as an
4add on co$er4 the #ords 4excludin those resultin !rom earth*ua0e $olcanic eruption
or other con$ulsions o! nature4 shall stand deleted:.
-II. I35act Da3a:e
Loss o! or $isible physical damae or destruction caused to the property insured due
to impact by any railBroad $ehicle or animal by direct contact not belonin to or
o#ned by
127) the insured or any occupier o! the premises> or
128) their employees #hile actin in the course o! their employment.
-III. S!Fi'ence an' *an' li'e incl!'in: R&c9 li'e.
Loss" destruction or damae directly caused by .ubsidence o! part o! the site on
#hich the property stands or Land slideBRoc0 slide excludin"
129) the normal crac0in" settlement or beddin do#n o! ne# structures"
130) the settlement or mo$ement o! made up round"
131) coastal or ri$er erosion"
132) de!ecti$e desin or #or0manship or use o! de!ecti$e materials"
133) demolition" construction" structural alterations or repair o! any
property or
round#or0 or exca$ations.
134) "!rtin: an'M&r &ver4l&Cin: &4 1ater Tan9= A55arat! an' )i5e
135) Miile Tetin: &5erati&n
UL *ea9a:e 4r&3 A!t&3atic S5rin9ler Intallati&n e>cl!'in: l&= 'etr!cti&n
&r 'a3a:e ca!e' Fy
136) Repairs or alterations to the buildins or premises
137) Repairs" remo$al or extension o! the sprin0ler installation
138) De!ects in construction 0no#n to the Insured.
@II. "!G Fire
3xcludin loss" destruction or damae caused by !orest !ire.
Re!ltant *&e :
In addition to the losses actually caused by the operation o! the abo$e mentioned
perils" the !ollo#in resultin losses are also payable under the policy"
139)Damae to the property due to #ater or any other extinuishin aent used in
puttin out the /ire.
140)Damae due to the leitimate acts o! a /ire +riade.
141)Damae due to the !allin o! roots" !loors. Or #alls conse*uent to /ire.
142)Damae to property #hilst it is bein remo$ed !rom a burnin buildin.
143)Damae due to smo0e and charrin #hen an actual !ire is on.
Pro$ided that the liability o! the Company shall in no case exceed in respect o! each
item the sum expressed in the said .chedule to be insured thereon or in the #hole the
total sum insured hereby or such other sum or sums as may be substituted there!ore
by memorandum hereon or attached hereto sined by or on behal! o! the Company
g$ Activity E#
(r. Pra0ash purchased a ne# !lat. %e is interested in !ire co$er. List all the perils to #hich
he is applicable.
Units Fire Insurance ,1

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150)Loss" destruction or damae to the stoc0s in Cold .torae premises caused by
chane
o! temperature.
151)Loss" destruction or damae to any electrical machine" apparatus" !ixture" or
!ittin
arisin !rom or occasioned by o$er,runnin" excessi$e pressure" short circuitin"
arcin"
sel! heatin or lea0ae o! electricity !rom #hate$er cause 9lihtnin included:
pro$ided
that this exclusion shall apply only to the particular electrical machine"
apparatus"
!ixture or !ittin so a!!ected and not to other machines" apparatus" !ixtures or
!ittins
#hich may be destroyed or damaed by !ire so set up.
152)3xpenses necessarily incurred on 9i: 2rchitects" .ur$eyors and Consultin
3nineer<s
/ees and 9ii: Debris Remo$al by the insured !ollo#in a loss" destruction or
damae
to the Property insured by an insured peril in excess o! 3% and 1E o! the
claim
amount respecti$ely.
153)Loss o! earnins" loss by delay" loss o! mar0et or other conse*uential or indirect
loss
or damae o! any 0ind or description #hatsoe$er.
154)Loss" or damae by spoilae resultin !rom the retardation or interruption or
cessation
o! any process or operation caused by operation o! any o! the perils
co$ered.
155)Loss by the!t durin or a!ter the occurrence o! any insured peril except as
pro$ided
under riot" stri0e" and malicious damae co$er.
156)2ny loss or damae occasioned by or throuh or in conse*uence directly or
indirectly
due to earth*ua0e" $olcanic eruption or other con$ulsions o! nature.
157)Loss or damae to property insured i! remo$ed to any buildin or place other
than in
#hich it is herein stated to be insured" except machinery and e*uipment
temporarily
remo$ed !or repairs" cleanin" reno$ation or other similar purposes !or a period
n
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7
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JS$
Activ
ity F#
)rite
!i$e
exclus
ions
related
to
manu!
acturin
ris0.
4.
;.$ GENERA* CONDITIONS
This policy shall be $oidable in the e$ent o! mis,representation" mis,description or
nondisclosure o! any material particular.
2ll insurances under this policy shall cease on expiry o! se$en days !rom the date o!
!all or displacement o! any buildin or part thereo! or o! the #hole or any part o! any
rane o! buildins or o! any structure o! #hich such buildins !orms part.
Pro$ided that such a !all or displacement is not caused by insured perils" loss or
damae #hich is co$ered by this policy or #ould be co$ered i! such buildins" rane
o! buildins or structure #ere insured under this policy.
Not#ithstandin the abo$e" the Company sub?ect to an express notice bein i$en as
soon as possible but not later than se$en days o! any such !all or displacement may
aree to continue the insurance sub?ect to re$ised rates" terms and conditions as may
be decided by it and con!irmed in #ritin to this e!!ect.
Under any o! the !ollo#in circumstances the insurances the insurance cease to attach
as reards the property a!!ected unless the Insured" be!ore the occurrence o! any
loss or damae" obtains the sanction o! the Company sini!ied by endorsement upon
the policy by or on behal! o! the Company@
158) I! the trade or manu!acture carried on be altered" or i! the nature o! the
occupation
o! or other circumstances a!!ectin the buildin insured or containin the insured
property be chaned in such a #ay as to increase the ris0 o! loss or damae by
Insured Perils.
159) I! the buildin insured or containin the insured property becomes
unoccupied
and so remains !or a period o! more than C7 days.
This condition is deleted !or d#ellin ratable under .ection III o! /ire Tari!!.
c: I! the interest in the property passes !rom the insured other#ise than by #ill or
operation o! la#.
This insurance does not co$er any loss or damae to property #hich" at the time o!
the happenin o! such loss or damae" is insured by or #ould" but !or the existence o!
this policy" be insured by any marine policy or policies except in respect o! any
excess beyond the amount #hich #ould ha$e been payable under the marine policy
or policies had this insurance not been e!!ected.
160)This insurance may be terminated at any time at the re*uest o! the insured" in
#hich
case the Company #ill retain the premium at customary short period rate !or the
time
the policy has been in !orce. This insurance may also at any time be terminated at
the
option o! the Company on 1K days notice to that e!!ect bein i$en to the insured
in
#hich case the Company shall be liable to repay on demand a ratable proportion
o!
the premium !or the unexpired term !rom the date o! the cancellation.
161)9i: On the happenin o! any loss or damae the Insured shall !orth#ith i$e
notice
thereo! to the Company and shall #ithin 1K days a!ter the loss or
damae" or such !urther time as the Company may in #ritin allo# in that
behal!" deli$er to the Company.
162) 2 claim in #ritin !or the loss or damae containin as particular an
account
as may be reasonably practicable o! all the se$eral articles or items
or
property damaed or destroyed" and o! the amount o! the loss or
damat
thereto respecti$ely" ha$in reard to their $alue at the time o! the loss
or
damae not includin pro!it o! any 0ind.
163) Particulars o! all other insurances" i! any"
The insured shall also at all times at his o#n expense produce" procure
and i$e to the Company all such !urther particulars" plans"
speci!ication boo0s. $ouchers" in$oices" duplicates or copies thereo!"
documents" in$estiation reports 9internal B external:" proo!s and
in!ormation #ith respect to the claim and the oriin and cause o!
the loss and the circumstances under #hich the loss or damae
occurred" and any matter touchin the liability or ^ the amount o! the
liability o! the Company as may be reasonably re*uire by or on behal!
o! the Company toether #ith a declaration on oath or in other leal
!orm o! the truth o! the claim and o! any matters connected
there#ith.
No claim under this policy shall be payable unless the terms o! this
condition ha$e been complied #ith
9ii: In no case #hatsoe$er shall the Company be liable !or any loss or damae
a!ter the expiry o! 11 months !rom the happenin o! the lops or damae
u
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a
ction or arbitration" it bein expressly areed and declared that i! the
Company shall disclaim liability !or any claim hereunder and such claim
shall not #ithin 11 calendar months !rom the date o! the disclaimer ha$e
been made the sub?ect matter o! a suit in a court o! la# then the claim shall
!or all purposes be deemed to ha$e been abandoned and shall not
therea!ter be reco$erable hereunder.
P"
.time
at the
red in
ion o!
notice
ie. or
li$er to
int
.cmS
or
iamae
1 loss or
".."." R and Wn
boo0s.
ition
o the @es
under
Liability or y
re*uired >
oath or in
Dected
sdition
ie a!ter
eunless the
?ssly areed
m hereunder
"claimer iim
shall
therea!ter be
6. On the happenin o! loss or damae to any o! the property insured by this policy" the
Company may
164) enter and ta0e and 0eep possession o! the buildin or premises #here
the
loss or damae has happened"
165) ta0e possession o! or re*uire to be deli$ered to it any property o! the
insured in
the buildin or on the premises at the time o! the loss or damae"
166) 0eep possession o! any such property and examine" sort" arrane"
remo$e or
other#ise deal #ith the same"
167) sell any such property or dispose o!! the same !or account o! #hom
it may
concern.
The po#ers con!erred by this condition shall be exercisable by the Company at any
time until notice in #ritin is i$en by the insured that he ma0es no claim under the
policy" or i! any claim is made" until such claim is !inally determined or #ithdra#n" and
the Company shall not by any act done in the exercise or purported exercise o! its
po#ers hereunder" incur any liability to the insured or diminish its rihts to rely upon
any o! the conditions o! this policy in ans#er to any claim.
I! the insured or any person on his behal! shall not comply #ith the re*uirements o!
the Company or shall hinder or obstruct the Company" in the exercise o! its po#ers
hereunder" all bene!its under this policy shall be !or!eited.
The insured shall not in any case be entitled to abandon any property to the Company
#hether ta0en possession o! by the Company or not.
U" I! the claim be in any respect !raudulent" or i! any !alse declaration be made or used
in support thereo! or i! any !raudulent means or de$ices are used by the Insured or
any one actin on his behal! to obtain any bene!it under the policy or i! the loss or
damae be occasioned by the #ill!ul act" or #ith the conni$ance o! the Insured" all
bene!its under this policy shall be !or!eited.
c
i. I! the Company can obtain" reinstate or replace the property damaed or destroyed"
or any part thereo!" instead o! payin the amount o! the loss or damae" or ?oin #ith
any other Company or Insurer9s: in so doin" the Company shall not be bound to
reinstate exactly or completely but only as circumstances permit and in reasonably
su!!icient manner" and in no case shall the Company be bound to expend more in
reinstatement than it #ould ha$e tost to reinstate such property as it #as at the time
o! the occurrence o! such loss or damae nor more than the sum insured by the
Company thereon. I! the Company so elect to reinstate or replace any property the
insured shall at his o#n expense !urnish the Company #ith such plans" speci!ications"
measurements" *uantities and such other particulars as the Company may re*uire"
and no acts done" or caused to be done" by the Company #ith a $ie# to reinstatement
or replacement shall be deemed an election by the Company to reinstate or replace.
I! in any case the Company shall be unable to reinstate or repair the property hereby
insured" because o! any municipal or other reulations in !orce a!!ectin the alinment
o! streets or the construction o! buildins or other#ise" the Company shall" in e$ery
such case" only be liable to pay such sum as #ould be re*uisite to reinstate or repair
such property i! the same could la#!ully be reinstated to its !ormer condition.
168) I! the property hereby insured shall at the brea0in out o! any !ire or at the
commencement o! any destruction o! or damae to the property by any other peril
hereby insured aainst be collecti$ely o! reater $alue than the sum insured thereon
then the insured shall be considered as bein his o#n insurer !or the di!!erence and
shall bear ratable proportion o! the loss accordinly. 3$ery item i! more than one o!
the policy shall be separately sub?ect to this condition.
169) I! at the time o! any loss or damae happenin to any property hereby insured there
be any other subsistin insurance or insurances" #hether e!!ected by the insured or
by any other person or persons co$erin the same property" this Company shall not
be liable to pay or contribute more than its ratable proportion o! such loss or damae.
170) The insured shall at the expense o! the Company do and concur in doin" and permit
to be done" all such acts and thins as may be necessary or reasonably re*uired by
the Company !or the purpose o! en!orcin any rihts and remedies or o! obtainin
relie!er indemnity !rom other parties to #hich the Company shall be or #ould become
entitled or subroated" upon its payin !or or ma0in ood any loss or damae under
this policy" #hether such acts and thins shall be or become necessary or re*uired
be!ore or a!ter his indemni!ication by the Company.
171) I! any dispute or di!!erence shall arise as to the *uantum to be paid under this policy
9liability bein other#ise admitted: such di!!erence shall independently o! all other
*uestions be re!erred to the decision o! a sole arbitrator to be appointed in #ritin by
the parties to or i! they cannot aree upon a sinle arbitrator #ithin C7 days o! any
party in$o0in arbitration" the same shall be re!erred to a panel o! three arbitrators"
comprisin" o! t#o arbitrators" one to be appointed by each o! the parties to the
disputeBdi!!erence and the third arbitrator to be appointed by such t#o arbitrators
UnitK /ire Insurance ,1
and
arbitrati
on shall
be
conduct
ed under
and in
accorda
nce #ith
the
pro$isio
ns o! the
2rbitrati
on and
Concilia
tion 2ct"
1PPL. It
is
clearly
areed
and
understo
od that
no
di!!erenc
e or
dispute
shall be
re!erable
to
arbitrati
on as
herein
be!ore
pro$ided
" i! the
Compan
y has
disputed
or not
accepted
liability
under or
in
respect
o!
thi
s
pol
icy
.
It
is
he
re
by
ex
pr
ess
ly
sti
pu
lat
ed
an
d
de
cla
re
d
tha
t it
sh
all
be
a
co
nd
iti
on
pr
ec
ed
ent
to
an
y
ri
ht
o!
act
ion or
suit
upon
this
policy
that the
a#ard
by such
arbitrato
rBarbitrat
ors o!
the
amount
o! the
loss or
damae
shall be
!irst
obtained
.
172) 3$er
y notice
and
other
commun
ication
to the
Compan
y
re*uired
by these
conditio
ns
must be
#ritten
or
printed.
173) 2t all
times
durin
the
period
o!
insuranc
e o! this
po
lic
y
the
ins
ur
an
ce
co
$e
r
#i
ll
be
ma
int
ain
ed
to
the
!ul
l
ext
ent
o!
the
res
pe
cti
$e
su
m
ins
ur
ed
in
co
nsi
de
rat
io
n
o!
#h
ich
up
on
the
settleme
nt o! any
loss
under
this
policy"
pro,rata
premiu
m !or
the
unexpire
d
period
!rom the
date o!
such
loss to
the
expiry
o!
period
o!
insuranc
e !or the
amount
o! such
loss
shall be
payable
by the
insured
to the
Compan
y.
The
addition
al
premiu
m
re!erred
to abo$e
shall be
deducte
d !rom
the net
cl
ai
m
a
m
ou
nt
pa
ya
bl
e
un
de
r
th
e
po
lic
y.
T
hi
s
co
nti
nu
ou
s
co
$e
r
to
th
e
!ul
l
ex
te
nt
#i
ll
be
a$
ail
ab
le
no
t,
#ithstan
din any
pre$ious
loss !or
#hich
the
Compan
y may
ha$e
paid
hereund
er and
irrespect
i$e o!
the !act
#hether
the
addition
al
premiu
m as
mention
ed
abo$e
has
been
actually
paid or
not
!ollo#i
n such
loss.
The
intentio
n o! this
conditio
n is to
ensure
continui
ty o! the
co$er to
the
insured
sub?ect
only to
the riht
o! the
co
m
pa
ny
!or
de
du
cti
on
!ro
m
th
e
cla
im
a
m
ou
nt"
#
he
n
set
tle
d"
o!
pr
o,
rat
a
pr
e
mi
u
m
to
be
cal
cu
lat
ed
!r
o
m
th
e
da
te o!
loss till
expiry
o! the
policy.
Not#it
hstandi
n #hat
is
stated
abo$e"
the sum
insured
shall
stand
reduced
by the
amount
o! loss
in case
the
insured
immedi
ately on
occurre
nce o!
the loss
exercise
s his
option
not to
reinstat
e the
sum
insured
as
abo$e.
K.K
TERRORI
SM
Terrorism@
It is the
act #hich
includes"
but is not
limit
ed
to
the
use
o!!er
ee
or
$iol
ence
al B
or
the
thre
at o!
any
pers
on
or
rou
p9s:
o!
pers
ons
#het
her
actin
alon
e or
on
beha
l! or
in
conn
ectio
n
#ith
any
ora
ni&at
ion
or
o$e
rnm
ent
com
mitt
ed !or
political"re
liious
71 similar
purpose
includin
the
intention to
in!luence
any
o$ernment
and or to
put the
public in !ear.
F No
mid,term
co$er shall
be ranted
!or R.(D
Y
terrorism
co$er.
Properly and Liability Insurance
J Terrorism co$er #ill be a separate co$er only in con?unction #ith R.(D" so a terrorism
co$er #ill not be i$en #ithout R.(D.
J It is an optional co$er in con?unction #ith R.(D only.
Terr&ri3 Da3a:e C&ver En'&re3ent@ )hen the insured opts !or Terrorism Damae
Co$er by payin additional premium as pro$ided belo#" the co$er #ill be ranted by
attachin the !ollo#in endorsement@
4It is hereby declared and areed that in consideration o! payment o! additional premium
o! Rs.,,,,,,,M the Terrorism Damae 3xclusion )arranty o! the Riot" .tri0e" (alicious
Damae pro$ision !ormin part o! the #ithin mentioned policy stands deleted. The
expressionBs 4terrorism andBor act o! terrorism4 shall ha$e the same meanin as contained
in Terrorism Damae 3xclusion )arranty4.
M Ratin !or Terrorism co$er
7.17E !or d#ellins.
7.17 E !or non industrial ris0s. 9.ection III o! /ire Tari!!:
7.C7 E !or industrial ris0s. 9.ection I;" ;" ;I" Y ;II o! 2I/T Y Petro Tari!!:
This endorsement does not co$er loss o! or damae caused by
2: I. Total or partial cessation o! #or0 or the retardation or interruption or cessation
o! any process or operations or omissions o! any 0ind.
174)Permanent or temporary dispossession resultin !rom con!iscation"
commandeerin" re*uisition or destruction by order o! the 8o$ernment or any
la#!ully constituted authority.
175)Permanent or temporary dispossession o! any buildin or plant or unit or
machinery resultin !rom the unla#!ul occupation by any person o! such buildin
or plant or unit or machinery or pre$ention o! access to the same.
I;. +urlary" housebrea0in" the!t" larceny or any such attempt or any omission o!
any 0ind o! any person 9#hether or not such act is committed in the course o! a
disturbance o! public peace: in any action ta0en in respect o! an act o! terrorism.
+: Loss or damae" cost or expenses o! #hatsoe$er nature directly or indirectly caused
by" resultin !rom or in connection #ith any action ta0en in controllin" pre$entin"
suppressin or in any #ay relatin to action ta0en in respect o! any act o! terrorism.
I! the Company allees that by reason o! this exclusion" any loss" damae" cost or
expenses is not co$ered by this insurance the burden o! pro$in the contrary shall be
upon theinsured.
The limit o! co$erae under this endorsement shall not exceed Rs. 9insert here in
o$erall liability limit !or (aterial Damae ] Loss o! Pro!it:. In respect o! se$eral
insurances #ithin the same compoundBlocation #ith all the India insurers" the maximum
areate loss 9(D]LOP: payable per compoundBlocation shall be Rs. K77 crores.
I! the actual areate loss su!!ered at one compoundBlocation is more than Rs. K77
crores" the amounts payable under indi$idual policies shall be reduced on pro rata
basis.
The co$erae under this endorsement is sub?ect to an excess o! Rs. 7.KE o! the total
sum insured sub?ect to minimum o! Rs.--------9insert Rs. 1K777 or Rs. 1 la0h as
applicable: !or each and e$ery claim in respect o! both material damae and loss o!
pro!its combined.4
;.( D1E**INGS= OFFICES= %OTE*S= S%O)S= ETC. _____________________
This section pro$ides rates o! premium !or buildin B contents o!
176) D#ellins" o!!ices" schools" lodin and boardin etc.
177) Restaurants" hotels etc
178) .hops dealin in non,ha&ardous oods
179) .hops dealin in ha&ardous oods" motor $ehicles sho#rooms etc.
List o! ha&ardous oods is pro$ided in the tari!!.
K.6 INDUSTRIA*MMANUFACTURING RIS0S _________________________
This section pro$ides rates !or industrialBmanu!acturin ris0s and alphabetical list is pro$ided
in the tari!!. The entire insured property in the same compound is rated uni!ormly #ith the
Sme rate !or all process area" o!!ice" compound #all etc. D#ellin houses located inside
"ic compound o! a !actory are chared as per .ection III and not as per the rates o! the
industry.
;., UTI*ITIES *OCATED OUTSIDE T%E COM)OUNDS OF INDUSTRIA*M
MANUFACTURING RIS0S ______________________________________
This section pro$ides rates !or utili&es located outside the industrialBmanu!acturin ris0s.
/or example" boiler houses" *uality control laboratories" electric sub station" pump houses
etc.
;.. STORAGE RIS0S OUTSIDE T%E COM)OUNDS OF INDUSTRIA*M
MANUFACTURING RIS0S
The rates are pro$ided !or storae ris0s outside the compound o! industrialBmanu!acturin
ris0s and apply !or materials as #ell as buildin storin the materials.
Rates are as per the cateory o! the oods or material stored i.e.
180) Non ha&ardous oods 9lo#est rate:
181) Cateory I oods 9hih rates:
182) Cateory II and III oods 9hiher rates:
183) Coir #aste" Coir !ibre 9hihest rates:
.eparate rates !or cold storaes are pro$ided in this section.
;.1/ TAN0 FARMSMGAS %O*DERS OUTSIDE T%E COM)OUNDS OF
INDUSTRIA*MMANUFACTURING RIS0S
This section pro$ides rates !or tan0 !armsBas holders outside the compound o! industrialB
manu!acturin ris0s #hich are used !or storaes o! li*ui!ied ases" li*uids etc. in abo$e
.ections III to ;II" reduction in rates is allo#ed !or deletion o! .T/I andBor R.(TD
perils at the inception o! the policy.
;.11 SUMMARY
In this unit #e introduced the concepts o! !ire linsurance" scope and perils co$ered under
the standard !ire and special peril policy and eneral conditions and exclusions under this.
;arious perils are discussed in detailed #ith examples. 2lso by payin extra premium
additional co$ers can be co$ered. )e ha$e also discussed Terrorism co$er can also co$ered
#ith extra premium. )e ha$e discussed $arious sections and types o! property co$ered
under the tari!!.
/or more in!ormation re!er to the #ebsite @ Tari44
A'vi&ry C&33ittee CCC.tac.&r:.in
;.18 0EY 1ORDS
/ire
Fire In!rance
/loods
%!rricane
0!tccGa C&ntr!cti&n
.ilent Ri9
T2C
Terrorism
Tornado
;alued )&licy
2 combustion accompanied by a !lame or lo#" #hich escapes
its normal limits to cause damae.
Co$erae !or losses caused by !ire and lihtnin" as #ell as
the resultant damae caused by smo0e and #ater.
O$er!lo# o! #ater !rom its natural boundaries. (ore
speci!ically de!ined by the National /lood 2ct o! 1PLN as <a
eneral and temporary condition o! partial or complete
inundation o! normally dry land areas !rom 91: the o$er!lo#
o! inland or tidal #aters or 91: the unusual and rapid
accumulation or runo!! o! sur!ace #aters !rom any source<.
2 tropical storm mar0ed by extremely lo# barometric pressure
and circular #inds #ith a $elocity o! 117 miles an hour or
more.
)alls o! #ooden plan0sY or thatched lea$es rass etc. No
manu!acturin acti$ities are bein carried out. Tari!!,
2d$isory Committee. To put !ear into the public.
2 #hirlin #ind o$er land" accompanied by a !unnel,shaped
cloud. It is usually $ery $iolent and destructi$e in a narro#
path" o!ten !or many miles.
2n insurance contract in #hich the $alue o! the thin insured
and the amount to be paid in case o! total loss is settled at the
time o! ma0in the policy.
;.13 SE*F6ASSESSMENT 7UESTIONS
H1. )hat are the co$eraes a$ailable under the .tandard /ire Y .pecial Peril Policy'
H1. %o# many sections are there in the 2ll India /ire Tari!! ' 8i$e three names. HC.
8i$e the rules o! the cancellation o! the !ire policy.
H5. .tate true or !alse@
184)/ire policy once issued can not be cancelled by the insurer.
185)3$ery type o! property is insurable.
186)Claim experience discount can be considered !or d#ellins too.
187)Lon term policies are issued !or manu!acturin ris0s.
188)(inimum premium under !ire policy is Rs. K76,
189)Charin more than the tari!! rate is also a breach o! tari!!.
HK. 8i$e one example !or each@
190)Utilities located outside Industrial B(anu!acturin ris0.
191)Perils clubbed under ./TI.
192)Damaes co$ered under R.(D peril.
193).ilent ris0.
(.1 INTRODUCTION
In the last unit" #e ha$e discussed !ire tari!! .ections I to ;II. No# in this unit #e #ill
discuss .ection ;I3 and $arious special policies issued to the insured. .ection Iin includes
$arious co$ers #hich are optional and can be included in the policy as per insured<s
re*uirement #ith appropriate premium. There are certain important !eatures reardin
such 42dd On4 co$er.
.ome special policies are desined to meet the $arious re*uirements o! the insured" such
as Roater policy" Declaration policy" Reinstatement policy etc. )e #ill study these in
detail
(.8 ADD6ON CO-ERS
This section pro$ides <2dd On< co$ers. .tandard /ire and .pecial Perils Policy can be
extended to include these add,on co$ers@
1. 2rchitects" .ur$eyors and Consultin 3nineers /ees 9in excess o! CE claim amount:
J This extension pro$ides that the amount insured on buildins" machinery"
accessories etc. is understood to include architects" sur$eyors and consultin
enineers< !ees !or plans" tenders etc. in connection #ith the reinstatement o! the
buildin" machinery" accessories etc.
J The amount payable shall not exceed 3 % on the amount paid !or loss on property
insured by the policy.
J 2ny cost in connection #ith the preparation o! insured<s claim or estimate o!
loss in the e$ent o! damae by the insured perils are not payable.
1. Remo$al o! Debris 9in excess o! 1 E claim amount:
It includes costs and expenses necessarily incurred by the insured
194)In the remo$al o! debris !rom the premises o! the Insured>
195)Dismantlin or demolishin>
196).horin or proppin up.
The amount payable shall not exceed 1E on the paid loss.
Unite Fire In!rance 6 II
C. 9a:
Deterioration
o! stoc0s in
cold storae
premises due
to accidental
po#er !ailure
,
cons
e*ue
nt to
dam
ae
at
the
pre
mise
s o!
po#
er
stati
on
due
to
an
insu
red
peril.
9b:
Det
erio
ratio
n o!
stoc
0s
in
cold
stor
ae
pre
mis
es
due
to
ch
an
e
in
te
m
pe
rat
ur
e
ari
sin
ou
t
o!
los
s
or
da
ma
e
to
the
col
d
sto
ra
e
ma
chi
ne
ry
9ie
s:
in
the
Ins
ur
ed<
s
pr
e
mi
ses
du
e to
oper
atio
n o!
insu
red
peril
.
5. /orest
/ire
It co$ers
loss or
damae
to the
property
insured
directly
caused
by
burnin"
#hether
accident
al or
other#is
e" o!
!orests"
?unles
and
clearin
o! lands
by !ire.
197) Impa
ct
Damae
due to
insured<s
o#n
railBroad
$ehicles"
!or0 li!ts"
cranes"
stac0ers
and the
li0e and
articles
dro
pp
ed
the
re
!ro
m.
198)
.ponta
neous
Combu
stion
M
Lo
ss
or
da
m
a
e
by
!ir
e
on
ly
o!
or
to
th
e
pr
op
ert
y
in
su
re
d
ca
us
ed
by
its
o
#
n
!erment
ation"
natural
heatin
or sel!
heatin
or
dryin
process.
The
process
o!
spontane
ous
combust
ion starts
#ith
absorpti
on o!
oxyen
!rom the
air
resultin
in
oxidatio
n and
thus the
increase
in
temperat
ure
results in
inition.
Certain
commod
ities li0e
oil
ca0es"
rice
bran"
tobacco
etc. are
prone to
the ris0
o!
spontane
ou
s
co
m
bu
sti
on
.
T
he
rat
e
$a
rie
s
ac
co
rd
in
to
th
e
ca
te
o
ry
o!
co
m
m
od
ity
.
6.
Omiss
ion to
Insure
additi
ons"
alterat
ions
or
extens
ions.
The
clause
pro$ides
extensio
n to the
policy to
co$er
the
property
#hich
the
insured
may
erect or
ac*uire.
The
insured
has to
declare
addition
al
amount
as soon
as it
comes
to their
0no#led
e and
pay
addition
al
premiu
m !rom
the date
o!
inceptio
n.
R

3arth*ua0e
9/ire and
.hoc0:
It
co$ers
loss or
damae
caused
b
y
ea
rt
h
*
u
a
0
e
sh
o
c
0
in
c
o
n?
u
n
ct
io
n
#
it
h
or
di
n
ar
y
!i
re
.
T
h
e
ta
ri
!!
h
as
di
$i
d
e
d
th
e
country
into
!our
earth*u
a0e
&ones
and the
rate is
depends
on these
&ones.
District,
#ise
classi!ic
ation o!
earth*ua
0e &ones
is
pro$ide
d in the
tari!!.
iff.
P. .poilae (aterial Damae co$ers
The co$er is extended to material damae i.e.
199) Loss o! stoc0 in process
200) Damae to machinery" containers and its e*uipments.
The ris0 co$ered is that o! loss or damae by spoilae resultin !rom the retardin or
interruption or cessation o! any process or operation caused by any o! the perils
co$ered under the policy.
17. Lea0ae and Contamination Co$er
Physical loss o! oil B chemicals by lea0ae !rom their containers by accidental means
and by all accidental contaminations due to contact #ith !orein matter.
It excludes loss due to improper handlin" in!idelity the!t" e$aporation or shrin0ae
conse*uential loss o! any nature.
11. Temporary Remo$al o! .toc0s Clause
It is areed that the stoc0 insured hereby not exceedin 17E o! the total $alue o!
such stoc0" is co$ered #hile temporarily remo$ed to any other premises !or the
purpose o! !abrication or processin or !inishin or any other similar purpose.
This extension does not apply to stoc0.
11. Loss o! Rent Clause
I! the buildin is un!it !or occupation due to destruction or damae by the peril insured
aainst and sum insured on rent upto necessary period o! reinstatement.
1C. Insurance o! 2dditional 3xpenses o! Rent !or an 2lternati$e 2ccommodation
I! the oriinal premises cannot be tenanted due to occurrence o! insured peril" then
the di!!erence bet#een ne# and oriinal rent is actually payable.
15. .tart,up 3xpenses
It is hereby areed and declared that this policy extends to co$er start up costs #hich
ha$e been necessarily and reasonably incurred by the insured as a result o! loss or
damae co$ered by the policy.
Unit L /ire Insurance , II
(.3
RATES
OF ADD6
ON
CO-ER
T
a
F
l
e

;
.
(
r ,i!
<2..
or
.r. 2dd,On Co$er
No.
Rates applicable ;alue on #hich
premium has to be
chared
1. 2rchitects" .ur$eyors and
Consultin 3nineers /ees
9in excess o! CE:.
Policy Rate .peci!ied sum insured
not exceedin 6.KE o!
claim amount.
1" Remo$al o! Debris 9in excesses
o! 1E claim amount:.
Policy Rate .peci!ied sum insured
upto maximum 17E o!
sum insured.
9a: Deterioration o! .toc0s in Cold
.torae premises due to accidental
po#er !ailure conse*uent to damae at
the premises o! Po#er .tation due to an
insured peril. 9b: Deterioration o! stoc0s
in cold storae , premises due to
chane in temperature arisin out o!
loss or damae to the cold storae
machinery 9ies: in the insured<s
premises due to operation o! insured
peril.
1KE o! Policy
Rate
Policy Rate
.um insured o! stoc0s
.um insured o! stoc0s.
5. 5. /orest /ire. (inimum
Rs. K per
mile
.peci!ied sum insured.
K. Impact Damae due to Insured<s
o#n RailBRoad $ehicles" /or0 li!ts"
Cranes" .tac0ers and the li0e and articles
dropped there !rom.
KE o! Policy
Rate
Policy sum insured.
L. .pontaneous Combustion.
Cateory I oods Cateory II oods
9Please re!er list: Cateory III oods
Cateory I; oods
Rs.71.KE
Rs.7.K7E
Rs.7.6KE
Rs.1.77E
.um insured o! relati$e
commodity
6. Omission to Insure additions"
alteration or extension o! +( 2
Policy Rate KE o! sum insured
N. 3arth*ua0e Policy sum
Vone I Rs.1.77E Insured
Vone II Rs.7.K7E
Vone III Rs.7.17E
Vone I; Rs.7.17E
N&te @ D#ellin" o!!ices" hotels" shops etc. ratable under .ection III o! the tari!! can be
co$ered by charin uni!orm rate o! Re.7.17E7 reardless o! the &ones.
P. .poilae (aterial Damaer Co$er .toc0 in speci!ied
bloc0s" K times
policy Rate
(achinery"
Containers Y
;alue in stoc0s
.peci!ied bloc0s
3*uipments in
bloc0s" 1.K times (B2 $alue in
Policy Rate speci!ied bloc0
17. Lea0ae and Contamination Co$er
#here the tan0s are #ithin the
Lea0ae
Co$er
Lea0ae Y
Conta,
.peci!ied sum
insured
Insured<s o#n premises #here the
tan0s are located
only
Rs.KE7
mination
Rs.17E
Rs.LE7
11. Temporary Remo$al o! .toc0s
Clause.
17E o! policy Rate Policy sum insured.
11. Loss o! Rent clause. Policy Rate .peci!ied sum insured.
1C. Insurance o! 2dditional 3xpenses
or Rent /or an 2lternati$e
Policy Rate .peci!ied sum insured.
2ccommodation.
15. .tartup 3xpenses. Policy Rate .peci!ied sum insured.
Policy rate means either policy rate in case o! speci!ic industries or a$erae rate in case o!
multiple products manu!acturin unit.
Certain important !eatures reardin such additional co$er are@
201)They are i$en only as an extension that in no case thee perils can be co$ered #ithout
i$in the basic !ire co$er.
202)Conse*uential loss arisin out o! these perils are speci!ic exclusions. 2s such the !ire
policy does not co$er any conse*uential loss.
203)2ll these additional co$ers are sub?ect to an excess clause.
Unit i /ire Insurance , II
204)
The
o
n
u
s
o
!
p
r
o
$
i
n

t
h
a
t
t
h
e

l
o
s
s
a
r
o
s
e

a
s
a

r
e
s
u
l
t
o
205)
No re!und
i: The insured
ceases to ha$e
insurable
interest.
ii: No mid,term
co$er
s !or
an
identi
cal or
increa
sed
amou
nt.
206)
The
l
i
a
b
i
l
i
t
y

o
!
t
h
e

i
n
s
u
r
e
r
s
u
n
d
e
r
t
h
e

e
x
207)
Policy rate
8$
A:
2ssume
you are a
Ris0
(anaer o!
a
!irm.
.u
est
any
!i$e
add
on
co$er
s
#hich
are
use!ul
to your
!irm.
(.$
F*O
ATER
)O*I
CY

c )e
pass
to a
case
o!
client
#
t
p
o
l
i
c
y

9
i
e
s
:

c
a
n

b
e

i
s
s
u
e
d

!
o
r

s
t
o
c
0
s

a
t

$
a
r
i
o
u
s
Tari44 5r&vii&n re:ar'in: i!ance &4 4l&ater 5&licy
208) The oods intended to be co$ered by the policy should not be !loatin o$er unspeci!ied
placesBbuildins.
209) In the case o! policies co$erin in one amount the contents o! more than one odo#nB
or stoc0 in the open #hich are located in the same compound" and under the sole
occupation o! the insured" no !loater extra need to be chared.
210) In case .toc0s in a process bloc0 are co$ered under the !loater policy and the rate
!or the process bloc0 is hiher than the storae rate" the process rate plus 17E
loadin shall apply.
211) Presence o! 4 =utccha4 construction may be inored.
212) No !loater policy can be issued !or immo$able property.
213) 8ood internal audit and accountin procedure i$in complete details o! locations
and total stoc0 positions.
214) .uch policies are not issued to premises o! Transport contractors and /or#ardin
and clearin aents #hether in their o#n name or name o! he other party.
Ratin:: The rate shall be the hihest rate applicable to insured<s stoc0s at any location
#ith a loadin o! 17 E.
(.; DEC*ARATION )O*ICIES
215) Certain ad?ustments in insurance are necessary due to !luctuation in the $alue o! stoc0
durin the policy period and they may be under or o$er insurance. 2s a result" the
condition o! a$erae #ill be applicable in case o! under insurance and increase in cost
o! insurance in the case o! o$er insurance #ith no bene!it in return.
216) Due to !luctuation" the insured #ill ha$e to pass a number o! endorsements at !re*uent
inter$als to up date insurance" increase considerable administrati$e #or0. .ince the
ad?ustments are !or a short period" the cost o! insurance is substantially hih.
To ta0e care o! !re*uent !luctuations in stoc0sBstoc0 $alues" Declaration Policy 9ies:
can be ranted sub?ect to the !ollo#in conditions 9.tandard Declaration Clause A.
2nnexure 2 shall be attached to such policies:@
Unil L /ire Insurance ,
II
The
minimu
m sum
insured
shall be
Rs. 1
crore in
one or
more
locations
and the
sum
insured
shall not
be less
than Rs.
1K la0hs
in at
least one
o! these
locations
. It is
necessar
y that the
declared
$alues
should
approxi
mate to
this
!iure at
sometim
e durin
the policy
year.
i (onthly
declarati
ons
based on
i: the
a$erae
o! the
$alues at
ris
0
on
eac
h
da
y
o!
the
mo
nth
or
ii:
the
hi
he
st
$al
ue
at
ris
0
du
rin
the
mo
nth
sh
all
be
su
bm
itte
d
by
the
Ins
ure
d
lat
est
by
the
last
da
y
o! the
succeedi
n
month. I!
declarati
ons are
not
recei$ed
#ithin
the
speci!ied
period"
the !ull
sum
insured
under the
policy
shall be
deemed
to ha$e
been
declared.
Reductio
n in sum
insured
shall not
be
allo#ed
under
any
circumst
ances.
Re!und
o!
premium
on
ad?ustme
nt based
on the
declarati
onsBcanc
ellations
shall not
exceed
K7E o!
the total
pr
em
iu
m.
S
The
basis
o!
$alue
!or
decla
ration
shall
be
the
(ar0
et
;alue
anteri
or to
the
loss.
i
I
t

i
s

n
o
t

p
e
r
m
i
s
s
i
b
l
e

t
o

i
s
s
u
e

d
e
c
l
a
r
a
t
i
o
n

p
o
l
i
c
y

i
n

r
e
s
p
e
c
t

o
!

i
.

I
n
s
u
r
a
n
c
e

r
e
*
u
i
r
e
d

!
o
r

a

s
h
o
r
t

p
e
r
i
o
d
.

i
i
.

.
t
o
c
0
s

u
n
I!
a!
te
r
oc
cu
rr
en
ce
o!
an
y
lo
ss"
it
is
!o
un
d
th
at
th
e
a
m
ou
nt
o!
th
e
la
st
de
cl
ar
ati
on
pr
e$
io
us
to
th
e
lo
ss
is
less than
the
amount
that
ouht to
ha$e
been
declared
" then
the
amount
#hich
#ould
ha$e
been
reco$era
ble by
the
insured
shall be
reduced
in such
proporti
on as
the
amount
o! said
last
declarati
on bears
to the
amount
that
ouht to
ha$e
been
declared.
?? 2cti$ity
+ @
O
:edaration
policy is
more
use!ul to
#holesaler
s.4
Comment.
(.( F*OATER DEC*ARATION )O*ICIES
/loater Declaration policy9ies: can be issued sub?ect to a minimum sum insured o! Rs.1
crores and compliance #ith the Rules !or /loater and Declaration Policies respecti$ely
except that the minimum retention shall be N7E o! the annual premium. 9.tandard /loater
Clause,1 and Declaration Clause A" 2nnexure 2 shall be attached to such policies:@
(.+ *OSS OF )ROFIT KFIREEMCONSE7UENTIA* *OSS
INSURANCE Intr&'!cti&n:
217)2n ordinary !ire policy on buildins" machinery and contents indemni!ies the
insured
!or the physical loss o! damae to his property caused by a !ire andBor other
insured
perils. In other #ords" this policy is intended to put the insured in the pre,loss
position
so !ar as the insured<s buildin" machinery and contents as concerned.
218)I! the policy co$ers business property" the insured #ould" most probably"
li0e to
continue his business e$en a!ter the !ire. The !ire policy #ill enable the
insured to
repair" rebuild andBor reinstate the buildin and machinery and to purchase
once
aain the ra# material in$entory lost or damaed durin the !ire. The ordinary
policy
cannot help the insured more than this.
219)%o#e$er" the indi$idual #ho has insured +usiness Property #ould su!!er other
losses
too" as the business #ould be interrupted" resultin in reduction in 9or total loss
o!:
business turno$er or output. In these days o! speciali&ation scarcity and
complicated
trade procedures the repair rebuildin andBor reinstallation #ould ta0e
considerable
time durin #hich the turno$er #ould remain interrupted 9party o! !ully as the
case
may be:.
220)The chares on non,$ariable cost and expense items are 0no#n as standin
chares
li0e rent" interest" rates" taxes" salaries etc.
d: The conse*uential Loss 9/ire: Policy indemni!ies the insured in respect o! Net
P
r
o
!
i
t
p
l
u
s

.
t
a
n
d
i
n

C
h
a
r
e
s
.
In'e
3nity
)eri&
':
Ob$i
ously
the
insur
er
cannot a!!ord to co$er the liability !or an inde!inite time. The policy stipulates the
maximum period upto #hich the conse*uential losses are payable. This is 0no#n
as 4Indemnity Period4. I!" ho#e$er" the turno$er is normalised earlier" the losses
are payable only upto the time the turno$er is normalised.
c: d:
Unit 6 /ire Insurance ,
II

J Under
#ritin@
a: C.L.
9/i
re:
pol
icy
sti
pul
ate
s
tha
t
si
mu
lta
ne
ous
ly
#it
h
C
h:
d:
.
u
b

s
t
a
n
d
a
r
d

a
n
d

d
e
c
l
i
n
e
r
i
s
0
s
s
h
o
u
l
d

b
e
a
$
o
i
d
e
d
.
It
is
e
ne
ra
ll
y
i
$e
n
to
m
an
u!
ac
tu
ri
n
ris
0s
.
%
o
#
e$
er
ot
he
r
ris
0s
m
ay
be
co
$e
re
d.
I
n
s
p
e
c
ti
o
+
2
a
%
as
a
sc
h
e
d
ul
e
#
it
h
bl
o
c
0
#
is
e
d
es
cr
ip
ti
o
n
o!
ri
s0
"
cl
as
s
o!
c
o
ns
tr
u
ct
io
n
an
d
the
su
m
ins
ur
ed
to
be
co
m
ple
ted
.
c:
Re
*u
ire
s
de
tai
ls
o!
su
m
in
su
re
d"
pr
e
mi
u
.
2
p
p
li
c
a
b
le
t
o
ri
s
0
s
h
a
$
i
n
s
u
m

i
n
s
u
r
e
d
o
!
R
s.
1
7
7
c
r
o
r
e
s
an
d
ab
o$
e
9ot
he
r
tha
n
pet
roc
he
mi
cal
s:.
2
2
1
)
(
u
l
t
i
p
l
e

s
i
t
u
a
t
i
o
n

r
i
s
0
s
c
u
2
223) The peril insurance is not named.
224) .peci!ic exclusion #hose sini!icance to be care!ully studied and communicated.
225) Insurance on reinstatement $alue basis except stoc0. Underinsurance upto 1KE
#ai$ed.
226) No depreciation deducted !rom machinery brea0do#n total loss or partial loss 9limited
li!e e*uipment:.
227) The!t B burlary B accidental damae included.
228) /ire LOP included.
229) LOP due to +urlary and other accident damae co$ered.
230) (achinery +rea0do#n LOP option.
231) +usiness interruption co$ers can be extended to include suppliersBcustomers premises.
232) Transit ris0 inside compound Industrial Ris0s co$ered.
233) No declaration !acility can be i$en on stoc0.
234) Remo$al o! Debris co$ered #ithin sum insured on schedule.
235) Usual !acilities such as 3scalation@ 2rchitects B Consultin 3nineers /ees Clause.
Omission to insure additionsBalterations
Clause@ Temporary Remo$al o! .toc0
Clause@ Desination o! Property
Clause@ 2reed +an0 Clause are a$ailable to be speci!ically souht.
236) .inle document policy
237) Considerable premium sa$in on account o! di!!erent discounts !or ood !eatures"
Claim experience" pac0ae policy and $oluntary deductibles.
& Activity C:
Prepare a list o! the important !eatures o! an industrial all,ris0 insurance policy !rom the
point o! $ie# o! a director o! a bi !actory.

_"use.
calmer,
)ROCEDURA* FORMA*ITIES
238) To be completed and sined by Insured and Insurer.
239) %as a schedule #ith a bloc0#ise description o! ris0" class o! construction and
sum
insured to be completed.
240) Re*uires details o! sum insured" premium paid #ith claim date !or past K years.
D
9e: Inspection o! Ris0 by Company<s 3nineer.
To be completed and sined by insured and insurer.
%as a schedule #ith bloc0#ise description o! ris0" class o! construction and sum insured
to be completes.
Re*uires details o! sum insured In case .toc0s in a process bloc0 are co$ered under the
!loater policy and the rate !or the,process bloc0 is hiher than the storae rate" the process
rate plus 17E loadin shall apply.
N.+. 1@ Presence o! 4=utccha4 construction may be inored" premium paid #ith a claim
data !or the past !i$e years.
Inspection o! Ris0 by Company<s 3nineer.
L.P
DE6
TARI
FFIN
G OF
FIRE INSURANCE
______________________________________________________________
2s per IRD2 reul ations !ire business is de,tari!!in !rom 1 st Aanuary 1776.
+asically the rates #ill be dependent upon@ 1: (anaement 3xpenses.
241)Commission to aents" bro0erae" other incidental chares and business ac*uisition
cost.
242)Reser$es.
243)(arinal pro!it.
Due to de tari!!in insurer #ill impro$e in the !ollo#in areas@
i: Research and De$elop ne# products and mar0etin stratey.
ii: Corporate plannin and control on pricin o! the policies.
iii: 3!!ecti$e and e!!icient ser$ice to customer.
i$: .tron internal audit and control.
$: 2nalysis o! prices on actuarial basis.
(.1/ SUMMARY ___________________________________________________
In this unit" #e introduced the concepts o! 42dd,On4 co$ers in !ire insurance.
+y payin an extra premium" additional co$ers can be co$ered. They ha$e their o#n
!eatures reardin excess at the time o! claim. )e ha$e discussed $arious special types o!
policies #hich are desined as per insured<s re*uirements. They ha$e special !eatures"
scope and co$er to !ul!ill the needs o! clients.
/rom 1st Aanuary 177L" the de,tari!! o! the !ire business #ill start. Due to lobali&ation" the
IRD2 has ta0en the step o! de,tari!!in to cope #ith the #orld #ide situation.
Rates #ill be chared" ta0in into account manaement expenses" pro!it" claim experience
etc.
F&r 3&re in4&r3ati&n re4er CeFite:
Tari!! 2d$isory Committee CCC.tac.&r:.in
L.11 =3I)ORD.

2ct o! od
2dditional co$er
92dd on Co$er:
Conse*uential Loss
Debris Remo$al Clause
Declaration +asis
3scalation
3stimated (aximum
Loss 93(L:
/loater Policy
(PL 9(aximum
Probable Loss:
2ny accidental act #hich could not ha$e been pre$ented by
any amount o! human care or !orethouht.
2n insurance policy extended to co$er additional ris0 perils
such as stri0es" riots" ci$il commotion etc. on the payment o!
extra premium.
2 loss #hich is an indirect result o! an accident or !ire" e..
!ood spoiled throuh brea0do#n o! a re!rierator.
2n extension to the standard policy to co$er the cost o! ma0in
a seriously !ire,damaed buildin sa!e and remo$in debris.
2n arranement #hereby a pro$isional premium is paid and
subse*uently ad?usted by an additional or return premium on
receipt o! a declaration !rom the insured i$in details o! $alues
at ris0.
Pro$ision !or automatic increases on some de!ined basis in
premiums and sums insured.
2n expression used in !ire" explosion and material damae
policies only. 2n estimate o! the monetary loss #hich could
be sustained by insurers on a sinle ris0 as a result o! a sinle
!ire or explosion considered by the under#riter to be #ithin
the realms o! possibility.
2 policy under the terms o! #hich protection !ollo#s mo$eable
property" co$erin it #here$er it may be.
The larest loss thouht probable under a i$en insurance
policy. Normally applied to material damae ris0s #here the
total sum insured is not considered to be at ris0 !rom one loss
e$ent.
(.18 SE*F6ASSESSMENT 7UESTIONS
H1. Comment on the important !eatures o! 42dd,On4 co$ers.
H1. )hy #as the !loater policy desined'
HC. )rite salient !eatures o! the industrial all,ris0 policy in !ire.
H5. Discuss in detail the rules o! the re!und o! premium in !ire and declaration policy in
detail.
HK. )hat are the under#ritin aspects o! the loss o! pro!it policy'
HL. 8i$e the rules o! the cancellation o! !ire policy. H6. .tate True
or /alse@
244)Reinstatement $alue polices are i$en only !or stoc0.
245)Re!und under declaration policy cannot be more C7E.
246)The minimum sum to be insured !or a declaration policy is 1 crore.
247)The !loater declaration policy can be issued !or a minimum sum o! Rs. 1 crore
HN. /ill in the blan0s@
a: +y acceptin add on co$er o! Debris remo$al" the insured can et
,excess o! claim amount
248) Our country is di$ided into,,,,,,,,,,,,,.&ones !or the earth*ua0e co$er by T28
249) The !ire policy does not co$er !irst,,,,,,,,,Rs. !or each Y e$ery loss.
250) Lon term policies are allo#ed to,,,,,,,,,,,,,,,,,,,only.
alley in
1crore
2NN3UUR3,1
D& P D&nJt
FIRE INSURANCE
251) 8o throuh the policy thorouhly to ensure that you are properly co$ered.
252) Rene# the policy by payin premium be!ore expiry date to a$oid brea0 in
insurance.
253) In!orm the insurance company immediately o! any material chane in the ris0.
254) In!orm the Insurance company immediately i! the property insured is shi!ted to a
ne# location.
255) =eep all !ire extinuishin appliances in proper #or0in condition.
256) =eep all electrical installations in proper condition. 2$oid temporary and loose
connections.
257) Tr
ain all your employees in !ire !ihtin operations. G
258) Intimate the loss immediately to the insurance company.
259) Ta0e all possible loss minimi&ation measures.
260) Do not alter the a!!ected property" unless re*uired to sa!euard or minimi&e loss"
!or
inspection by sur$eyor and insurance company o!!icials.
2NN3UUR3 , II
Form No.:.
ehM-fl
THE NEW INDIA ASSURANCE COMPANY LTD.
Regional Office : Sharda Centre, 2nd floor, Off Karve Road, Pune -411 004.
Regd. & Head Office : 87, Mahatma Gandhi, Road, Fort, Mumbai - 400 001.
PROPOSAL FOR STANDARD FIRE & SPECIAL PERILS POLICY
FOR DWELLINGS, OFFICES, SHOPS & HOTELS
Acceptance of this proposal is subject to the rates & regulations of Tariff Advisory Committee's Tariff, The
property is not covered until the risk is accepted and premium paid.
For offie !"e o#l$
Underwriting Office Address & Code
Development Officer's Name & Code
Agent's / Broker's Name & Code
%To &e fille' !( &$ (ro(o"er)
01 .Name of proposer
02. Address of Proposer including pin code
Telephone Fax E-mail
OS.Business of Proposer
04 Policy to be" issued in favour of (List out all the
parties who have insurable interest including the
Financial nstitutions) f space is insufficient, please
attach Separate Sheet.
05. Location to be covered - Full Postal address with
door No. and Pin code* f space is insufficient,
please attach Separate Sheet.
06. Period of insurance From To
07. Would you like to delete these perils from the
basic cover (** strike off whichever is not applicable)
a) Flood and Cyclone group of perils
YES / NO "
b) Riot, Strike, Malicious and ,,.-,, . .,, ,,
Terrirism Damage
YEb
'
No

08. Would you like to cover the Plinth & Foundation
alongwith your building?
YES / NO " " ^
es
'
s
P
ec
'fy
um
'
nsure<
' on plinth
and foundation.
fti
Unite /ire Insurance , II
Architects, Surveyors & Consulting Engineers Fees YES/NO f yes, specify Sum nsured
(in excess of 3% of the claim amount)
Debris Removal (in excess of 1% claim amount)
Detonation of stocks in cold storage premises due to
failure of Electrical supply at terminal ends of Electric
service Feeders.
YES/NO
YES/NO
t yes, specify Sum nsured
Forest Fire YES/NO
mpact Damage due to insured's own vehicles YES/NO
Spontaneous Combustion YES/NO
Omission to insure additions, alterations or extensions YES/NO
Earthquake (Fire & Shock) YES/NO
10. Whether you have insured the same property with any
other insurance company (f yes, Give following details) i)
Name of the insurance company li) Period of insurance
YES/NO
iii) Property covered iv)
Sum nsured
11. Whether nsurance cover was declined by any Company or
impose any special conditions (Give details)
DETA
LS
ABOy
T
PRO
POS
ER'S
BUS
NES
S
COV
ERE
D AT
THE
LOC
ATIO
N
12. The insured property is occupied as : [ ]
13. f used as a shop, please declare whether the stocks stored include any stocks appearing in the list Qiven beiow. f yes,
whether the value of such goods YES/NO exceed 5% of ihe total value of stocks.
01. Celluloid goods. 02. Coir ioose, 3. Cracksrs and Fireworks, 4, Explosives of any kind, 05. Hay/Straw, 06. Hemp, 07. Jute loose,
08. Matches, 09, Methylated Spirit, 10. Nitro Cellulose Plastics, 11. Oils/ Ether/ ndustrial Solvents & nflammable Liquids tesrting at
and beiow 32 Degree Celsius (Closed cup test) 12. Paints with inflammable base having flash point below 32 Degree Celsius (Ctosed
cup test)- other than in sealed tins or drums, 13. Varnishes having a flash point below 32 Degree Celsius (Closed cup test) - other than
in sealed tins or drums, 14. Disinfectant liquids and liquid insecticides - other than in sealed tins or drams, 15. Vegetable fibres of arty
king including Rayon Fibre,
14. Fire Extlnguising appliances installed (Ceriiticate
os sum nsured from professional agencies to be
attached to for considering She quantum of discount)
Please tick the box beiow
Portable Extingushers
Trailer pumps
Fire Engine
Hydrant System
Sprinkler System
Fixed water system
15. The basis proposed for insurance (Building/ Market value basis/ Reinstatement value basis
Ceontents/ Furniture & Fittings) Strike out which ever is not applicable)
16. Building wise values (please nclude the kutcha buildings Compound wall and stocks in open also in this list."
Description of
block
Amount in Rs.
Age
Yrs
Construction
(Kutcha/
Pucca)
Building Excluding
Plinth & Foundation
but including
electrical wiring for
lighting
Furniture
and other
contents
Plant,
Machinery and
Accessories
Other
property to
be insured
specifically
Total
Total
Note"Buildings having walls and /or roofs of wooden planks/ thatched leaves and/or grass/hay of any kind/
bamboo/plastic clothe/canvas/ tarpaulin and the like are treated as "Kutcha" construction.
Del*r*+io# &$ i#"!re'
/We hereby declare that the statements made by me/use in this Proposal Form are true to be best of my/our knowledge
and belief and /We hereby agree that this declaration shall form the basis of this contract between me/us and the "THE
NEW NDA ASSURANCE COMPANY LMTED"
f any additions or alterations are carried out in the risk proposed after the submission of this proposal form then the same would
be conveyed to be insurers mmediately.
Date: Place:
SGNATURE OF PROPOSER
Prohi&i+io# of Re&*+e" %Se+io# ,- of +he I#"!r*#e A+)
No person shall allow or offer to allow either directly or indirectly as inducement to any person to take out renew or
continue an insurance in respect of any kind of risk relating to lives or property in ndia any rebate of the whole or part of the
commision payble any rebates as of the premium shown on the policy, nore shall any person taking out or nenewing or continuing a
policy accept any rebate except such rebate as may be allowed in accordance with the publised prospectuses or tables of the
insure. Provided that acceptance by an insurance agent of commission in connection with a policy of life insurance taken out by
himself on his own life shall not be acceptance of are take of premium within the meaning of this section if at the time of such
acceptance the insurance agent satisfies the prescribed conditions establishing that he is a Bonafide insurance agent employed
by the insurer.
Any preson making default in complying with the provision of this section shall be punishable with fine which may extend to five
hundred rupees only.
Dwellings, offices.
/ire Insurance , II
2NN3UUR3 , III
Form No.;___
THE NEW INDIA ASSURANCE COMPANY LIMITED
(Regd. & Head Office: 87, M. G. Road, Fort, Mumbai - 400 001 ]
PROPOSAL FOR STANDARD FIRE & SPECIAL PERILS POLICY
FOR INDUSTRIAL MANUFACTURING UNITS . GOD/WNS.
Acceptance of this proposal is subject to the rates & regulations of Tariff Advisory Committee's Tariff. The property is not
covered until the risk is accepted and premium paid.
%For offie !"e o#l$)
Development Officers' Name & Code
Agent's 1 Broker's Narne^&"Code
%To &e fille' !( &$ (ro(o"er)
261) Name of proposer
262) Address of Proposer including pin code
Telephone
Fax
. . .---------- E>rnail
03. Business of Proposer
04 Policy to be issued in favour of~( List out all the
parties who have insurable interest including the
Financial nstitutions).
(f space is insufficient, please attach Separate
sheet)
105. Location to be covered - Full Postal address with
| door No. and pin code)*
| (f space is insufficient, please attach Separate [
| Sheet) |
06. Period of insurance From To
i,_____________.................................................... -- ------------
07. Would you like to delete these perils from the a) Flood and Cyclone J~ YES/ NO"
basic cover group of perils
("strike off whichever is not applicable)
j b) Riot, Strike, YES/ NO*
Malicious and
Terrorism Damage
Would you like to cover the plinth & Foundation
along with your building Yes/ No f yes, Specify Sum nsured
on plinth & Foundation
Yes / No
j
Architects, Surveyors & Consulting Engineers Fees (in
excess of 3% of the claim amount) YES / NO
if yco, ofjcwiy vuin >M3uic;'~>
f yes, specify Sum nsured
Debris Removal { in excess of 1 % claim amount ) YES / NO
Deterioration of stocks in cold storage premises due to
failure of Electrical supply at terminal ends of Electric
service Feeders. YES /NO
Forest Fire mpact Damage due to insured's own
vehicles
YES / NO
YES / NO
Spontaneous Combustion YES /NO
Omission to insure additions, alterations or extensions YES / No
Earthquake ( Fire & Shock)
any other insurance company {f yes, Give following
details)
(i) Name of the insurance company
(ii) Period of insurance
(iii) Property covered(iv) Sum nsured
263) Whether nsurance cover was declined by any
Company or impose any special conditions (Give
details)
264) Premium & Claim details for the past three
preceding policy periods for all property in the same
location
Premium [Claims f Claims pending Nature of
received I Loss
(Fire/FlQodi'RSMTD)
DETALS ABOUT PROPOSER'S BUSNESS COVERED AT THE LOCATON
13.lf used as warehouse i godown (not located in a
manufacturing unit) please give the list of goods stored
14.f used as an industrial manufacturing unit, state the j
details of products manufactured at the location proposed j
15.11 used as an industrial manufacturing unit, please state
whether the factory is working or silent?
18.Fire Extinguishing appliances installed (Certificate of sum insured from
approved professional agencies to be
Please tick against the item
Unit 6 Fire In!rance 6 II

17,
The
basis
propo
sed for
insura
nce
(B
uild
ing
/M
ac
hin
ery
/Fu
rnit
ure
Fix
tur
es
&
Fitti
ng
s)
Stri
ke
out
whi
ch
ev
er
is
not
ap
plic
abl
e)
Mark
et
value
basis
/
Reins
tatem
ent
value
basis

18.
Building
wise
values
(please
include the
kutcha
buildings
and stocks
in open
also in this
list) ***
i

D
es
cri
pti
o
n
of!
A
m
o
u
nt
in
R
s.
Age]"
C
Foundation
but
including
electrical
wiring for
Stocks i Other Total
and stocks n
process **
property to
be
insured
specifically
Note "
ndicates
those
stocks
which are
covered on
normal
basis and
do not fall
under
Serial No.
19 A, B,
C&
O
belo
w.
***
B
u
i
l
d
i
n
g
s

h
a
v
i
n
g

w
a
l
l
s

a
n
d
/
o
r

r
o
o
f
s

o
f

w
o
o
d
e
n

p
l
a
Plant, | FurnitureTsiocks
Machinery j and other and
1 contents Accesso-
['Total
0i#i+$ f12i
_ lighting
v
a
s
/
t
a
r
p
a
u
l
i
n

a
n
d

t
h
e

l
i
k
e

a
r
e

t
r
e
a
t
e
d

a
s

"
K
u
t
c
h
a
"

c
o
n
s
t
r
u
c
t
i
o
n
.
19. Special
coverage for
stocks only-
Please tick
in the box
below and
give the
amount to
be insured
against each
| A.
Floaterbasis
i Stocks at
various
locations
(process
blocks,
godowns
and/or in
o
p
e
n
et
c)
ca
n
b
e
co
ve
re
d
o
n
flo
at
er
b
as
is
u
n
d
er
si
n
gl
e

s
u
m
in
s
ur
e
d.
Locatio
ns
(Postal
Addres
s with
Door
No, Pin
code)
Attach
separat
e
sheet,
if
space
is
inadeq
uate.
Specif
y
nature
of
stock
and
also
the
status
of
locatio
n
whethe
r
stock in
proces
s block,
stock
in
godow
n/open
storag
e
i
n
s
t
Amount in Rs.

Locations (Postal Address with door No. and pincode) Attach
separate sheet, if space in inadequate Specify nature of stock
and also the status of location whether stock in process block,
Stock in godown/open storage inside the industrial Compound
stock in godown/open storage outside ndustrial compound.
Amount in Rs.
Note:
Minimum sum insured per location should be Rs. 1 Crore and policy not be issued on short
period basis Stocks in process & stocks stored at Railway siding cannot be covered
Basis of declaration
(Tick appropriate)
265) Highest value at any one day during the month
266) Average of the highest value on each day
C. On Floater Declaration basis
stocks which fluctuate in value as well as stored at various locations under single
sum insured can be covered
Location (postal address with door No. & Pincode) Attach
separate sheet, if space is inadequate Specify nature of stock
and also the status of location whether stock in process block,
Stock in godown/open storage inside the industrial compound
Stock in godown/open storage outside industrial compound
Amount in Rs.
Note:
Minimum sum insured should be Rs. 2 crores.
Stocks in process & stocks stored at Railway sidings cannot be covered
Basis of declaration a) Highest value at any one day during the month
(Tick appropriate) b) Average of the highest value on each day
D. Stocks stored in open (located outside the factory compound)
Nature and Details of stocks stored in open
Locations (postal address with pincode including survey
No.)
Amount in Rs.
Unit L /ire In!rance 6 II
Tank farm and gas holders (located outside the factory compound)
Nature and Details of stocks stored
!
ocations (postal address with pin code including survey No.) Amount in Rs,
Declaration by insured
We hereby declare that the statements made by me / us in this Proposal Form are true to the best of my /our knowledge
ind belief and /We hereby agree that this declaration shall form the basis of this contract between me/us and the" THE
NEW NDA ASSURANCE COMPANY LMTED",
' any additions or alterations are carried out in the risk proposed after the.submission of this proposal form then the same
voukt be conveyed to the insurers immediately.
J3B
Prohibition of Re&*+e" %Se+io# ,- of +he I#"!r*#e A+)
No person shall allow or offer to allow either directly or indirectly as inducement to any person to take out renew or
continue an insurance in respect of any kind of risk relating to lives or property in ndia any rebate of the whole or part
of the commission payable any rebates as of the premium shown on the policy, nor shall any person taking out or
renewing or continuing a policy accept any rebate except such rebate as may be allowed in accordance with the
published prospectuses or tables of the insurer Provided that acceptance by an insurance agent of commission in
connection with a policy of life insurance taken out by himself on his own life shall not be acceptance of or taken as
premium within the meaning of this section if at the time of such acceptance the insurance agent satisfies the
prescribed conditions establishing that he is a Bonafide insurance agent employed by the insurer.
Any person making default in complying with the provision of this section shall be punishable with fine which may
extend to five hundred rupees only.
& Sp Perils
CL2U.3.
The !ollo#in clauses shall be attached to the policy #here$er they are re*uired.
2 28R33D +2N= CL2U.3
2ll policies in #hich a +an0B/inancial Institution has interest shall be issued in the
name o! +an0B/inancial Institution and o#ner or mortaer and shall contain a suitable
clause to protect their interest. 2 specimen copy o! the Clause is i$en hereunder.
<4It is hereby declared and areed@
267)That upon any monies becomin payable under this policy the same shall be
paid by the Company to the +an0 and such part o! any monies so paid as may
relate to the interests o! other parties insured hereunder shall be recei$ed by the
+an0 as 2ents !or such other parties.
268)That the receipts o! the +an0 shall be complete dischare o! the Company
there!ore and shall be bindin on all the parties insured hereunder.
N.+@ The +an0 shall mean the !irst named /inancial InstitutionB +an0 named in
the policy.
269)That i! and #hene$er any notice shall be re*uired to be i$en or other
communication shall be re*uired to be made by the Company to the insured or
any o! them in any matter arisin under or in connection #ith this policy such
notice or other communication shall be deemed to ha$e been su!!iciently i$en
or made I! i$en or made to the +an0.
270)That any ad?ustment" settlement" compromise or re!erence to arbitration in
connection #ith any dispute bet#een the Company and the insured or any o!
them arisin under or in connection #ith this policy i! made by the +an0 shall be
$alid and bindin on all parties insured hereunder but not so as to impair she
rihts o! the +an0 to reco$er the !ull amount o! any claim it may ha$e on oii$i
1
parties insured hereunder.
271)That this insurance so !ar only as it relates to the interest o! the +an0 therein ,
not cease to attach to any o! the insured property by reason o! the operatiu
condition C o! Policy except #here a breach o! the condition has beencomm
by the +an0 or its duly authorised aents or ser$ants and this insurance shall
be in$alidated by any act or omission on the part o! any other party insi
Unit L /ire Insurance ,
II

i
i
>
he
re
un
de
r
#
he
re
by
th
e
ris
0
is
in
cr
ea
se
d

o
r

b
y

a
n
y
t
h
i
n

b
e
i
n

d
o
n
e

t
o

u
p
o
n

o
r

i
n

a
n
y

b
uil
di
n
he
re
by
in
su
re
d
or
an
y
bu
ild
in
in
#
hi
ch
th
e
o
od
s
in
su
re
d
un
de
r
th
e
po
lic
y
ar
e
st
or
ed
#i
th
ou
t
t
h
e

0
n
o
#
l
e
d
e

o
!
t
h
e

+
a
n
0

p
r
o
$
i
d
e
d

a
l
#
a
y
s

t
h
a
t
t
h
e
+
an
0
sh
all
no
ti!
y
th
e
C
o
m
pa
ny
o!
an
y
ch
an
e
o!
o
#
ne
rs
hi
p
or
alt
er
ati
on
s
or
in
cr
ea
se
o!
ha
&a
rd
s
no
t
p
e
r
m
i
t
t
e
d

b
y

t
h
i
s

i
n
s
u
r
a
n
c
e

a
s

s
o
o
n

a
s

t
h
e

s
a
m
e
s
ha
ll
co
m
e
to
(
s
0n
o
#l
ed
e
an
d
sh
all
on
de
m
an
d
pa
y
to
th
e
C
o
m
pa
ny
th
e
ne
ce
ss
ar
y
ad
dit
io
na
l
pr
e
m
i
u
m

!
r
o
m

t
h
e

t
i
m
e

#
h
e
n

s
u
c
h

i
n
c
r
e
a
s
e

o
!
r
i
s
0
s

!
irs
t
to
o0
pl
ac
e
an
d
i: It is
!u
rt
h
er
a
r
ee
d
th
at
#
h
e
n
e
$
er
th
e
C
o
m
p
a
n
y
sh
al
l
p
a
y
th
e
+
a
n
N
I
4
CE DESIGNATION OF )RO)ERTY C*AUSE
4/or the purpose o! determinin" #here necessary" the item under #hich any property
is insured" the insurers aree to accept the desination under #hich the properly has
been entered in the insured<s boo0s.4
DE REINSTATEMENT -A*UE )O*ICIES
Reinstatement $alue insurance may be ranted on +uildins" (achinery" /urniture.
/ixtures and /ittins only sub?ect to the incorporation o! the !ollo#in memorandum
in the policy@
4It is hereby declared and areed that in the e$ent o! the property Insured under
9Item Nos..............: o! the #ithin policy bein destroyed or damaed" the basis
upon #hich the amount payable under 9each o! the said items o!: the policy is to 0
calculated" shall be cost o! replacin or reinstatin on the same site or any other site
#ith property o! the same 0ind or type but not superior to or more extensi$e than the
insured property #hen ne# as on date o! the loss" sub?ect to the !ollo#in .p
Pro$isions and sub?ect also to the terms and conditions o! the policy except in sol
as the same may be $aried hereby.
.pecial Pro$isions
272)The #or0 o! replacement or reinstatement 9#hich may be carried out i
another site and in any manner suitable to the re*uirements o! the insured sub
to the liability o! the Company not bein thereby increased: must be con
and carried out #ith reasonable dispatch and in any case must be comply
#ithin 11 months a!ter the destruction or damae or #ithin such !urther tin
the Company may 9durin the said 11 months: in #ritin allo#" other#is
payment beyond the amount #hich #ould ha$e been payable under the poli
this memorandum had not been incorporated therein shall be made.
273)Until expenditure has been incurred by the Insured In replacin or reinsti
property destroyed or damaed the Company shall not be liable !or any pay
in excess o! the amount #hich #ould ha$e been payable under the policy i!T
memorandum had not been incorporated therein.
274)I! at the time o! replacement or reinstatement the sum representin thee?
#hich #ould ha$e been incurred in replacement or reinstatement i! the D
the property co$ered had been destroyed" exceeds the .um insured the
Unit L /ire Insurance ,
II

i
0
at
th
e
co
m
m
en
ce
m
en
t
o!
an
y
de
str
uc
ti
o
n
o!
or
da
m
a
e
to
su
ch
pr
op
ert
y
by
an
y
o!
the
pe
ril
s
ins
ur
ed
a
ain
st
by
thi
s
po
lic
y"
the
n
the
ins
ur
ed
sh
all
be
co
nsi
de
re
d
bein
his
o#n
insurer
!or the
excess
and
shall
bear a
ratable
proport
ion o!
the
loss
accord
inly.
3ach
item o!
the
policy
9i!
more
than
one: to
#hich
this
memor
andum
applies
shall
be
separat
ely
sub?ect
to the
!oreoi
n
pro$isi
on.
5.
Th
is
(
e
m
o
275)
the
Ins
ure
d
!ail
s to
inti
mat
e to
the
Co
mp
any
#it
hin
L
mo
nth
s
!ro
m
the
dat
e
o!
des
tru
ctio
n
or
da
ma
e
or
suc
h
!urt
her
tim
e
as
the
Co
mp
an
y
m
ay
in
#
rit
in

all
o
#
hi
s
in
te
nt
io
n
to
re
pl
ac
e
or
re
in
st
at
e
th
e
pr
op
er
ty
de
str
oy
ed
or
da
m
a
ed
.
276)
the
In
su
re
d
is
un
ab
le
or
un
#i
lli
n
to
re
pl
ac
e
or
rei
nst
ate
th
e
pr
op
ert
y
de
str
oy
ed
or
da
ma
e
d
on
the
sa
me
or
an
ot
3
:
*
O
C
A
*
A
U
T
%
O
R
I
T
I
E
S

C
*
A
U
S
E
Rei
nst
ate
me
nt
;al
ue
Pol
icy
ma
y
be
ext
en
de
d
t
4
1
:

T
h
e

a
m
o
u
n
t

r
e
c
o
$
e
r
a
b
l
e

u
n
d
e
r

t
h
i
s

e
x
t
e
n
s
i
o
n

s
h
a
ll
n
o
t
i
n
c
l
u
d
e
@
a:
th
e
co
st
in
cu
rre
d
in
co
m
pl
yi
n
#i
th
an
y
o!
th
e
a!
or
es
ai
d
Re
u
lat
io
ns
or
+y
e,
la
#s"
i: in
ii: in
respect
o!
destruct
ion or
damae not
insured by
the policy
iii: under
i$: in
!rom the insurance by this policy: o! that portion o! the property
destroyed or damaed"
277) the additional cost that #ould ha$e been re*uired to ma0e ood the property
damaed or destroyed to a condition e*ual to its condition #hen ne#" had
the necessity to comply #ith any o! the a!oresaid Reulations o! +ye,la#s
not arisen"
278) the amount o! any rate" tax" duty" de$elopment or other chare or assessment
arisin out o! capital appreciation #hich may be payable in respect o! the
property or by the o#ner thereo! by reason o! compliance #ith any o! the
a!oresaid Reulations or +ye,La#s.
279)The #or0 o! reinstatement must be commenced and carried out #ith reasonable
despatch and in any case must be completed #ithin t#el$e months a!ter the
destruction or damae or #ithin such !urther time as the Insurers may 9durin
the said t#el$e months: in #ritin allo# and may be carried out #holly or partially
upon another site 9i! the !oresaid Reulations o! +ye,La#s so necessitate: sub?ect
to the liability o! the Insurer under this extension not bein thereby increased.
280)I! the liability o! the insurer under 9any item o!: the policy apart !rom this extension
shall be reduced by the application o! any o! the terms and conditions o! the
policy then the liability o! the Insurers under this extension 9in respect o! any
such item: shall be reduced in li0e proportion.
281)The total amount reco$erable under any item o! the policy shall not exceed the
sum insured thereby.
282)2ll the conditions o! the policy except inso!ar as they may be hereby expressly
$aried shall apply as i! they had been incorporated herein.4
No a''iti&nal 5re3i!3 Gall Fe cGar:e' 4&r incl!i&n &4 tGi cla!e in this
5&licy.
EE ESCA*ATION C*AUSE
4In consideration o! the payment o! an additional premium amountin to K7E o! the
premium produced by applyin the speci!ied percentae to the !irst or the annual
premium as appropriate on the under noted items9s: the .um9s: Insured thereby
shall" durin the period o! insurance" be increased each day by an amount representin
1BCLKth o! the speci!ied percentae increase per annum.
/ire Insurance , II
Item Number .peci!ied percentae increase per annum
Unless speci!ically areed to the contrary the pro$isions o! this clause shall on apply
to the sure insured in !orce at the commencement o! each period o! insurance. 2t
each rene#al date the insured shall noti!y the Insurers @,
9i: the sums to be insured under each item abo$e" but in the absence o! such
instructions the .ums Insured by the abo$e items shall be those stated on the
policy 9as amended by any endorsement e!!ecti$e prior to the a!oresaid rene#al
date: to #hich shall be added the increases #hich ha$e accrued under this Clause
durin the period o! insurance upto that rene#al date" and
9ii: the speci!ied percentae increase9s: re*uired !or the !orthcomin period o!
insurance" but in the absence o! instructions to the contrary prior to rene#al
date the existin percentae increase shall apply !or the period o! insurance
!rom rene#al.
2ll the conditions o! the policy in so !ar as they may be hereby expressly $aried shall
apply as i! they had been incorporated herein.4
(,} ARC%ITECTS= SUR-EYORS AND CONSU*TING ENGINEERJS FEES
9upto CE o! the claim amount:
4It is hereby declared and understood that the expenses incurred to#ards 2rchitects.
.ur$eyors and Consultin 3nineers !ees !or plans" speci!ication tenders" *uantities
and ser$ices in connection #ith the superintendence o! the reinstatement !or the
+uildin" (achinery" 2ccessories and e*uipment insured under this policy is co$ered
upto CE o! the ad?usted loss" butit is understood that this does not include any costs
in connection #ith the preparation o! the insured<s claim or estimate o! loss in the
e$ent o! damae by insured perils4.
%: REMO-A* OF DE"RIS C*AUSE 9upto 1 E o! the claim amount:
It is hereby declared and areed that the expenses incurred upto 1 E o! the claim
imount is included in the sum insured on@
M a: Remo$al o! debris !rom the premises o! the Insured>
1:: dismantlin or demolishin> c: shorin up or
proppin.4
N&te@ 9b: Y 9c: abo$e should be deleted #hen neither +uildin nor (achinery are
co$ered"
IE F*OATER C*AUSE
4In consideration o! /loater 3xtra chared o$er and abo$e the policy rate the .um
insured in areate under the policy is a$ailable !or any one" more" or all locations as
speci!ied in respect o! mo$able property.
2t all times durin the currency o! this policy the insured should ha$e a ood internal
audit and accountin procedure under #hich the total amount at ris0 and the locations
can be established at any particular time i! re*uired.
The chanes in the address o! locations speci!ically dictated at inception should be
communicated:.
<E DEC*ARATION C*AUSE
1: In consideration o! the premium by this policy bein pro$isional in that it is
sub?ect to ad?ustment on expiry o! each period o! insurance.
4The Insured arees to declare to the.......................MCompany in #ritin the
$alue o! his stoc0s 9other than retail: less any amount insured by Policies other
than declaration policies" in each separate buildin or non,communicatin
compartment or in the open on the !ollo#in basis namely 1Z a$erae o! the
$alues at ris0 on each day o! the month or 1Z the hihest $alue at ris0 durin the
month and to ma0e such declaration9s: latest by the last day o! the succeedin
month. .uch declaration9s: shall be sined by the Insured or by a responsible
person authorised to sin on his behal!. 9< Insert the name o! the Insurer:
I! other policies on declaration basis co$er the stoc0s hereby insured" the
declarations shall be made so as to apportion to each policy a share o! the $alue
o! the stoc0s insured under such declaration policies" PRO R2T2 to the respecti$e
amounts named in the policies.
In the e$ent o! a declaration not bein made latest by the last day o! the succeedin
month" the insured shall be deemed to ha$e declared the .um insured hereby as
the $alue at ris0.
On the expiry o! each period o! insurance the premium shall be calculated at the
rate o!...................9insert the Tari!! rate: on the a$erae .um Insured namely"
Unit L /ire In!rance 6 II
\ IS
the total o! the $alues declared or deemed to ha$e been declared di$ided by the
number o! declarations deemed to ha$e been made.
I! the resultant premium is less than the pro$isional premium" the di!!erence shall
be repaid to the Insured but such repayment shall not exceed K7E o! the
pro$isional premium.
/urther it is hereby areed and understood that no reduction in sum insured shall
be allo#ed durin the currency o! the policy
283) The basis o! $alue !or declarations shall be the mar0et $alue and any
lose
hereunder shall be settled on the basis o! the (ar0et ;alue immediately anterior
to the loss.
284) I! at the time o! any loss" there be any subsistin insurance or insurances
on
other than a declaration bests" #hether e!!ected by the Insured or by any other
person or persons" co$erin the stoc0s hereby insured" this policy shall apply
only to the excess o! the $alue o! such stoc0s at the time o! the toes o$er the
.um insured by such other insurance or insurances" and this Company shall not
be liable to pay or contribute more than that proportion o! such lose #hich such
excess 9or" i! there be other declaration insurances co$erin the same stoc0s" a
ratable proportion o! such excess: but not exceedin the .um Insured hereby"
bears to the total $alue o! the stoc0s.
285) I! a!ter the occurrence o! a loss it is !ound that the amount o! the last
declaration
pre$ious to the loss is less than the amount that ouht to ha$e been declared.
The amount #hich #ould ha$e been reco$erable by the Insured shall be reduced
in
suc
h
pro
por
tio
n
as
the
am
oun
t o!
the
said last declaration bears to the amount
that ouht to ha$e been declared.
286) Not#ithstandin the occurrence o! loss it is understood that the .um
Insured
#ill be maintained at all times durin the currency o! the policy and the Insured
there!ore underta0es to pay extra premium on the amount o! any loss pro rata
!rom the date o! such lose to the expiry o! the period o! insurance" the premium
bein calculated at the rate applicable to the stoc0s destroyed and such extra
premium shall not be ta0en into account in" and shall be distinct !rom" the !inal
ad?ustment o! premium.
L: In the e$ent o! this policy bein cancelled by the Insured durin its currency
9#hether stoc0s exist or not: the premium to be retained by the Company shall
Insurance
be the appropriate short period premium calculated on the a$erae amount
insured upto the date o! cancellemnt" or K7E o! the pro$isional premium
#hiche$er is reater. Not#ithstandin the abo$e" i! the policy is cancelled by the
insured a!ter a loss has occurred" the premium to be retained by the company
shall be the PRO R2T2 proportion o! the premium calculated on the a$erae
amount insured upto the date o! cancellation plus the PRO R2T2 proportion o!
the premium !rom the date o! loss to the expiry o! the period o! insurance on the
amount o! bas paid" or K7E o! the pro$isional premium #hiche$er is reater"
287)The maximum li ability o! the Company shall not exceed the .um insured hereby
and premium shall not be recei$able on $alue in excess thereo!. The .um Insured
may" ho#e$er" be increased by prior areement #ith the Company in #hich
e$ent the ne# .um insured and the date !rom #hich it is e!!ecti$e #ill be recorded
on the policy by endorsement in the e$ent o! an increase in the .um Insured
bein areed to" the Company shall chare on such increased sum an additional
pro$isional premium on a basis proportionate to the unexpired period o! the
policy and upon expiry o! each period o! insurance the total pro$isional premium
so paid shall be ad?usted as pro$ided !or in Clause 1 abo$e. I! durin the currency
o! the policy" the rate !or the class o! ris0 to #hich the insurance applies is
re$ised" and an increase in the .um insured under a Declaration Policy is areed
to" the Company shall chare on such increased sum an additional pro$isional
premium on a basis proportionate to the unexpired period o! policy" at the rate
at #hich the insurance #as oriinally e!!ected and upon expiry o! each period o!
insurance the total pro$isional premium so paid shall be ad?usted as pro$ided
!or in Clause 1 abo$e.
288)I! the stoc0s hereby insured shall at the time o! loss be collecti$ely o! reater
$alue than the .um Insured thereon" then the Insured shall be considered as
bein his o#n insurer !or the di!!erence and shall bear a ratable proportion o! the
loss accordinly. 3$ery item" i! more than one" on stoc0 shall be separately
sub?ect to this condition.
289)It is #arranted that e$ery other policy or a declaration basis co$erin the stoc0s
insured hereby shall be identical in #ordin #ith this policy.
290)This insurance is sub?ect in all respects to the printed conditions o! the policy
except inso!ar as they may be $aried by the abo$e conditions.
Unit 6 /ire Insurance ,
II

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ANNE@URE6 I-
Regional Office : SHARADA CENTRE, 2nd Floor, Behind Nal Stop, Karve Road, Pune 4
FIRE INSURANCE CLAIM FORM
1. ift'OT W 3>1 TFT 5^ 'TW! :
Name and Address of nsured :
2. str*
5
?/ ênrnrr' Tnê?, cpwi fi'ir wcSFfro "$ t
Please give following details pertaining to at ail the policies involved in fire accident:
Policy Number
Risk Covered Location
.um
nsured
Rs,
Estimated amount of
loss, Rs,
291) ^RT sraft Period of nsurance
292) îPt '#( fcft afR ^rft m ^*ra Date and Time of loss.
5 frft ^ H'flct *? ?rf% tRi wrro
(f-inn VT- qftfârfcitft <P ^3^13 ^ f^r^ gift fi)
Nature and Cause of Loss (Please describe the
circumstances leading to the loss)
E> < pq ffan

Give details of insurance with any other insurance
company on the risk involved in fire/ accident.
f insured is not sole owner, the nature of his / their
interest in the property and details of other interests
pw Whether Loss intimated to
^t -rft Police. ?rs u>t "tft "Rft
Fire Brigade,
Br,
O
Coed

9. (i) " !m in! ^rrft
Was any claim reported in the past on the same
property during current policy period
<nit L /ire Insurance , II
(ii) T&, |jf, flf Pf'ftf^KT f^ws '^fvflj Sf so, givfe detstis-reg :
f $) WT (a) Cause ('<s) "cre^T 3>) Wffte (b) Date
of incident (T) 3W[ a>, (c) Claim Number
(d) Policy ssuing Office
;e) Amount of claim paid/ Outstanding Rs,
hereby declare that the particulars furnished above are true correct to the best Of my knowledge.
PUCE :
-DATE :-
wm m.\ a>.
Fire claim No,
Si3#*+!re of I#"!re'
/ To be filled in by Dev, Officer / BrJ D.O.
fil.tf)!./
B.-anch
D.O. Code
No.
JP. R.O.
Code No.
f%<?n*B
^rf ^r^r^t
Dev.
Officer's
Code No.
Agency
Code No.
'
Premium Payment Particulars
^. vT. ~f ^ .
Receipt No. BG/CD
No,
Date of
Payment
Amount Rs.
+.1 INTRODUCTION
(arine insurance" the oldest branch o! insurance" comprises o! 9a: caro insurance and
9b: %ull insurance.
(arine insurance co$ers caro #hen it is in transit not only o$er the sea but also #hen in
transit by air" o$er land" inland #ater#ays" coastal seas and also #hen bein sent by post
9reistered or other#ise: etc. In short anythin in transit under a contract o! a!!reihtment
can be co$ered under a marine policy.
The purpose o! marine caro insurance is to indemni!y losses li0e@
293)Durin sea transportation the oods may be lost due to sin0in o! the $essel.
294)Damaed due to incursion o! sea,#ater into the holds o! the ship durin hea$y #eather.
295)Durin land transit the oods may be lost or damaed by the derailment o! rail#ay
#aons or collision o! motor oods $ehicle.
296)Durin transit and #hilst in storae incidental to transit the oods may catch !ire or
may be stolen.
%ull insurance on the other hand" concerns the insurance o! ships 9hull" machinery etc.:>
6.1 "RIEF %ISTORY ________________________________________
The early history o! marine insurance is closely lin0ed up #ith the oriin and rise o! X?
co!!ee,house started by 3d#ard Lloyd around 1LN7" #here the practice o! indi$id
marine under#ritin started. (arine insurance has no# ro#n into a business o! D
proportions.
6.C 1%O EFFECTS T%E INSURANCE
2 contract o! sale in$ol$es mainly a seller and a buyer" apart !rom other associated ` li0e
carriers" ban0s" clearin aents" etc. The *uestion as to #ho is responsible !or e!!a
insurance on the oods" #hich are the sub?ect !or sale" depends on the terms o! theT
contract. The principal types o! sale contracts" in so !ar as marine insurance is din
concerned" are as !ollo#s@
Ty5e &4 c&ntract
a: /ree on +oard
9/.O.+. Contract:
Re5&niFility 4&r In!rance
The seller is responsible till the oods are placed on
board the steamer. The buyer is responsible the %e can
et the insurance done #here$er he li0es
Unit 6 (arine Insurance
hi /ree on Rail The pro$isions are the same as in 9a: abo$e. This is mainly
9/.O.R. Contract: rele$ant to internal transaction.
Cost and /reiht %ere also" the buyer<s responsibility normally attracts once
9C Y / Contract: the oods are placed on board. %e has to ta0e care o! the
insurance !rom that point on#ards.
d: Cost" Insurance Y In this case" the seller is responsible !or arranin the
/reiht 9C.I./. Contract: insurance. %e includes the premium chare as part o! the
cost o! oods in the in$oice.
65 SCO)E OF CO-ER

&r
i Ge
uaO . ust
ITCJAJKA**RIS0E
' /ire
Lihtnin
?. +rea0ae o! +ride 5 Collusion
#ith or by the $ehicle
O$erturnin o! carryin $ehicle.
L. Derailment or accident o! li0e o
the carryin.
$on deli$ery o! entire
onsinment or pac0ets
r
he!t" pil!erae" resh YBor rain
#ater damae.
> U. Damae by hoo0s" nails" oil"
<mid" acids Y other extraneous
JGstances.
ITC J"J K"ASIC CO-ERE
297) /ire
298) Lihtnin
299) +rea0ae o! +ride
300) Collusion #ith or by
the
$ehicle
301) O$erturnin o!
carryin
$ehicle.
302) Derailment or
accidents
o! li0e to the carryin
rail#ay #aonB$ehicle.
ITC < C<
303) /ire
304) Lihtnin
305) Rate@
57E o! the
<minimum< rates
applicable to
ITC + Co$er.
11 ic scope o! co$er a!!orded under di!!erent types o! policies is determined by the clauses
attached to them. Inland transit is o$erned by Institute Transit Clause 9I.T.C.: 2" + Y C.
In brie! they are as under @
CO-ERAGE OF IN*AND TRANSIT C*AUSE KITCE A6"6C:
E@C*USIONS:
306))ill!ul misconduct o! the Insured.
307)Ordinary Lea0aeBloss in #eiht or $olume" #are Y tear.
308)Improper Pac0in.
309)Delay.
310)Inherent B or nature o! sub?ect matter.
311) )ar and allied perils
312)Riot stri0e and allied labour disturbances
ImportB3xport co$ers are o$erned by Institute Caro Clauses 92:" 9+: and 9C:. )e
shall no# see scope o! co$er under these clauses.
CO-ERAGE UNDER INSTITUTE CARGO C*AUSES KAE K"E P KCE
Loss or damae reasonably attributable to@
313)/ire or explosion
314);essel or cra!t bein stranded" rounded" sun0 or capsi&ed.
315)O$erturnin or derailment o! land con$eyance.
316)Collision or contact o! $essel" cra!t or con$eyance #ith any external ob?ect
other
than #ater.
317)Dischare o! caro at a port o! distress.
318)8eneral a$erae sacri!ice.
319)Aettison
320)3arth*ua0e Y $olcanic eruption.
321))ashin o$erboard.
322)3ntry o! sea" la0e or ri$er #ater into $essel" cra!t" hold" con$eyance" container
li!t$an
or place o! storae.
323)Total loss o! any pac0ae lost o$erboard or dropped #hilst loadin on to" or
unloadin
!rom" $essel or cra!t.
t
(arine Insurance
Note @ ICC JCJ c&ver only 1 to 6 co$ers.
ICC <+< only 1 to 11 co$ers.
C <2< sub?ect to the exclusions" ICC92: co$ers all ris0s o! loss or damae t& tGe
sub?ect 3atter in!re' !n'er tGe 5&licy.
@TRANEOUS )ERI*S :
he insurance system caters to occurrences #hich are o! an accidental nature and ine$itable
ents are not insurable. Insurance does not co$er any loss caused by #ear Y tear" inherent
ceo! the oods. Inherent $ice means tendency o! the commodity to deteriorate. /or e..
nits" $eetables etc. %o#e$er certain extra perils can be included sub?ect to payment o!
(itional premium. They are as i$en belo#"
The!t" pil!erae andBor non,deli$ery.
/resh #ater andBor rain #ater damae" @ %oo0
andBor oil damae. O %eatin and s#eatin. <
Damae by mud" acid and other substances.
+rea0ae. ea0ae or
contamination.
ountry Damae i.e. damae to the cotton shipments !rom #eather conditions and
xposure durin inland transit.
.." "ist is not exhausti$e and can ne$er be complete. Other extraneous perils such as
dentin" bendin" cuttin" scratchin" cha!in etc. can also be speci!ically included in the
Jilic.
@ In no case shall this insurance co$er@ Sss" damae or expenses
attributable to #il!ul misconduct o! the 2ssured.
srdinary lea0ae" ordinary loss in #eiht or $olume" or ordinary #ear and tear o! the
ob?ect,matter insured.
oss" damae or expense caused by insu!!iciency or unsuitability o! pac0in or
Greparation o! the sub?ect matter insured 9!or the purpose o! this Clause 5.C 4pac0in4
hall be deemed to include sto#ae in a container or li!t$an but only #hen such
sto#ae is carried out prior to attachment o! this insurance or by the 2ssured or their
ser$ants:.
324)loss" damae or expense caused by inherent $ice or nature o! , the sub?ect, matter
insured.
325)loss" damae or expenses proximately caused by delay" e$en thouh the delay be
caused by a ris0 insured aainst 9except expenses payable under Clause 1 abo$e:.
326)loss" damae or expense arisin !rom insol$ency or !inancial de!ault o! the o#ners
manaers charterers or operators o! the $essel.
327)deliberate damae to or deliberate destruction o! the sub?ect,matter insured or any
part thereo! by the #ron!ul act o! any person or persons.
9This is 0no#n as malicious damae. It can be co$ered at extra premium under
clause 9+: Y 9C:. Under clause 92: the ris0 is automatically co$ered.:
328))ar and allied perils.
329)Riot stri0e Y ci$il commission.lied perils.
17. +oth 9N: Y 9P: can be co$ered at extra premium.
DURATION OF CO-ER:
This insurance attaches !rom the time the oods lea$e the #arehouse or place o! storae at .
the place named herein !or the commencement o! the transit" continues durin the ordinary
course o! transit and terminates either@
330)on deli$ery to the Consinees or other !inal #arehouse or place o! storae ai >.'\
destination named herein.
331)on deli$ery to any other #arehouse or place or storae" #hether prior to or al K:
destination named herein" #hich the 2ssured elect to use either.
332)!or storae other than in the ordinary course o! transit or
333)!or allocation or distribution" or
K on the expiry o! L7 days a!ter completion o! dischare o$erside o! the oods hereby
insured !rom the o$ersea $essel at the !inal port o! dischare" #hiche$er shall !irst>
occur.
Unii 6 (arine Insurance
L. i!" a!ter dischare o$erside !rom the o$ersea $essel at the !inal port o! dischare"
but prior to termination o! this insurance" the oods are to be !or#arded to a
destination other than that to #hich they are insured hereunder" this insurance"
#hilst remainin sub?ect to termination as pro$ided !or abo$e" shall not
extend beyond the commencement o! transit to such other destination.
this insurance shall remain in !orce 9sub?ect to termination as pro$ided !or abo$e
and to the pro$isions o! Clause P belo#: durin delay beyond the control o! the
2ssured" any de$iation" !orced dischare" reshipment or transshipment and durin
any $ariation o! the ad$enture arisin !rom the exercise o! a liberty ranted to
shipo#ners or charter under the contract o! a!!reihtment.
N. In respect o! transits by rail only or by rail and road" until expiry o! 6 days a!ter
the arri$al o! rail#ay #aon at !inal destination station or in respect o! transits
by road only" until expiry o! 6 days a!ter arri$al o! $ehicle at the destination
to#n" #hiche$er shall !irst occur.
N&te@ /or co$erin oods sent throuh courier !ollo#in conditions to be
!ul!illed.
1" Courier should ha$e pro!essional leal liability 9public liability: policy.
1. The caro o#ner should not ma0e any contract #ith courier
restrictinBreducinB
limitin their liability.
i. Carrier Numbered Receipt to be issued i$in !ull details li0e
L.R. Despatch by CourierBO#ner<s $ehicle , 8o<s Liability 6KE
6.K TY)ES OF )O*ICIES___________________________________________
Open Policy
F .pecial Declaration
Policy Q Open Co$er
M Duty and Increased ;alue Policy
Onen )&licy
i nsureds ha$e !re*uent lare number o! despatches" or incomin materials
despatches" srnes incon$enient to o !or separate indi$idual policies !or each
despatches. /or iients marine open policy is $ery con$enient document.
1$.
It is customary to issue an open policy !or insurance o! 8oods despatched #ithin the
country by RailBRoadB2ir /reiht" Reistered Post.
)ERIOD :1 YEAR
SUM INSURED :
.um Insured should not less than $alue o! despatches anticipated in one month estimated
despatches" !ull premium o! this sum insured #ill be paid in ad$ance and #hen sum insured
is nearly exhausted same can be insured !urther by additional premium.
DEC*ARATION:
3ach and e$ery despatch comin under scope o! open policy send to Company" daily"
#ee0ly" as per prescribed !orm. T
*IMIT )ER CONSIGNMENT :
Insured should be $ery care!ul in selectin limit as per consinment o$er policy" but in any
case $alue o! consinment exceeds the limit" Insured should promptly in!ormed.
"ASIS OF -A*UATION:
In$oice cost o! oods" tax" !reiht and insurance premium plus 17E Incidental Chares"<
2t the end o! policy year premium undeclared balance o! sum insured #ill be re!unded to ?
the insured.
<
*OADING:
The existin rates o! Open Policies thouh lo#er than the <minimum rates< shall be allo " to
continue" sub?ect to the a$erae claims ratio !or the precedin three years" excludinO
expirin Policy Iear !or lesser period !or #hich the Policy has been in operation not exceec9
L7E" )here the a$erae loss ratio exceeds L7E the specially reduced rates shall c to
continue and the ratin shall be sub?ect to the 4minimum rates4 stated abo$e.
DISCOUNTS:
.uitable discounts may be ranted at the discretion o! the under#ritin o!!ices in i
Open Policies under #hich the a$erae claim ratio !or the precedin three years" exdi#"
the expirin Policy Iear or !or lesser period !or #hich the Policy has been in operati
does not exceed L7E 9sixty per cent:. %o#e$er" the net discounted rates shall not be less
than L7E o! the 4minimum rates4 i$en in the annexed schedule.
Dd$antaes o! open policy compared to speci!ic policies are
under@ W 2utomatic and continuous insurance protection. :
Clerical labour is considerably reduced.
t .ome sa$in in stamp duty. This may be substantial" particularly in the case o! inland
sendins.
%$ Activity A:
7 )hat are the ad$antaes o! an <open policy< or an <open co$er< to the insured'
.tate the di!!erence bet#een an open policyBopen co$er and a speci!ic $oyae policy.
.P3CI2L DEC*ARATION )O*ICY
2))*ICA"I*ITY:
2pplicable to inland Transit o$erned by Inland Transit RailBRoad 8uidelines" !urther this
#as extended to co$er inland" #ater Transits. This #ill be as per the rules" reulations"
terms" conditions and rates o! the respecti$e tari!!s. Thus the rate !or a Land cum #ater
Transit #ill be the total o! the rates applicable !or the T#o transits as per respecti$e tari!!s.
(inimum .um Insured@ 1 Crores <4 4Tiumpremium@
Rs.K777B, 9/i$e Thousands only:
J nit 6 (arine Insurance
does not exceed L7E 9sixty per cent:. %o#e$er" the net discounted rates shall not be less
than L7E o! the 4minimum rates4 i$en in the annexed schedule.
Dd$antaes o! open policy compared to speci!ic policies are under@
,2utomatic and continuous insurance protection.
< Clerical labour is considerably reduced.
: .ome sa$in in stamp duty. This may be substantial" particularly in the case o! inland
sendins.
^ Activity A:
I )hat are the ad$antaes o! an <open policy< or an <open co$er< to the insured'
.tate the di!!erence bet#een an open policyBopen co$er and a speci!ic $oyae policy.

cd
the
lin
"@ ase
"xtoi
Sidin
at ion
.P3CI2L DEC*ARATION )O*ICY
A))*ICA"I*ITY:
2pplicable to inland Transit o$erned by Inland Transit RailBRoad 8uidelines" !urther this
#as extended to co$er inland" #ater Transits. This #ill be as per the rules" reulations"
terms" conditions and rates o! the respecti$e tari!!s. Thus the rate !or a Land cum #ater
Transit #ill be the total o! the rates applicable !or the T#o transits as per respecti$e tari!!s.
(inimum .um Insured@ 1 Crores
Dliminumpremium@ Rs.K777B, 9/i$e Thousands only:
TURNO-ER:
The turno$er means total Insured $alue o! the oods in Transit #hich includes all incomin
and outoin consinments" comprisin capital oods" ra# materials stores" !inished and
semi,!inished products" transit includin inter depot Trans!ers.
SUM INSURED :
.um insured shall be on the basis o! pre$ious year<s annual turno$er. In case o! !resh
proposals the .um insured shall represent a !air estimate o! annual despatches. One time
mid,term increase in the policy is allo#ed on payment o! premium. /urther it is also clari!ied
that second time mid,term is also allo#ed sub?ect to $eri!yin the reasons !or the need o!
the same a!ter RO<s appro$al.
1%O C2N TA0E T%IS )O*ICYQ
Policy can be ta0en by an indi$idual companyB!irm. Policy can not be insured in Aoint
names i.e. more than one company thouh under the control o! the same manaement or
o#ned by a holdin company. Policy cannot be issued to Transport OperatorsBContractors
Clearin" /or#ardin and Commission 2ents or /reiht !or#arders either in their o#n
name or ?ointly #ith o#ner o! the company.
"ASIS OF -A*UATION:
This may be as aree $alue but normally does not exceed 8I/ $alue plus 17E.
DURATION OF )O*ICY:
The policy shall be !or a period o! 11 months. I! sum insured under the policy exhausts
earlier e$en a!ter increasin the same t#ice durin the period o! 11 months as stated under
Item No.II" separate open policy shall ha$e to be issued !or the remainin part o! the 11
months o! (ea Turno$er Policy.
C%ANGE IN CO-ER:
Chane in perils co$ered under the policy is not permissible durin the currency o! the
policy.
DEC*ARATION UNDER )O*ICY:
Total $alue o! the oods despatched in !orm o! a certi!ied statement shall be declared at
periodical inter$als but at least one on completion o! each *uarter countin !rom date o!
'nil 7 (arine
Insurance

i Jncepti
on o!
the
policy.
Last
*uarter
declara
t
h
<
2
2
Tm
i
u
o
i
L
T
o
n
s

a
n
d
B
o
r

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t

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i
s

o
!

$
a
l
u
a
t
i
o
n

s
h
a
l
l
T
ed is
obli
ed to
decl
are
each
and
e$er
y
ship
ment
comi
n
#ithi
n the
scop
e o!
the
Ope
n
Co$
er.
Unin
tenti
onal
!ailu
re to
repo
rt
ship
ment
s
#ill
not
$oid
the
Ope
n
Co$
er
and
such shipment #ill be held co$ered. %o#e$er" should the assured #ill!ully !ail to report
shipments 9he may do so #hen shipments ha$e arri$ed sa!ely: the Open Co$er" at Company<s
option #ill become null and $oid as to all subse*uent shipments.
It is not enouh to state @ 4Rates as arraned4. 2 schedule o! rates must be attached
containin names o! commodities" type o! pac0in" terms and scope o! co$er and rate in
respect o! each.
It is not su!!icient to state in the Open Co$er 4$arious types o! oods4 eneral merchandise4.
It is important to be speci!ic and precise in the description o! the sub?ect matter insured"
!or example" textiles and readymade arments in cases" cotton in bales" tinned pro$isions
in cartons" rice in ne# sinle bas" etc. This" toether #ith the rate schedule #ould protect
us" inasmuch as the insured cannot include other interests #hich ha$e not been speci!ied at
the time o! issuin the Open Co$er. 2ny addition to the list o! commodities oriinally stated
in the Open co$er should be done only by endorsement also sho#in the rele$ant rates
and conditions o! co$er.
2s !ar as possible issue a speci!ic policy aainst each declaration to co$er the insured<s
export shipments" so that consinees at destination and our settin aents #ill ha$e a
complete policy document !or $eri!ication. Certi!icates o! insurance" may be issued to
co$er the insured<s import shipments as the terms o! co$er can al#ays be $eri!ied !rom the
open co$er" a copy o! #hich is #ith the insured and the policy issuin o!!ice.
Ocean transits are sub?ect to Institute Classi!ication Clause 91,N,P6: in order to ensure
that the carryin $essel is o! the desired class or standard.
(inimum premium on any one Certi!icate issued under an Open Co$er is Rs.17B,.
DUTY AND INCREASED -A*UE INSURANCE GENERA*
REGU*ATIONS
334)Co$er may be ranted only on oods imported to India. The insurance shall be
ranted only i! there exists insurance on 8I/ $alue o! caro itsel! and aainst the same
ris0s as the basic caro insurance and only on the basis o! a sined proposal !orm. I!
>
caro is imported on 8I/ basis because o! an una$oidable contractual obliation to .
insure abroad" insurance on 4Increased $alue4 and 4Duty4 may be ranted on termS
and conditions #ider than o$erseas 8I/ insurance.
335)The insurance should be ranted only to the party in #hose !a$our the import license
has been issuedBo!!icially endorsed" hi respect o! imports by .tate Tradin Corporaiion
at o! India andBor any other o$ernment body under their o#n import licenses" and
2llotment is made to $arious parties on 4%ih .eas .ale +asis4. .uch allottees may
be considered as actual holders o! the license pro$ided an allotment letter or certi!icate
!rom ..T.C. o! India or o$ernment body concerned is produced as proo!.
9C: In all cases a duly completed and sined proposal !orm must be obtained in case
#here an Open Co$er is issued" a master proposal !orm may be obtained i! the !acts
mentioned therein applied e*ually to all declarations under the open co$er.
15: No insurance on 4Increased ;alue4 or 4Duty4 shall be ranted a!ter arri$al o! carryin
ship at destination port. This ho#e$er shall not apply #here such insurance ha$e
been ranted under open co$ers.
G: 4Increased ;alue4 and 4Duty4 Insurance Policies may also be issued in !a$our o!
42ctual Users4 #ho purchase !rom reconised 3xport %ouses under the 3xport
Promotion .cheme" pro$ided an allotment letterBcerti!icate !rom a reconised 3xport
%ouse is produced as proo!. 2lternati$ely" the Policy issued in !a$our o! the 3xport
%ouse !rom #hich the oods ha$e been purchased" may be assined in !a$our o!
42ctual Users4.
9L: The co$er is sub?ect to all extras 9on: account o! o$erae" under tonnae" non,
classi!ication" etc. applicable under the caro policy.
HDUTYH INSURANCE
The sum insured !or 4Duty4 is ad?usted on the basis o! actual assessed duty. The
Policy is one o! pure indemnity.
The rate o! premium shall be 6KE o! the rate applicable !or co$erin the CTA/ $alue o!
caro itsel!. 3xtra" as applicable" #ill also be chared on 6KE basis. )ar and .RCC
rates as applicable #ill also be on 6KE basis sub?ect to such rates not bein less than
the pre$ailin inland Transit ..R.C.C. rate #hich at present is 7.71E #here the C.I./
insurance is e!!ected #ith another insurer" the rate o! premium !or co$erin Duty shall
be 6KE o! the appropriate C.I./ $alue insurance premium rate o! the insurer co$erin
Duty.
Th
e
4Duty Policy excludes claims in respect o!
la: Total loss o! #hole or part o! caro prior to duty becomin payable.
9b: 8eneral 2$erae" .al$ae andBor .al$ae Chares arisin !rom any casualty
occurrin prior to duty becomin payable.
336)In ascertainin the amount o! claim reco$erable credit should be i$en !or any rebates
or re!und o! duty #hich may become allo#able.
337)The insurance is not assinable.
338)Claim under insured as0s are payable on the basis o! actual duty paid or on the basis
o! the sum insured" #hiche$er is less.
339)The assured should lode a claim #ith the Customs 2uthorities #ithin the stipulated
time 9L months !rom the date o! payment o! duty: !or re!und o! duty #here admissible
and #ith carriers or others as applicable and any re!und obtained should o to reduce
the claim under the policy.
9N: The Policy should be issued sub?ect to the tari!! 4Duty Insurance Clause4.
INCREASED -A*UE INSURANCE
340)The insurance is not !or an areed amount but !or an amount not exceedin the actual
di!!erence bet#een mar0et $alue at destination on the date o! arri$al o! the oods in
India and the total o! 8I/ $alue plus duty sub?ect to establishment o! a hiher mar0et
$alue or controlled price as noti!ied by appropriate statutory authority.
341)The assured is re*uired to bear 1KE o! the claim amount payable under this component
o! the Policy.
342)4Increased ;alue4 insurance shall not be ranted !or more than 177E o! the Clt
$alue o! caro except in exceptional circumstances.
343)The rate o! premium shall be 177E o! the normal rate applicable to 8I/ insurance.
344)The policy is not assinable.
345)This insurance shall not pay any part o! 8eneral 2$erae contribution or
sal$ae
chares arisin !rom any casualty #hatsoe$er.
346)4Lost or not lost4 pro$ision o! the standard policy shall not apply unless the
insurant
1
has been e!!ected in terms o! a standin Open Policy or Open Co$er.
(arine Insurance
?ates
d
5e
O
ual
."""
t
.Asin r
mar0et
!thtC.U,
or sal $ac>
347) The Policy should be issued sub?ect to the tari!! increased $alue Insurance
clause.4
348) No claim under <Increased ;alue< policy shall be paid until the claim under 8I/
$alue
insurance policy is payable but this pro$ision need not apply to cases #here 8I/
$alue is insured by o$erseas insurers.
JIncreae' -al!eJ In!rance &n car:& in Inlan' Tranit:
insurance on caro in inland transit 9#here not in con?unction #ith o$erseas transit: in
excess o! the established mar0et $alue or controlled price o! the commodity concerned
#hiche$er is lo#er shall not be ranted under any circumstances.
6.L IM)ORTANT C*AUSES
83N3R2L A-ERAGE C*AUSE@ This insurance co$ers eneral a$erae and sal$ae
chares" ad?usted or determined accordin to the contract o! a!!reihtment andBor the
o$ernin la# and practice" incurred to a$oid or in connection #ith the a$oidance o! loss
!rom any cause except those excluded in Clauses 5"K"L and 6 or else#here in this insurance.
H"OT% TO "*AME CO**ISIONH C*AUSE: This insurance is extended to indemni!y
the 2ssured aainst such proportion o! liability under the contract o! a!!reihtment 4+oth
to +lame to Collision4 Clause as is in respect o! a loss reco$erable hereunder. In the e$ent
1
any claim by ship o#ners under the said Clause the 2ssured aree to noti!y the
ider#riters #ho shall ha$e the riht" at their o#n cost and expense" to de!end and
isured aainst such claim.
NSEA1ORT%INESS AND UN/ITN3.. E@C*USION C*AUSE:
In no case shall this insurance co$er loss damae or expense arisin !rom
unsea#orthiness o! $essel or cra!t" un!itness o! $essel cra!t con$eyance container or
li!t$an !or the sa!e carriae o! the sub?ect,matter insured #here the 2ssured o! their
ser$ants are pri$y to such unsea#orthiness or un!itness" at the time the sub?ect,matter
insured is loaded therein.
The under#riters #ai$e any breach o! the implied #arranties o! sea#orthiness o! the
ship and !itness o! the ship to carry the sub?ect,matter insured to destination" unless
the 2ssured or their ser$ants are pri$y to such unsea#orthiness or un!itness.
1AR E@C*USION C*AUSE@ In no case shall this insurance co$er loss
damae or expense caused by
349)#ar ci$il" #ar re$olution" rebellion insurrection" or ci$il stri!e arisin there !rom
or any
hostile act by or aainst a bellierent po#er.
350)capture" sei&ure" arrest restraint or detainment" and the conse*uences thereo!
or any
attempt thereat.
351)derelict mines" torpedoes" bombs or other derelict #eapons o! #ar.
STRI0ES E@C*USION C*AUSE@ In no case shall this insurance co$er loss
damae or expense.
352)caused by stri0es" loc0ed,out" #or0men" or persons ta0in part in labour
disturbances"
riots or ci$il commotions.
353)resultin !rom stri0es" loc0,outs" labour disturbances" riots or ci$il
commotions.
C. caused by any terrorist or any person actin !rom a political
moti$e.
O)EN )O*ICY C*AUSE:
T%IS C*AUSE IS TO "E ATTAC%ED TO T%E )O*ICY DOCUMENT
IN ADDITION TO T%E STANDARD MARINE TRANSIT C*AUSE
J 2ll the dispatches !allin #ithin the scope o! the co$er must be declared to the
insurers"
2.

3$ery dispatch must be declared #ithin-------------
1K days !rom the date o! dispatch:in the prescribed !ormat.
AioursBdays 9maximum
The insurer reser$es the riht to inspect boo0s o! accounts o! the assured #ith re!erence T
to the dispatches and declarations co$ered under the policy. <
I! the sum insured ets exhausted by declarations made prior to expiry date o! the 0
policy" the policy ets terminated unless the sum insured is enhanced be!ore such M
exhaustion.
+asis o! $aluation
Unit 6 (arine
Insurance

Q
c
s"
The
$alu
e to
be
decla
red
!or
each
dispa
tch
#oul
d be
on
the
basis
o!
8I/
$alu
e ]
17E
J
Canc
e
T
!
11
mo
nth
s
by
a
not
ice
to
be
i$
en
in
#ri
tin
eith
er
by
the
ins
ure
d
or
the
ins
ure
r
!or
a
per
iod
o!
not
less
tha
n
C7
day
s.
T
E
R
M
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I
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!
the
oo
ds
her
eby
insu
red
at
suc
h
port
or
plac
e"
#hi
che
$er
shal
l
!irst
occ
ur.
I!
the
oo
ds
are
!or
#ar
ded
#it
hin
the
said
peri
od
o!
L7
day
s
9or
any
ar
eed
exte
n
s
i
o
n

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r
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o
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:
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o

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o
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n

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C
The Clause 11" #hich does not apply to eneral a$erae or sal$ae chares shall be
sub?ect to the exclusions contained in Clause 5"K"L and 6 abo$e" and shall not include
chares arisin !rom the !ault" nelience" insol$ency or !inancial de!ault o! the 2ssured or
their ser$ants.
CONSTRUCTI-E TOTA* *OSS C*AUSE@ No claim !or Constructi$e Total Loss
shall be reco$erable hereunder unless the sub?ect,matter insured is reasonably abandons
either on account o! its actual total loss appearin to the una$oidable or because the cost
o! reco$erin" reconditionin and !or#ardin sub?ect,matter to the destination to #hich it
is insured #ould exceed its $alue on arri$al.
INCREASED -A*UE C*AUSE:
1. I! any Increased ;alue insurance is e!!ected by the 2ssured on the caro insured
herein the areed $alue o! the caro shall be deemed to be increased to the total
amount insured under this insurance and all Increased ;alue insurance co$erin the
loss" and liability under this insurance shall be in such proportion as the sum insured
herein bears to such total amount insured.
In the e$ent o! claim the 2ssured shall pro$ide the Under#riters #ith e$idence o! the
amounts insured under all other insurances.
1. )here this insurance is on Increased ;alue the !ollo#in clause shall apply.
The areed $alue o! the caro shall be deemed to be e*ual to the total amount insured
under the primary insurance and all Increased ;alue insurance co$erin the loss and e!!ected
on the caro by the 2ssured and liability under this insurance shall be in such proportion as
the sum insured herein bears to such total amount insured.
In the e$ent o! claim the 2ssured shall pro$ide the Under#riters #ith e$idence o! the
amounts insured under all other insurance.
1AI-ER C*AUSE@ (easures ta0en by the 2ssured or the Under#riter #ith the ob?ect
o! sa$in" protectin or reco$erin the sub?ect,matter insured shall not be considered as a
#ai$er or acceptance o! abandonment or other#ise pre?udice the rihts o! either party.
A-OIDANCE OF DE*AY@ It is a condition o! this insurance that the 2ssured shall act
#ith reasonable despatch in all circumstances #ithin their control.
It
nit 6 (arine Insurance
RECOMMENDED C*AUSES :
J /oodstu!!" meat"!ish etc. ,4 #arranted excludin the ris0 o! re?ection by o$ernment
authorities at port o! destination.4
J 8rains" seeds etc. , )arranted excludin natural loss in #eiht andB or trade shortae.4
J +aed caro , 43xcludin the ris0 o! shortae !rom sound bas4
J /raile oods such as lass , 4#arranted excludin the ris0 o! loss or damae due to
chippin" dentin" scratchin4
J Cast iron pipes" asbestos sheets etc. , 4#arranted that the damaed portion be cut
o!! and balance utili&ed.4
J
!the
' ion
as
o!
the
6.6 A))*ICATION OF )RINCI)*ES TO MARINE
INSURANCE ____________________________________________________
Indemnity ,
Principle o! indemnity is applied in modi!ied !orm because marine
policies are 4areed alue< policies.
he indemnity pro$ided is 4in manner Y to the extent areed4. The basis
o! sum insured is I/. ]17E 9to co$er eneral o$erheads and a
marin o! pro!it:
4DUTI4 and 4INCR32.3D ;2LU34 policies are not areed
$alue policies. They pro$ide pure indemnity only.
tmost G&&' FaitG 6
his principle is applied strictly in marine insurance. It is the duty o! the
insured to disclose ill the material !acts li0e
i (ethod o! pac0in i.e. #hether in sinle unny bas or double
unny bas" #hether in ne# drums or second hand drums
@: Nature o! oods i.e. #hether the machinery is ne# or second
hand
O Details o! $essel carryin the oods etc.
: Destination
"
L
no.
and
truc
0
no.
!or
roa
d
tran
spo
rt
Dat
e o!
disp
atch
The material in!ormation enables the insurers to decide #hether to accept the proposal or
not. 2nd i! it is to be accepted then the rate o! premium and the terms" conditions and
#arranties o! acceptance shall be decided on the basis o! material in!ormation.
In!rance Interet 6
In marine caro insurance insurable interest is re*uired at the time o! loss. It may not be
present at the time o! e!!ectin insurance. 2n importer o! oods may insure the oods
under a marine policy" althouh at that time he may not be the o#ner o! the oods. 2lthouh
insurable interest is not re*uired at the time o! issue o! the policy" the importer must ha$e a
enuine expectation o! ac*uirin insurable interest. In marine hull insurance" insurable interest
must be present both at the time o! ta0in the policy and at the time o! loss.
Activity " :
a: Name the di!!erent principles o! insurance applicable to the contract o! insurance.
b: %o# is the principle o! indemnity and insurable interest applied di!!erently to marine
insurance'
(., 1RITING AND UNDER1RITING
In caro insurance" it is not the practice to use proposal !orms. Instead" a declaration !orm ""
has to be !illed up by the proposer.
The !orm elicits the !ollo#in in!ormation@
354) Name o! the shipper or consinor 9the insured:.
355) /ull description o! oods to be insured.
356) (ethod and type o! pac0in.
Unit 7 (arine
Insurance

!
357)
;oyae
and
mode o!
transit.
358)
Co$er
re*uired
.
359)
T
a
T
.
C
(
&
)
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at
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e
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e
ro
a
d
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th
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r
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le
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on
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he
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ry
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d
17
7
0
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o!
su
a
r
i!
th
es
e
ar
e
to
be
se
nt
by
tr
an
sit
in
a
tr
uc
0'
b: Note do#n the speci!ic #arranties you #ould impose #hile issuin the
policy" to restrict the liability o! the insurers !or each o! the abo$e caroes.
+.. CL2I(.
The marine perils discussed earlier i$e rise to di!!erent types o! losses. The liability
under the policy depends !irstly" on the loss bein caused by an insured peril" and
secondly" on bein proximately caused by such insured peril.
TOTAL LOSS CONSTRUCTI!E TOTAL LOSS"
8oods may be totally lost by the operation o! the marine peril. 2n actual total loss
ta0es place #here the sub?ect matter is entirely destroyed or damaed to such an
extent that it is no loner a thin o! the 0ind insured.
2s aainst actual total loss" a constructi$e total loss" #hich is a commercial total
loss" ta0es place #here the sub?ect matter insured is abandoned on account o! the
actual total loss bein ine$itable" or #here the expenditure to be incurred !or
repairs or reco$ery #ould exceed the $alue o! the sub?ect matter a!ter the
repairs or reco$ery.
)ARTICU*AR A-ERAGE
These are partial losses caused by marine perils. The particular a$erae losses
occur #hen there is a total loss o! part o! the oods co$ered." e.. 2 consinment
may consist oi< 177 pac0aes may be lost completely. 2nother #ay in #hich particular
a$erae loss occurs is #hen there is damae to the oods.
GENERA* A-ERAGE
8eneral 2$erae is a loss caused by a eneral a$erae act. 2n act is re!erred to as
enerni a$erae act #hen an extraordinary sacri!ice or expenditure is made. .uch an
act should iD $oluntary" and the expenditure reasonable.
b:
c)
Unit 7 (arine
Insurance

"
T
h
e

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l
l
o
#
i
n

ar
e
ex
a
m
pl
es
o!
a
e
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ral
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er
a
e
los
s @
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Ca
r
o
?et
tis
on
ed
in
an
e!!
ort
to
sa
$
e

t
h
e

$
e
s
s
e
l
.

b
:

T
u
s

e
m
p
l
o
y
e
d

t
o
to
#
the
$es
sel
to
sa!
ety
.
2s
me
nti
on
ed
ear
lier
"
e
ner
al
a$e
ra
e is
sha
red
pro
por
tio
nat
ely
by
all
the
int
ere
sts
at
ris
0
at
the
time
o!
the
ene
ral
a$era
e
act"
i.e.
.hip"
car
o and
!rei
ht.
Ther
e are
t#o
types
o!
losse
s
result
in
!rom
a
ene
ral
a$era
e
act@
sacri!
ice
and
expe
nditu
re.
Thes
e
losse
s are
paya
ble
unde
r the
mari
ne
po
lic
y
pr
o$
ide
d
an
ins
ur
ed
pe
ril
#a
s
the
ca
us
e
o!
the
e
ner
al
a$
era
e
act
.
SA
*-
A
GE
*O
SS:
$
.U
3
2N
D
*A
"O
UR
C
%
A
R
G
E
S
?, I! there
be
any
expe
nses
incu
rred
by
the
insu
red
or
his
aen
ts to
mini
mi&
e the
loss
or
dam
ae
paya
ble
unde
r the
polic
y"
the
sam
e are
reim
burs
ed
by
the
insur
ers.
3xa
mple
s
E@
TR
A
C%
AR
GES
.ur
$ey
!ees"
settl
in
ae
nts
!ees
etc.
are
0no
#n
as
extr
a
char
es.
The
y
are
pay
able
i!
the
clai
m is
adm
itted
.
)h
en
ther
e is
loss"
sur$
ey
!ees
is
paid
by
the
clai
ma
nt
initi
ally
and
the
Jam
e is
rei
mb
urse
d
#he
n
the
clai
m is
settl
ed.
I KR
2IMS
DOCU
MENT
S
.,
Jla?
or
clai
m
doc
um
ents
are
as
i$e
n
belo
#@
a i
P
o
l
i
t
l
e
a
n
d
a
l
s
o
s
e
r
$
e
s
a
s
a
n
e
$
i
d
e
n
c
e
i
!
s
u
b
?
e
c
t
m
a
t
t
e
r
b
e
i
.ill o!
ladin,
This
ser$es as
e$idence
that the
oods
#ere
actually
shipped.
i $oice,
2n
in$oice
e$idence
s terms
o! sale"
i$es
d
e
s
c
r
i
p
t
i
o
n

o
!
o
o
d
s
"
p
r
i
c
e

e
t
c
.
360) .ur$ey report, This report sho#s the cause and extent o! loss.
361) Debit note, This sho#s the amount claimed by the claimant.
362) Copy o! protest, (aster o! the $essel ma0es a protest to in!orm that he is not
responsible !or the loss as the loss is caused by perils o! the sea.
363) Letter o! subroation, This is leal document #hich trans!ers the rihts o! the claimant
aainst a third party to the insurers.
h: Copy o! the claim loded aainst the carriers i: Non
deli$ery certi!icate #hen the oods are not deli$ered. Activity D
:
a: .tudy a oods consinment note !rom the nearest transporter<s o!!ice. )rite do#n
all the details o! the oods appearin on the consinment note.
b: Note do#n the important in!ormation in the consinment note that #ill help in identi!yin
the oods i! damaed in transit
RECO-ERY FROM CARRIERS
In many marine claims there are possibilities o! reco$ery !rom the carriers i.e. road carriers.
rail#ays steamer companies" etc. 2!ter the payment o! the claim" insurers are subroated
to the rihts and remedies a$ailable to the insured aainst the carriers. Insured must there!ore
ta0e all precautions to sa!euard insurer<s riht o! reco$ery aainst the carriers. Insured
must !ile a claim and !ile a suit aainst the carriers #ithin the stipulated time period.
+.1/ SUMMARY
(arine insurance pro$ides !inancial protection aainst accidental and !ortuitous e$ents
#hich may cause loss or damae to oods in transit. Di!!erent perils to #hich the oods in
transit are exposed are !ire" explosion" lihtnin" collision or accident to the $ehicle etc.
There could be losses due to non,deli$ery o! the consinment. There are di!!erent policies
li0e speci!ic $oyae policy" open policy or open co$er to suit the re*uirements o! the
insured. B
;arious marine perils co$ered under the policy i$e rise to claims. Claims !orBloss or
damae proximately caused by the insured perils are payable. Insurers are liable to"
compensate !or total loss" constructi$e total loss" particular a$erae i.e. partial loss and
4neral a$erae loss arisin out o! eneral a$erae act. ;arious expenses are also payable
e" sal$ae loss" sue and labour chares and extra chares. 2!ter payment o! claim"
insurers are subroated to the rihts and remedies a$ailable to the insured aainst the
carriers.
+.11 0EY 1ORDS

Caro In!rance
Clause
Constructi$e T&tal
Loss
I Declaration
"ai
8eneral avera:e dn
marine in!ranceE
Type o! insurance that protects the shipperBo#ner o! the
oods aainst !inancial loss i! the oods are damaed or lost
#hile in transit in bet#een place o! commencement and
destination.
.entences and pararaphs describin co$erae<s" exclusions"
duties o! an insured" and termination o! co$erae" and other
such parts o! the insurance policy.
2 loss o! su!!icient amount to ma0e the cost o! sal$ain or
repairin the property e*ual to or reater than the $alue o!
the property #hen repaired.
2n arranement #hereby a pro$isional premium is paid and
subse*uently ad?usted by an additional or return premium on
receipt o! a declaration !rom the insured i$in details o! $alues
at ris0.
2 loss that must be borne partly by someone other than the
o#ner o! the oods that #ere lost or destroyed@ !or example"
i! it is necessary to ?ettison caro to sa$e a ship" the o#ners
i
InGerent -ice
<etti&n
*l&y'
Marine
Marine In!rance
O5en C&ver
)artic!lar Avera:e
Salva:e
o! the ship and the rest o! the caro that is sa$ed #ill share in
the loss o! the oods that #ere intentionally sacri!iced.
Nbuilt or inborn nature
2ct o! thro#in o$erboard part o! a $essel<s caro or hull in
hopes o! sa$in a ship !rom sin0in.
2 $oluntary unincorporated association o! indi$iduals orani&ed
!or the purpose o! #ritin insurance> normally re!ers to Lloyd<s
o! London" a roup o! indi$idual under#riters and syndicates
that under#rite insurance ris0s se$erally" usin !acilities
maintained by the Lloyd<s o! London Corporation.
Pertainin to the sea or to transportation@ usually di$ided as
to <ocean marine< and <inland marine<> the insurance co$erin
transportation ris0s.
2 !orm o! insurance primarily concerned #ith means o!
transportation and communication" and #ith oods in transit"
8i$es to insured automatic insurance protection so that there
is no ris0 o! any shipments remainin uninsured throuh
o$ersiht.
2 term meanin an accidental and usually a partial loss su!!ered
by one interest and not chareable aainst others.
Reco$ery made by an insurance company by the sale o!
property #hich has been ta0en o$er !rom that insured as a
part o! loss settlement. The remains o! damaed $ehicle or
any other property.
(.18 SE*F6ASSESSMENT 7UESTIONS
H1. 3numerate the ris0s co$ered under Inland Transit Co$er +. %o# it di!!ers !rom
2YC.
H1. (a0e a comparati$e study o! Institute Caro clauses in a tabular !orm.
HC. )hat are the extraneous perils #hich can be co$ered sub?ect to additional premium"
O
hull in
B!id
d<s
ales
aci%ties
J$ided as
means ot
ansit.
" that there d
throuh
u!tered
di!!ers
oal
premium.
H5. )hat are the di!!erent documents re*uired !or settlement o! a marine claim' .tate in
brie! the importance o! each document'
HK. )hat are the di!!erent expenses payable under the marine policy in addition to the
total loss" constructi$e total loss or particular a$erae claim'
HL. 3xplain the !ull !orm o!@
364) +.O.L.
365) L.O.C
366) /.O.+.
367) /.O.R.
368) 82.
369) T.P.N.D.
370) C.I./.
371) +.O.3.
372) I
.C.C.
$
373) CY/
11. ..R.C.C.
374) ..D. P.
375) C.T.L.
H6. .tate True or /alse@
376) (arine Caro Policies are areed $alued policies.
377) Inland Transit 4+4 is the #idest co$er.
378) (arine business in India is o$erned by a tari!!.
379) (arine certi!icates are stamped document.
380) Proposal !orm is must in marine insurance.
381) In (arine caro policies insurance interest must exit at the time o!
ta0in
insuran+ill o! ladin pro$ides e$idence that the oods are actually shipped.
382) .peci!ic $oyae policy pro$ides automatic and continuous protection.
h: Clerical labour is considerably reduced by issuin an open policy" i:
2dditional premium is chared to co$er extraneous perils. N. /ill in the
blan0s@
383)(inimum Retention o! premium in .DP is-----------------
384)(arine insurance is di$ided into ----------------
C. Duty co$ers cannot be i$en i! - . touches port.
5. (inimum ..I. re*uired !or .DP is.
385)Open co$er is issued !or a period o!--------------months.
386))ar Y .RCC premium is------E !or imports B exports.
387)In marine insurance stamp duty is reco$erable !rom the------------
388).ur$ey !ees or settlin aents !ees are 0no#n as----------chares.
389)Under C.I./. contract----------is responsible !or arranin the insurance"
17. The!t pil!erae and non,deli$ery is an- .peril.
N.1 INTRODUCTION
4(otor $ehicle< is de!ined in .ection 191N: o! the (otor $ehicle 2ct" 1PNN as a 4(echanically
propelled $ehicle adapted !or use upon roads4
+e!ore #e start let us loo0 some bac0round o! (otor Insurance. 2!ter )orld )ar I"
there #as a considerable increase in the number o! $ehicles on the road so also in road
accidents. (any pedestrians #ere 0illed or in?ured due to accidents #ith the motor $ehicles
and they could not et any compensation as the motorist #ere not insured and resources
#ere not a$ailable to pay compensation.
Jgî 2cti$ity 2>
.uppose you are speedin #hile on a lon dri$e and are in a cheer!ul mood. 2ll o! a
sudden you see a hoardin by police authorities" to a$oid accidents. )hat do you thin0 o!
in this situation'
N.1 (OTOR ;3%ICL3 2CT
In order to sa!euard the interests o! pedestrians" the (otor ;ehicle 2ct o! 1PCP introduced
Compulsory Third Party Insurance o! (otor ;ehicles. This is amended in 1PNN and 1PP5.
2ccordin to this act" the insurance o! (otor ;ehicles in a public place are o! !ollo#in
types ,
390)Third Party Liability , Compulsory.
391)O#n Damae 9to motor $ehicle: , Optional.
)ithout such insurance a motor $ehicle cannot ply in a public place.
2s per (.;. 2mendment 2ct" 1PP5" a $ehicle carryin danerous or ha&ardous oodi
shall also ha$e a insurance under Public Liability Insurance 2ct" 1PP1.
Unit N (otor Insurance
inically
i )ar I"
oad
$ehicle
s
,rces
t. ",al o! a in
thin0 o!
Jiroducee
" and
1PP5
!ollo#in
>
The liabilities #hich re*uire compulsory insurance are as under,

392) 2ny liability incurred by the insured due to death or bodily in?ury o! any
person
includin o#ner o! the oods or his authori&ed representati$e carried in the
carriae>
393) Liability incurred in respect o! damae to any property o! a third party>
394) Liability incurred in respect o! death or bodily in?ury o! any passener o! a
public
ser$ice $ehicles>
395) Liability arisin under )or0men<s Compensation 2ct" 1P1C in respect o!
death or
bodily in?ury o!@
9i: Paid dri$er o! the $ehicle.
9ii: Conductor" or tic0et examiner 9Public ser$ice $ehicles:
9iii: )or0ers" carried in a oods $ehicle.
The policy o! insurance should co$er the !ollo#in liability in any one accident
as
!ollo#s ,
$
9a: Third party death or bodily in?ury Unlimited Liability. 9h:
Third party property damae (aximum limit Rs. L777B,$
Activity "#
)rite do#n your $ie#s reardin compulsory third party insurance as per the
(otor
;ehicle 2ct.

dous ot 1C INDIA MOTOR TARIFF
or the transaction o! (otor business in India in accordance #ith the pro$isions o! art
II ,+ o! the Insurance 2ct 1PCN" the Tari!! 2d$isory Committee 9T.2.C.: ha$e laid do#n
detailed rules" reulations" rates" terms and conditions in a Tari!!.
The premium payable on a policy is re*uired to be calculated in accordance #ith the
premium computation tables appearin in the Tari!!. Rates pro$ided under this Tari!! are
minimum rates. Loadin on tari!! premium rates by 177E may be applied !or ad$erse
claims experience o! the $ehicle insured..
8enerally the rates are chared ta0in into consideration ,
396)Insured<s Declared ;alue 9ID;: $alue o! the $ehicle
397)Cubic Capacity
398)2e o! the $ehicle
399)8eoraphical Vones @ /or the purpose o! ratin the #hole India has been di$ided into
the !ollo#in &ones . Dependin on the location o! the o!!ice o! reistration o! the
$ehicle concerned" rates are chared.
TGere are tC& L&ne &4 &5erati&n.
S&ne A: 2hmedabad" +anlore" Chennai" %yderabad" =ol0ata" (umbai" Ne# Delhi
and Pune. Reion.
S&ne " @ Rest o! .India.
N&te: (umbai includes all area under (unicipal Corporation o! 8reater (umbai
Includin areas under City and Industrial De$elopment Corporation 9CIDCO:.
e: 8ross $ehicle #eiht i.e. Total #eiht o! the $ehicle in case o! commercial $ehicle.
Activity C :
(r. 2sho0 bouht a motor car in Pune" but is plyin the car in Dehradun. Does this a!!ect
the premium calculation' 2nd i! so" #hy'
Unit N (otor
Insurance

c 2d
diti
onal
pre
miu
m is
char
ed
!or
/or
all
$eh
icle
s
i:
)i
der
le
al
liab
ility
co$
e
i
P
\
ii:
"
D
i
D
i
i
i
&
(
d
a
ne
#
tru
c0
!r
o
m
a
(
u
m
ba
i
sh
o
#r
oo
m.
Li
st
!o
ur
po
int
s
on
#
hi
ch
th
e
pr
e
mi
u
m
is
cal
cul
ate
d.

+onus
B
(alus
it
there
is no
claim
durin
the
policy
perio
d" a
disco
unt is
allo#
ed at
the
time
o!
rene#
al and
!or
ad$er
se
claim
ratio
loadin
is
char
ed.
In the tari!! separate scales are chared !or pri$ate cars" taxis and other $ehicles.
No# #e #ill see some important pro$isions in the (otor ;ehicle 2ct.
Activity E :
(r. Patel has a !leet o! truc0s" insured #ith a insurance company and except !or one truc0"
#hich had had accidents at the rate o! !our times in a year" no claim #as reported !or the
other $ehicles. 8i$e your opinion reardin the loadin o! the premium" ta0in into
consideration the *uantum o! business placed by (r. Patel #ith the insurance company.
Certi4icate &4 In!rance
2s per the (otor ;ehicle 2ct" a certi!icate o! insurance alon #ith policy document in a
prescribed !orm has to be issued" other#ise the insurance has no e!!ect.
2s per the police authorities and R.T.O." existence o! a $alid insurance is a certi!icate o!
insurance issued by the insurers. The matter in this also di!!ers as per the type o! the $ehicle
insured.
Tran4er &4 Certi4icate &4 In!rance:
.ection 1K6 o! the ne# 2ct 91PNN: lays do#n that #hen the o#nership o! the $ehicle
trans!ers to ne# o#ner" then certi!icate and policy shall be automatically deemed to be
trans!erred in !a$or o! the ne# o#ner !rom the date o! trans!er o! o#nership o! the $ehicle"
2ccordin to .ection 1K6 91: it includes trans!er o! rihts and liabilities under the polic>
and certi!icate.
I! the certi!icate has been lost or destroyed" an a!!ida$it #ill ha$e to be made to that e!!ect"
E>e35ti&n
3xemptions in the pro$isions relatin to compulsory third party insurance are as !ollo#s
1: The $ehicle o#ned by the Central or .tate 8o$ernment
:\ a
nil N (otor Insurance
i Used !or 8o$ernment purposes unconnected #ith any commercial enterprises.
3xemptions may also be ranted !or any $ehicle o#ned by
400) The Central or .tate 8o$ernment i! the $ehicle is used !or 8o$ernment
purposes
connected #ith any enterprises.
401) 2ny local authority>
402) 2ny state Transport underta0in
%o#e$er the abo$e exemption is made only i! a !und is established and maintained by that
authority !or the payment o! liability arisin out o! the use o! the $ehicle. The !und has to be
established in accordance #ith the rules !ramed under the 2ct.
%$ Activity F:
2 military truc0 collided #ith a motor cycle and the motor cyclist expired on the spot.
2ccordin to your opinion" #ho should pay compensation' )hy'
N.5 C*ASSIFICATION OF -E%IC*ES
/or the purpose o! insurance" motor $ehicles are classi!ied into three broad cateories
accordin to use o! the $ehicles reistered in the reistration boo0.
Pri$ate cars t h: (otor cycles and
motor scooters
Commercial $ehicles" !urther classi!ied into
\\\ 8oods carryin $ehicles in: Passener
carryin $ehicles e.. (otori&ed ric0sha#s
Taxies
+uses
9iii: (iscellaneous ;ehicles" e..
%earses 2mbulances
Cinema /ilm Recordin and Publicity $ans
(obile dispensaries.
T#o types o! losses arise in respect o! motor $ehicles @
9 1 : Loss o! or damae to the $ehicle
91: Third party liability.
J$ 2cti$ity 8 @
)rite do#n t#o examples each o! di!!erent types o! $ehicles.
N.K POLICI CO;3R283
)e shall no# loo0 more closely at the di!!erent types o! policies. There are t#o types oi
policies,
403)Liability only policy.
404)Pac0ae policy.
Restrictin the scope o! co$er under .ection I 9loss o! or damae to the $ehicle insured:
o! the pac0ae policy #ithout any reduction in the Tari!! rates is permitted. 3xceptin this"
no alteration or extension o! any o! the Co$ers" Terms" Conditions" 3xclusions etc. o! any
o! the policiesBendorsements laid do#n in this tari!! is permitted #ithout prior appro$al o!
the Tari!! 2d$isory Committee.
Let us no# see in more detail about these policies ,
92: *iaFility Only )&licy Sc&5e &4 C&ver :
1. .ub?ect to the Limit o! liability as laid do#n in the schedule here to the company #ill
indemni!y the insured in the e$ent o! accident caused by or arisin out o! the use o!
the (otor ;ehicle any#here in India aainst all sums includin claimant<s costs and
expenses #hich the insured shall become leally liable to pay in respect o!
9i: Death o! or bodily in?ury to any person so !ar as it is necessary to meet the
re*uirements o! the (otor ;ehicles 2ct.
9ii: Damae to property other than property belonin to the insured or held in trust
or in the custody or control o! the insured up to the limit speci!ied in the schedule.
1. The Company #ill also pay all costs and expenses incurred #ith its #ritten consent.
I .ub?ect to the limitations o! the indemnity #hich is ranted by this policy to the insured"
the company #ill indemni!y any dri$er #ho is dri$in the (otor ;ehicle on the insured<s
order or #ith insured<s permission pro$ided that such dri$er shall be sub?ect to the
terms" exceptions and conditions o! this policy in so !ar as they apply.
5. In the e$ent o! the death o! any person entitle to indemnity under this policy" the
Company #ill in respect o! the liability incurred by such person indemni!y hisBher
personal representati$e sub?ect to the limitation o! this Policy pro$ided that such
personal representati$e shall as thouh such representati$e #as the insured obser$e"
!ul!ill and be sub?ect to the terms exceptions and conditions o! this policy in so !ar as
they apply.
i "E C&35!l&ry )er&nal Acci'ent C&ver 4&r OCner6Driver
M44 Compulsory personal accident co$er shall be applicable under both Liability only and
Gac0ae policies. The o#ner o! insured $ehicle holdin an e!!ecti$e dri$in license is termed
as O#ner Dri$er !or the purpose o! the section.
This co$er states that< sub?ect other#ise to the terms exceptions conditions and
limitations i! this Policy" the company underta0es to pay compensation as per the
!ollo#in scale !or bodily in?ury B death sustained by the o#ner,dri$er o! the $ehicle #hilst
dri$in the $ehicle includin mountin into B dismountin !rom or tra$elin in the insured
$ehicle as a co,dri$er"
caused by $iolent" accidental" external and $isible means #hich independently o! any other
cause shall #ithin six calendar months o! such in?ury results in
Scale &4 C&35enati&n
i: Death 177 E
ii: Loss o! t#o limbs or siht o! t#o eyes or 177 E
one limb and siht o! one eye.
iii: Loss o! one limb or siht o! one eye K7 E
i$: Permanent total disablement !rom in?uries 177E
other than named abo$e.
)r&vi'e' alCay tGat
405)the compensation shall be payable under only one o! the items 9i: to 9i$: abo$e in
respect o! the o#ner,dri$er arisin out o! the insurer shall not in areate exceed the
sum o! Rs.---------durin any one period o! insurance.
406)No compensation shall be payable in suspect o! death or bodily in?ury directly or
indirectly #holly or in part arisin or resultin !rom or traceable to
C: 9a: intentional sel! in?ury suicide or attempted suicide physical de!ect or de!ormity
or
5: 9b: an accident happenin #hilst such person is under the in!luence o! intoxicatin
li*uor or drus.
TGi c&ver i !FIect t& :
407)The o#ner,dri$er is the reistered o#ner o! the $ehicle insured herein>
408)The o#ner,dri$er is the insured named in this policy
409)The o#ner,dri$er holds an e!!ecti$e dri$in license" in accordance #ith the pro$isions
o! Rule C o! the Central (otor ;ehicles Rules 1PNP" at the time o! the accident.
The co$er under this section is limited to
Rs. 1"77"7776, /or (otori&ed T#o )heelers.
Rs. 1"77"7776, /or Pri$ate Cars and Commercial ;ehicles.
N.L )AC0AGE )O*ICY

in J>he
or
nity
din
The structure o! the policy !orm is the same !or all $ehicles" 9#ith some di!!erence #hich
are pointed out #here$er applicable:. Let us see in detail the pri$ate car pac0ae policy
#hich pro$ides the so,called4 comprehensi$e4 co$er and the structure o! the policy !orm
are the same !or all $ehicles" 9#ith some di!!erence #hich are pointed out #here$er
applicable:
J2E Secti&n I 6 HO1N DAMAGEH
The company #ill indemni!y the insured aainst loss or damae to the $ehicle insured
hereunder and B or its accessories #hilst thereon
by !ire explosion ser! inition or lihtnin> ii
by burlary housebrea0in or the!t> in. by riot
and stri0e> i$. by earth*ua0e 9!ire and shoc0
damae:
by !lood" typhoon" hurricane" storm" tempest" inundation" cyclone" hailstorm" !rost>
i. by accidental external means>
ii. by malicious act>
i. by terrorist acti$ity>
\. #hilst in transit by road" rail" inland,#ater#ay" li!t" ele$ator or air>
D. by landslide" roc0slide
.ub?ect to deduction !or depreciation at the rates mentioned belo# in respect o! parts
replaced@
i. /or all rubber" nylon" plastic parts" tyres and tubes" batteris and air bas
K7E
1
/or !ibre lass components
.............K7E
I /or all parts made o! lass
..........Nil
5. Rate o! depreciation !ar all other parts includin #ooden parts #ill be as per the
!ollo#in schedules.
AGE OF -E%IC*E N OF DE)RECIATION
Not exceedin L months ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
3xceedin L months but not exceedin 1 year,,,,,,,,,,,,,,,,,,,
3xceedin 1 year but not exceedin 1 years,,,,,,,,,,,,,,,,,,,,,
3xceedin 1 years but not exceedin C years,,,,,,,,,,,,,,,,,,,,
3xceedin C years but not exceedin 5 years,,,,,,,,,,,,,,,,,,,,
3xceedin 5 years but not exceedin K years,,,,,,,,,,,,,,,,,,,,
3xceedin K years but not exceedin 17 years,,,,,,,,,,,,,,,,,,,
3xceedin 17 years ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
TGe c&35any Gall n&t Fe 3a9e any 5ay3ent in re5ect &4:
,aNil
, K E
,17 E
, 1KE
,1KE
,CKE
J57 E
K7E
410)Conse*uential loss" depreciation" #ear and tear" mechanical or electrical brea0do#n"
!ailures or brea0aes>
411) damaes to tyres and tubes unless the $ehicle is damaed at the same time in #hich "
case the liability o! the company shall be limited to K7E o! the cost o! replacement. >
2nd
9c: any accidental loss or damae su!!ered #hilst the insured or any person dri$in th"
$ehicle #ith the 0no#lede and consent o! the insured is under the in!luence o
intoxicatin li*uor or drus.
Notes @
412)In the motor cycle and commercial $ehicle policy there is an additional
exclusion @ Loss o! or damae to accessories by burlary" housebrea0in ortheli
unless the ;ehicles is stolen at the same time. k
413)In commercial $ehicle policy" there is a !urther exclusion @ Damae caused by
o$erloadin or strain o! the $ehicle.:
UnitO (otor
Insurance

> In the
e$ent
o! the
$ehicl
e
bein
disable
d by
reason
o! loss
or
dama
e
co$ere
d
under
this
policy
t
9
T
T
T
B
T
li
s
t
e
d
s
e
ll
i
n
p
r
i
c
e
o
!
t
h
e
b
r
a
n
d
a
n
d
m
o
d
e
l
a
s
t
h
e
$
e
h
i
c
l
e
i
n
d
T
ae
#ise
depre
ciatio
n as
sho#
n
belo
# is
appli
cable
!or
the
purpo
se o!
Total
Loss B
Const
ructi$
e
Total
Loss
claim
s
only.

J
Pl
F
s
c
h
e
d
u
l
e
o
!
d
e
p
r
e
c
i
a
ti
o
n
!
o
r
!i
x
i
n
o
!
I
D
;

o
!
t
h
2
N
e
d
i
n

1

y
e
a
r
s
b
ut
n
ot
e
x
c
e
e
di
n

C
y
e
ar
s.
o! depreciation !or !ixin o! ID;.
KE
1KE
17E
C7E
3xceedin C years but not exceedin 5 years. 57E
3xceedin 5 years but not exceedin K years. K7E
ID; o! the $ehicles beyond K years o! ae and o! absolute models o! the $ehicles is to be
determined on the basis o! understandin bet#een the insurer and the insured.
ID; shall be treated as the 4(ar0et ;alue4 throuhout the policy period #ithout any
!urther depreciation !or the purpose o! Total Loss and Constructi$e Total Loss claims.
K"E Secti&n II *iaFility t& tGir' 5arty
2s per the co$er described abo$e in the Liability policy only.
KCE Secti&n III )er&nal acci'ent c&ver 4&r &Cner 'river
The clause is the same in Liability policy only.
JS Activity %:
)hat are the co$ers a$ailable in personal accident insurance !or the o#ner o! the car'
,.+ GENERA* E@CE)TIONS
92pplicable to all sections o! the policy:
The Company shall not be liable under this policy in respect o!@
i: any accidental loss or damae and B or liability caused" sustained or incurred outside
the eoraphical limit.
i: any claim arisin out o! any contractual liability
iii: i! the $ehicle is bein used other#ise than in accordance #ith the limitations as to use.
i$: bein dri$en by a person #ho does not hold a $alid motor dri$in license to dri$e the
insured $ehicle.
$:
loss
or
dama
e
due
to
nucle
ar
ris0s
$i:
loss
or
dama
e
due
to
#ar"
or
#arli
0e
opera
tions
G2ct
i $i t y
I>
2
Tata
.umo
"
purch
ased
by
(r.
Patil
!or
his
pri$at
e use"
met
#ith
an
accid
ent.
In the
en*uiry" it
#as
re$ealed
that it had
been
carryin
passeners
at the time
o! the
accident.
)rite
do#n your
$ie#s
reardin
the liability
o! the
insurance
company.

t D
e
d
u
c
t
T
nd
e$er
y
clai
m
und
er
.ect
ion
I
i#n
dam
ae:
.
/or
exa
mpl
es
are@
(oto
ri&ed
T#o
)he
elers,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Rs.
K76,
tire
e
#he
eler
s
incl
udi
n
pri$
ate
cars
9No
t
e
P
C
C
T
n
u
r
e
d
"
t
h
i
s
p
o
l
i
c
y

#
i
l
l
n
o
t
i
m
m
e
d
i
a
t
e
l
y

l
a
p
s
b
u
t
#
i
l
l
m
a
n
P
(
)here such leal heir9s: desire9s: to apply !or trans!er o! this policy or obtain a ne# !or
the $ehicle such heir9s: should ma0e an application to the company accordinly #ithin the
a!oresaid period. 2ll such applications should be accompanied by @,
414)Death Certi!icate in respect o! the insured
415)Proo! o! title to the $ehicle
416)Oriinal Policy 9This condition appears in Pac0ae Policies also:
Tari44 r!le
417)It is not allo#ed to issue a $alued policy to any $ehicle other than 4$intae car4.
418)It pro$ides procedure to issue a duplicate certi!icate i! the oriinal one is torn" lost or
de!aced etc.
419)Co$er note is issued #hen !ull details reardin $ehicles are not a$ailable and its
$alidity is only 1K days and can de extended !or 1 months
420)Policies are issued I the name o! the reistered o#ner" in case o! hore purchase
areement" the policy is issued in the name o! hirer and separate endorsement is
attached to protect o#ner<s interest.
421))hen the $ehicle is laid up in the arae and not in use" then tari!! pro$ides concessions
li0e the return o! premium and restricted co$er.
,., NO C*AIMS "ONUS ____________________________________________
I! claim is not reported durin the period o! the policy" No,claim +onus 9NC+: can be
earned only in the o#n damae section o! policies co$erin all classes o! $ehicles excepta
!e# li0e the (otor Trade Policies.
No,claim +onus is !rom 17E" #ith a maximum o! K7E. N.C. +. #hich can be allo#ed up
to P7 days !rom date o! the policy expiry.
,.. C*AIMS
Let us no# loo0 at the di!!erent types o! claims in (otor Insurance.
Claims under (otor policies can be o! three types namely. 91: O#n
Damae Claims
Unit N (otor
Insurance

>
i:
R
e
p
ai
r
ii
:
R
e
p
l
a
c
4
423
t
h
B
I
n
?
u
r
y
i
i
:

P
r
o
p
e
r
t
y

D
a
m
a
O
/
9
O
n

r
e
c
e
i
p
t
o
!

n
o
t
i
c
e

o
!

l
o
s
s
"
i
t
i
s

e
n
t
e
r
e
d

i
n

t
h
e
c
l
a
i
m

r
e
i
s
t
e
r
a
n
d

a
c
l
a
i
m

!
o
r
m

i
s
i
s
s
u
e
d

a
!
t
e
r

c
o
n
!
i
r
m
i
n

t
h
e

p
o
l
i
c
y

p
e
r
i
o
d

a
n
d

t
h
e

$
e
h
i
c
l
e

in$
ol$
ed
in
the
acci
den
t.
The
ins
ure
d is
re*
uire
d to
sub
mit
a
det
ail
esti
mat
e o!
rep
airs
alo
n
#it
h
dul
y
co
mpl
ete
d
clai
m
!or
m.

A
3
e
n
I
n
d
e
p
e
n
d
e
n
t
l
i
c
e
n
s
e
d

a
u
t
o
m
o
b
i
l
e

s
u
r
$
e
y
o
r
s

a
r
e

a
p
p
o
i
n
t
e
d

t
o

a
s
s
e
s
s
t
h
e

c
a
u
s
e

a
n
d

e
x
t
e
n
t
o
!
l
o
s
s
.
T
h
e
y

i
n
s
p
e
c
t

t
h
e

d
a
m
a
e
d

$
e
h
i
c
l
e

a
n
d

a
l
l
o
#

r
e
pair
er
to
rep
air
or
repl
ace
me
nt
o!
da
ma
ed
part
s
ta0i
n
into
con
side
rati
on
the
cost
and
da
ma
es
to
the
$eh
icle
and
sub
mit
thei
r
sur
$ey
rep
ort.
In respect o! minor claims" insurer<s o#n o!!icials or their automobile enineers inspect
the $ehicle and submit their report.
K3E Settle3ent
The sur$ey report is examined and settlement is e!!ected as per recommendations in
the report. 2 letter is issued to the repairer to repair the $ehicle and collect excess
amount i! any !rom the insured. The sal$ae o! damaed parts may be collected by
the insurer or the insured is #illin to retain the sal$ae" appropriate amount is deducted
!rom the claim bill.
On receipt o! !inal bill o! repairs and a satis!action note !rom the insured that the $ehicle is
repaired satis!actorily" the payment to the repairer is e!!ected. .ometimes insured directly
paid to repairer and he is reimbursed on submission o! receipted bills !rom the repairer.
Clai3 D&c!3ent
2part !rom claim !orm and sur$ey report the other documents re*uired !or processin the
claim are@
424) ;alid Dri$in License
425) Reistration Certi!icate +oo0
426) /itness Certi!icate 9commercial $ehicles:
427) Permit 9commercial $ehicles:
428) Police report
429) /inal +ill !rom repairers
430) .atis!action note !rom the insured
431) Receipted bill !rom the repairer" i! paid by insured.
In case o! commercial $ehicles" #hen meet #ith an accident" it is the usual practice !or
Insurers to arrane a 4.pot .ur$ey.4 This consists o! inspectin the $ehicle at the spot o!
the accident in <as is #here is< condition. It helps to establish the extent o! damae caused
by the accident so that it is not exaerated by the claimant a!ter the $ehicle reaches the
place o! repair.
!
Unit M&t&r
In!rance
&
2cti$ity
A>
(r.
+hide"
#ho held
a learnin
license"
met #ith
an
accident
#hile
dri$in a
car. It
#as
pro$ed
that he
#as #ith
his 11
year old
dauhter
at the
time o!
accident.
8i$e your
opinion
reardin
the
liability o!
the
insurance
company

.
<
.
b
9
+
:

T
o
t
a
l

l
o
s
s

c
l
a
i
m
s

@
D
s

d
e
!
i
n
e
d

i
n

t
h
e

(
o
t
o
r
T
i
1
t
Tc
h
l
u
nt
il
th
e
$e
hi
cl
e
is
tr
ac
ed
an
d
de
li
$e
re
d
to
its
o
#
ne
r.
I!
th
ey
ar
e
n
ot
?c
ce
e
d
in
re
c
o
$
er
in

th
e
The other documents are same as abo$e but i! R. C. and Taxation boo0s are stolen alon
#ith the $ehicle" then" the insured has to obtain a duplicate !rom R.T.O. and deposit to the
insurer.
The insured has to in!orm to R.T.O. reardin the!t o! $ehicle and !ilin a Non,User /orm
to a$oid payment o! tax. The R.C. +oo0" inition 0eys etc. are 0ept in the custody o! the
insurer so that it can be readily a$ailable i! the $ehicle is traced at a later date.
It is essential to in!orm to Reistration 2uthority by reistered 2BD reardin the!t o! the
$ehicle so that it pre$ent to trans!er the o#nership o! the $ehicle to anyone. This #ill
pre$ent the thie! !rom disposin o! the stolen $ehicle.
Activity 0 :
(r. 2run" #ho #as in a hurry" par0ed his car and #ent to purchase his rocery. 2!ter#ards"
he remembered that he !orotten to loc0 his car and !ound that the car had been stolen.
.tate the insurer<s liability.
,.1/ T%IRD )ARTY C*AIMS
91: .ub?ect to the limits o! liability as laid do#n in the schedule hereto the company #ill
indemni!y the insured in the e$ent o! an accident caused by or arisin out o! the use o!
the motor $ehicle any#here in India aainst all sums #hich the insured shall become
leally liable to pay in respect o!@
9i: Death o! or bodily in?ury to any person includin occupants carried in the $ehicle
9pro$ided such occupants are not carried !or hire or re#ard: but except so !ar
as it is necessary to meet the re*uirement o! (otor ;ehicle 2ct" the company
shall not be liable #here such death or in?ury arises out o! and in he course o! the
employment o! such person by the insured.
9ii: Damae to property other than property belonin to the insured or held in trust
or in the custody or control o! the insured..
Unit N (otor
Insurance

,
S
@
tru
st
432) T
he
company
#ill pay
all costs
and
expenses
incurred
#ith its
#ritten
consent.
433) T
he
com
p
2
C
+
<
9ii:
9iii:
I
2c
2
D
y
#as
con
side
red
177
E
loss
o!
earn
in
capa
city.
92:
M&
t&r
Acc
i'e
nt
Cla
i3
Tri
F!
nal
:
/or
the
spe
edy
dis
pos
al
o!
Thi
rd
par
ty
clai
ms
and
at a
mi
ni
mu
m
2ct 1PCP. Only a nominal !ee has to be paid !or institutin a case and court !ee is not
based on the $alue o! the suit. Thus it is $ery much less expensi$e and poor third party
claimants are not pre$ented !rom ma0in proper claims.
Under .ection 1LK o! ne# 2ct 91PNN: " the (otor 2ccident Claims Tribunal 9(2CT:
no# ha$e exclusi$e ?urisdiction to decide the claims #ith reard to death" personal in?ury"
as #ell as Damae to Third Party Property" irrespecti$e o! the amount in$ol$ed in the
property damae.
2cti$ity L @
)rite a !e# lines on the necessity o! (.2.C.T.
The procedure !or third party claims is brie!ly described as !ollo#s@
On receipt o! notice o! claim !rom the insured" or the third party or !rom the (2CT" a
letter is addressed to the insured to ascertain the !ollo#in in!ormation@
434)The claim number !or 4o#n damae4 i! loded.
435)The Police report #here the claim #as reported indicatin the number and date o!
their station diary.
436)Dri$er<s name and address.
437)Name and address o! the ad$ocate i! the insured has appointed one.
438)Number o! the policy under #hich the $ehicle is co$ered and the address o! o!!ice
#here co$ered.
439)Details o! dri$er<s prosecution" i! any" e.. Court 2ddress" copy o! chares sheet" etc.
440)Death certi!icate or coroner<s report in case o! death.
.imultaneously" a letter is addressed to the police station as0in !or copies o! police report or
panchnama and o! the statements made to them relatin to the accident.
2 copy o! the claim !orm is obtained !rom the insured.
The !ollo#in in!ormation is needed to determine the *uestion o! liability o! the insured and
the liability under the policy@
11: 3xistence o! insurance and limit o! liability under the policy.
91: Dri$er<s statement and statements o! #itness to the accident..
9C: Details o! dri$er<s prosecution" chares" depositions durin the proceedins.
15: Audment in the criminal case.
441) Details o! accident to decide nelience o! parties in$ol$ed !or decidin the aspect
o!
4Contributory Nelience4.
442) De!enses under .ection 15P917 o! (otor ;ehicles 2ct" 1PNN #hether a$ailable
or
not.
6: Post,mortem Report 9!atal claims:
" Z the case o! bodily in?ury" medical report is obtained indicatin the !ollo#in
n!ormation@
O: The ae o! the claimant and his eneral physical condition.
1} %is occupation.
>>
: The nature and extent o! in?uries.
1
: The estimated duration o! disability.
J: The extent to #hich the claimant #ill be disabled totally or partially !rom !ollo#in his
usual occupation or any other occupation.
% The extent o! permanent incapacity" i! any.
i The medical examiner<s eneral opinion.
may also be necessary to arrane independent medical examination.
order to consider the *uantum o! damaes that may be rearded as reasonable" the
!lo#in in!ormation is souht@
91: In !atal accident claims@
a. .tatus o! the deceased"
b. (onthly income"
c. Contribution to the !amily"
d. Relationship #ith the clamant"
e. .tatus o! the claimant.
91: In the e$ents o! claims !or in?ury@
a. (edical Certi!icate reardin in?ury su!!ered and extent o! disability arisin out
o! in?ury.
b. (edical expenditure in$ol$ed supported by $ouchers.
c. (onthly income to calculate loss o! income due to the in?ured ha$in been
con!ined to bed or hospital.
On the basis o! the abo$e in!ormation" the ad$ocate<s opinion is obtained. Lare claims
are !iled by the ad$ocate dependin upon the !acts o! case. In certain cases" it may be
desirable to ma0e a compromise settlement" particularly #hen the dri$er has been con$icted
or !acts indicate prima !acie case o! nelience.
The insured and B or the dri$er are re*uired to co,operate #ith the insurer<s ad$ocate.
3$entually" the claim is decided upon by the (2CT #here usually" the insurers" the insuredB
dri$er and the third parties alon #ith their ad$ocates are present. The amount a#arded is
paid to the third party aainst proper dischare.
,.11 COM)ROMISE SETT*EMENTS _______________________________
)here there is clear liability under the policy" claims are neotiated #ith the third party to
accept a compromise settlement" #hich i! accepted by the third party" is reistered #ith
the (2CT and its consent obtained. The che*ue is deposited #ith the (2CT and its
consent obtained. The che*ue is deposited #ith (2CT !or disbursement to the leal hire.
*&9A'alat
Pendin cases #ith the (2CT #here the liability under the policy is not in doubt are
placed be!ore the Lo0 2dalat or Lo0 Nyayalaya" !or a $oluntary and amicable settlement
bet#een the parties. 2 copy o! decision in the prescribed memo and the che*ues are
Uni9N (otor
Insurance
deposited
#ith (2CT.
Lo0 2dalat
sessions are
orani&ed
reularly in
liaison #ith
the Leal
2id +oard
o! each
.tate and
(2CT to
e!!ect
amicable
settlement
o! third
party claims.
N.11 NO
/2ULT
LI2+ILITI
The
Principle o!
4No /ault4
means the
claimant
need not
pro$e
nelience
on the part
o! the
motorist.
Liability is
automatic.
.ection 157
o! the (otor
;ehicle 2ct
1PNN"
pro$ides that
i! an
accident
arises out o!
the use
o!
motor
$ehicle
"the
o#ner
o! the
$ehicle
has to
pay
compe
nsation
to the
person
as
!ollo#s@
I
n

c
a
s
e

o
!

D
e
a
t
h

R
s
.

K
7
"
7
7
7
6
,
t
n
?
u
r
i
e
s
R
s
.

1
K
"
7
7
7
6
,
he amount
o!
compensa
tion
cannot be
reduced
on the
basis
o!
clai
mant<
s
share
o!
spons
ibiliry
!or
the
accid
ent.
The
leal
de!en
ce o!
4cont
ributo
ry
neli
ence
4 is
not
a$aila
ble
the
insur
ed or
insur
er.
On the
basis
o!
neli
ence
9!ault
liabilit
y:
under
section
15191:
i! (.
;.2ct"
claims
can be
pursued !or
death or
permanent
disability.
I! the
compensatio
n on /ault
liability is
less than the
No /ault
liability"
then the
insurer is not
i tied to
reco$er the
excess
amount paid
!rom the
insured
made under
no !ault
liability> i!
ass more"
then insurer
has to pay
the
di!!erence
bet#een
t#o
compensati
on.
These
claims
are
settled
by
depositi
n the
appropri
ate
amount
#ith the
(2CT
a!ter
linin the
!oll
o#i
n
doc
um
ents
@
D
e
a
t
h

c
e
r
t
i
!
i
c
a
t
e

(
e
d
i
c
a
l

c
e
r
t
i
!
i
c
a
t
e
.

P
o
l
i
c
e

r
e
p
o
r
t
.
I iicse
claims are
settled by
depositin
the
appropriat
e amount
#ith the
(2CT
a!ter
i=s
linin
death
certi!icate"
medi
cal
certi!
icate
and
polic
e
repor
t.
Activity M :
4The ob?ect behind the no !ault liability is to et minimum statutory relie!.4 3xplain.
,.13 H%IT AND RUNH ACCIDENTS
.ection 1L1 de!ines a 4hit and ran motor accident 4 as an accident arisin out o! the use o!
a motor $ehicle or motor $ehicles the identity #hereo! cannot be ascertained in spite o!
reasonable e!!orts !or the purpose.
This section pro$ides !or payment o! compensation 9solatium: as !ollo#s@
9i: In case o! death o! any person resultin !rom a hit and run motor accident a !ixed sum
o! Rs. 1K "7776,
9ii: In respect o! rie$ous hurt to any person resultin !rom a hit and ran motor accident"
a !ixed sum o! Rs. 11"K776,
Compensation 0no#n as .olatium is payable out o! a 4.olatium /und4 established by the
Central 8o$ernment 9#.e.! . 1 . 17. 1PN1: as per procedure prescribed in the 2ct.
JS$ Activity N :
4Ta0in into consideration proloned periods o! !allin interest rates" in!lationary trends
compensation throuh .olatium !und is insu!!icient and has to increase to cope up #ith
present situation.4 )rite do#n !i$e points on it.
Unit@ (otor
Insurance
,.1$ DE6
TARIFF
OF
MOTOR
INSURAN
CE
2s per
IRD2
4(otor
business #ill
be de,
tari!!ed !rom
1 st Aanuary
1776.4
Indian
economy
has been
ro#in and
in this #ell
de$eloped
and micro
economic
situation"
letari!!in
o! eneral
insurance is
a need o!
present
scenario.
(ost o! the
mar0ets
around the
#orld ha$e
no tari!!.
De,tari!!in
has i$en a
positi$e
result in the
countries
li0e Aapan"
8ermany
etc. .o in the
stron
econo
my"
insuran
ce
sector
hould
not be
obstruc
ted by
tari!!s
any
more.
This
#ill
brin
more
compet
ition in
both
ser$ice
and
price"
as the
insured
#ill et
compet
iti$e
price
and
better
ser$ice
#ith
reater
e!!icien
cy.
+asical
ly the
rates
#ill be
depend
s upon
(
an
a
em
ent
3xpense
s.
1:
Commi
ssion to
aents"
bro0era
e"
other
incident
al
chares
and
business
ac*uisiti
on cost.
11
Reser$es.
5> (arinal
pro!it.
Due to de
tari!!in
insurer #ill
impro$e in
the
!ollo#in
areas@
i:
Research
and de$elop
ne#
products
and
mar0etin
stratey.
ii:
Corporate
planni
n and
contro
l on
pricin
o!
the
policie
s.
3!
!e
cti
$e
an
d
e!!
ici
en
t
ser
$i
ce
to
cu
sto
m
er.
.tr
on

int
er
na
l
audit
and
control.
2nalysi
s o!
prices
on
actuaria
l basis.
.o to
de$elop
eneral
insurance
sector more
contributory
to country<s
industry"
trade and
commerce
#ith ne#
policies at a
competiti$e
rates de,
tari!! is
must !or
eneral
insurance
industry.
,.1; SUMMARY
In this unit #e introduced the need o! Compulsory (otor Insurance. The motor insurance
is a Tari!! business. )e ha$e also discussed di!!erent types o! $ehicles" policies" eneral
conditions" exceptions described in the Tari!!. There are di!!erent types o! claims in #hich
loss o! or damae to $ehicle as #ell as compensation to third party can be co$ered. /or
speedy disposal o! third party claims and at minimum cost" the claims tribunals ha$e been
constituted. The expeditious #or0 o! settlement in the Lo0 2dalat is o! ad$antae to
insurance companies. 2t the end #e ha$e discussed the concept o! .olatium /und #hich
is created !or payment o! compensation to %it and Run cases. 2s per IRD2 motor business
is de,tari!! !rom Aanuary 1776. To de$elop eneral insurance sector #ith better products"
reater e!!iciency and transparency" de,tari!!in is a must.
,.1( 0EY1ORDS

Certi4icate &4 In!rance
C&35!l&ry In!rance
C&ntr!ctive T&tal *&
De5reciati&n
E>ce Kal& re4er
De'!ctiFleE
FrancGie
%it an' R!n Acci'ent
2 document issued to a member o! a roup insurance plan"
describin the insurance bene!its and principal pro$isions
o! the policy in brie!.
2ny !orm o! insurance #hich is re*uired by la#. /or
example" (otor Third Party insurance" Public Liability 2ct
Insurance.
2 loss o! su!!icient amount to ma0e the cost o! sal$ain
or repairin the property e*ual to or reater than the $alue
o! the property #hen repaired.
2 decrease in the $alue o! property o$er a period o! time
due to #ear and tear or obsolescence. Depreciation is
used to determine the actual cash $alue o! property at
time o! loss.
2reed amount upto #hich no claim is paid under a policy.
Deductible in #hich the insurer has no liability i! the loss is
under a certain amount" but once this amount is exceeded>
the entire loss is paid in !ull.
2ccidental Death or in?ury arisin out o! the use o! a motor
$ehicle9s: the identity #hereo! cannot be ascertained inspite
o! reasonable e!!orts !or the purpose.
In'ia M&t&r Tari44
*iaFility Only )&licy
*&9A'alatM*&9
Nyayalaya
M&t&r Acci'ent Clai3
TriF!nal
M&t&r -eGicle Act
No Clai3 "&n!
N& Fa!lt *iaFility
OCn Da3a:e Clai3
Pac0ae )&licy .al$ae
!hett
TGir' )arty Gir'
)arty Clai3
The Tari!! 2d$isory Committee has laid do#n detailed rules"
reulations" rates terms and conditions in the Tari!!.
Compulsory third insurance.
2 concept !or $oluntary settlement o! disputes.
Decide the claims reardin death" in?ury and third party
property damae.
In India the (otor ;ehicle 2ct #as passed in 1PCP
introducin the la# relatin to compulsory third party
insurance.
2 reduction in the price o! an insurance policy because no
claims ha$e been made on it.
Liability is automatic. 2 type o! insurance mechanism
#hereby the riht to sue another party !or damaes caused
by nelience is limited and" in exchane" expanded !irst
party bene!its are o!!ered. (ainly used in ;ehicles
Insurance Policy.
Loss o! or damae to $ehicle is payable.
Optional co$ers.
Reco$ery made by an insurance company by the sale o!
property #hich has been ta0en o$er !rom that insured as
apart o! loss settlement. The remains o! damaed $ehicle
or any other property.
The unla#!ul ta0in o! property o! another@ the term
includes such crimes as burlary" larceny and robbery.
.omeone other than the insured and insurance company.
2 demand made by a person aainst a policyholder and
any payment that #ill be made by that company.
TGir' )arty *iaFility
T&tal *&
T&tal *& Clai3
Liability incurred by the insured to another party but
excludin contractual liability.
The complete loss or destruction o! all the property insured
under a particular policy.
)hen a $ehicle is beyond repair or not economical to
repair" claim is settled on Total loss basis.
)e ha$e i$en here a specimen o! !orm !or your ready re!erence.
443)Proposal !orm o! (otor car B T#o #heeler
444)Proposal !orm o! Commercial $ehicle
445)(otor claim !orm
446).ome important pro$isions reardin motor insurance.
,.1+ SE*F6ASSESSMENT 7UESTIONS _______________________________
H1. )hy" accordin to an 2ct" is Third Party Insurance compulsory '
H1. Clari!y $arious types o! $ehicles as laid do#n in (otor Tari!!. HC.
)hat are the policies a$ailable reardless o! the class o! $ehicles' H5.
Outline the procedure in$ol$ed in handlin third party claims. HK. /ill
in the blan0s@
447)---------------------------------(otor business is business.
448)-----------------------------------------No !ault liability !or death and !or
in?ury,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,.
449)-----------------------------------------------------------------------No claim
discount is $alid i! policy is rene#ed #ithin,,,,,,,,,,,,,,,,,,,,,,,,,,,,days.
450)----------------------------------------------------------Property damae !or
motor $ehicle is Rs.,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,.
451)-----------------------------------------------------------------(otor accident
claims tribunal is constituted !or,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,disposal o! third
party claims.
ANNE@UREI
D& P D&nJt
MOTOR INSURANCE
=indly o thouh the policy and ensure that you are ade*uately co$ered.
Please ma0e sure that rene#al o! the policy is a!!ected by payin the premium be!ore
the expiry date.
In case o! brea0 in the continuity o! insurance" please produce the $ehicle !or inspection.
Intimate our nearest o!!ice about accident immediately and obtain claim !orm.
In case o! accident to commercial $ehicles" arrane spot sur$ey thouh our nearest
o!!ice.
)here$er third parties are in$ol$ed in an accident" report to the nearest police station
and obtain a copy o! !irst in!ormation report and Panchanama and submit it to our
o!!ice !or claim processin.
Please do not admit any third party liability #ithout the #ritten consent o! the company.
.ubmit the Claim /orm" estimate o! repairs and policy copy to our o!!ice !or arranin
sur$ey.
Produce $ehicle documents and the dri$in licence in oriinal at the time o! sur$ey
#hile submittin the claim !orm to the o!!ice !or $eri!ication.
Please do not carry out repair #or0s be!ore the assessin o! the loss by the sur$eyor.
.ubmit the !inal bills o! repairs to our o!!ice.
=indly et the $ehicle re,inspected by the .ur$eyor a!ter repairs at the same arae.
Do not dri$e or allo# others to dri$e your $ehicle under the in!luence o! alcohol.
FORM No. - AC - 4,
Regional Office - Sharda Centre, 2nd Floor, Behind Nat Stop, Karve Road, Pune 411 004
PROPOSAL FORMS
PROPOSAL FORM FOR PRI5ATE CARS . MOTORISED TWO
WHEELERS PAC6AGE POLICY AND LIA7ILITY ONLY POLICY
(The queries made/details stated below are the minimum requirements to be furnished by a
proposer. The Insurer may Seek any other information as desired for underwriting purpose.)
Proposer's (Owner's) Full Name :
Address : Address where vehicle is normally kept and used :
Pin Code Tel. No.: Fax No.: E-Mail Address:
Occupation / Business:
Type of Cover required : Liability Only Policy / Package Policy / Others (specify)
Period of nsurance From---------:-------------------------------------------------------------To------------------------,--------------------
452) Registration No. and Date of Registration of the vehicle
453) Registering Authority & Location
454) Year Of Manufacture:
455) Engine No.:
456) Chasis No.:
457) Make of Vehicle :
458) Type of Body/Model:
459) Cubic Capacity:
Unit N (otor
Insurance
460) Seati
ng Capacity
ncluding
Driver :
461)
Wheth
e
r
t
h
e
V
e
hi
cl
e
is
d
ri
v
e
n
b
y
n
o
n
-
c
o
n
v
e
n
ti
o
n
al
Y
e
s
/
N
o
s
o
u
r
c
e

o
f

p
o
w
e
r
.
f
y
e
s
,
P
l
e
a
s
e

g
i
v
e

d
e
t
a
il
s
.
462)
Wheth
er the
vehicle
is
used
for
driving
tuitions
?
Yes/No
463)
Wheth
e
r
e
xt
e
n
si
o
n
o
f
g
e
o
g
r
a
p
hi
c
al
a
r
e
a
t
o
t
h
e
Y
e
s
/
N
o
f
ol
lo
w
in
g

c
o
u
n
t
r
i
e
s

r
e
q
u
i
r
e
d
?
B
a
n
g
l
a
d
e
s
h
,

B
h
u
t
a
n
,

M
a
l
d
i
v
e
s
,

N
e
p
a
l
.

P
a
k
i
s
t
a
n

a
n
d

S
r
i

L
a
n
k
a
.
f 'Yes'
state
the
name
of the
countri
es.
1)
2) 3)
464) Whet
her the use
of the
vehicle is
limited
to own
premis
es?
Yes /
No
465)
Wheth
er
vehicle
is
used
for
Comm
ercial
purpos
es ?
Yes /
No
466)
Wheth
er
vehicle
belong
s to
foreign
embas
sy /
consul
ate?
Yes / No
467)
Wheth
e
r
t
h
e
c
a
r
is
c
e
rt
ifi
e
d
a
s
V
in
t
a
g
e
c
a
r
b
y
V
in
t
a
g
e
a
n
d
Y
e
s
/
N
o
C
l
a
s
s
i
c

C
a
r

C
l
u
b

o
f

n
d
i
a

?
7.
Whet
her
Vehicl
e is
desig
ned
for
use
of
Blind
/
Handi
capp
ed/
m
e
n
t
a
ll
y
c
h
a
ll
e
nged
person
s and
duly
endors
ed as
such
by
RTA ?
Yes /
No
3.
Whether
vehicle is
fitted with
fibre glass
tank?
Yes / No
i.
D
o

y
o
u

w
i
s
h

t
o

o
p
t

f
o
r

h
i
g
h
e
r

d
e
d
u
c
t
i
b
l
e

o
v
e
r

a
n
d

a
b
o
v
e

t
h
e
c
o
m
p
u
l
s
o
r
y

d
e
d
u
c
t
i
b
l
e

(
R
s
.

5
0
A

f
o
r

T
w
o

W
h
e
e
l
e
r
s

a
n
d
R
s
.

5
0
0
1
-

R
s
.

1

,
O
O
O
A

f
o
r

P
r
i
v
a
t
e

C
a
r
s
)
Y
e
s

/

N
o
f
y
e
s
,
P
l
e
a
s
e
s
p
e
ci
f
y
t
h
e
a
m
o
u
n
t
(for
two
wheele
rs) Rs.
500 /
750 /
1,000 /
1,500 /
3,000
(for private cars) Rs. 2,500 /
5,000 / 7,500 / 15,000
20.
A
r
e

y
o
u

a

m
e
m
b
e
r

o
f

A
u
t
o
m
o
b
i
l
e
4
6
8
)
N
a
m
e
of
A
s
s
o
ci
at
io
n
:
4
6
9
)
M
e
m
b
e
rs
hi
p
No.
:
470
)
Dat
e of
Expi
ry :
es/N
o
471) Are you entitled to No Claim Bonus? Yes / No
f yes, Please submit proof thereof.
472) s the vehicle fitted with the any Anti-theft device approved
bytheAAR, Pune? Yes/ No
f yes, attach Certificate of nstallation in the vehicle issued by
Automobile Association of ndia.
23. Liability to Third Parties.
(The policy Proides Third Party Property !amage (TPP!) of "s.
# lakh (Two $heelers) and "s. %.& lakhs (Priate 'ars.)
Do you wish to restrict the above limits to the statutory TPPD Liability
limit or Rs. 6000/- only? Yes / No
24. Do you wish to cover Legal Liability to?
473) Driver____________________(No. of persons )
Yes / No
474) Other Employees___________(No. of persons )
Yes / No
475) Unnamed Passenger________(No. of persons )
Yes / No
25. Do you wish to include personal Accident (P.A.) Cover for
Named Persons ? Yes / No
f yes, give name and Capital Sum nsured (CS) opted for. The maximum CS available per
person is Rs. 1 Lakh in the *"e of Private Cars and Rs.1 lakhs in the case of Motorised two
wheelers
N*8e CSI O(+e' %R".)
-.
9.
3.
26. Do you wish to include P.A. Cover for
unnamed Persons / Hirer / Pillion Passengers (two wheelers)? Yes / No
f Yes, give the number of persons and Capital Sum nsured (CS) opted. The maximum CS
available per person is Rs. 2 Lakh in the case of Private Cars and Rs. 1 lakhs in the case of
Motorised two wheelers.
N!8&er of Per"o#" CSI o(+e' %R".)
27. nsured's Declared Value (Please ffll up the following table :)
nsured's Non-electrical Electrical & side Car (two Value of Total Value
Declared Value accessories electronic wheeler) Trailer CNG/LPG kit
of vehicle fitted to the accessories (Pvt. cars)
vehicle fitted to the
vehicle
Rs. Rs. Rs. Rs. Rs. Rs.
Note:
The nsured's Declared Value (DV) of the vehicle will be deemed to be the 'SUM NSURED' for the
purpose of this tariff and it will be fixed at the commencement of each policy period for each insured
vehicle.
The DV of the vehicle is to be fixed on the basis of manufacturers' listed selling price of the brand and
model as the vehicle proposed for insurance at the commencement of insurance / renewal, and adjusted
for depreciation (as per schedule specified below). The DV of the side carfc) and / or accessories, if
any, fitted to the vehicle but not included in the manufacturer's listed selling price of the vehicle is / are
also likewise to be fixed.
The schedule of age-wise depreciation as shown below is applicable for the purpose cf Total Loss /
Constructive Total Loss (TL/CTL) claims only. A vehicle will be considered to be a CTL where the
aggregate cost of retrieval and / or repair of the vehicle subject to terms and conditions of the policy
exceeds 75% of the DV.
SCHEDULE OF DEPRECIATION FOR ARRI5ING AT ID5
AGE OF THE VEHCLE % OF DEPRECATON
FOR FXNG DV
Not exceeding 6 months 5%
Exceeding 6 months but not exceeding 1 year 15%
Exceeding 1 year but/iot exceeding 2 years 20%
Exceeding 2 years but not exceeding 3 years 30%
t
40%
Note: DV of obsolete models of ve! licles (i.e. models which the manufacturers have discontinued
to manufacture) and vehicles beyond 5 years of age will be determined on the basis of an
understanding between the insurer and the insured.
9:. Pre;io!" Hi"+or$
a. Date of Purchase of the vehicle by the proposer
b. Whether the vehicle was New or Second Hand at the time of Purchase

c. Will the vehicle be used exclusively for
A. private, domestic, pleasure & professional purposes
B. carriage of goods other than samples or
personal luggage
d. s the vehicle in good condition?
f "No" Please give full details
e. Name and address of the previous insurer
(Yes / No)
(Yes / No)
(Yes / No)

f. Previous Policy Number

Period of nsurance from to
g. Type of cover Liability Only Cover / Package Cover / Others (specify)
h. Claims lodged during ' Year Number Amount
(Rs.;
h. Has any insurance company ever:
476) declined
the proposal (Yes / No)
477).............................................................................................c
ancelled & refused to renew fes / No)
(if yes, reasons there for)..............................................................
478).............................................................................................i
mposed special condition or excess (Yes /-No)
(if yes, reasons and details thereof)...............................................
UnitN M&t&r
In!rance

26.
Details
of Hire
Purcha
se /
Hypoth
ecatio
n /
Lease
a)
s

t
h
e

v
e
h
i
c
l
e

p
r
o
p
o
s
e
d

f
or
ins
ura
nc
e :
Un
der
Hir
e
Pu
rch
as
e
Under
Lease
Agreem
ent
Under
Hypothe
cation
Agreem
ent
b)
f
ye
s,
giv
e
na
me
an
d
add
res
s of
con
cer
ned
par
ties
:
es /
No)
(Yes /
No)
(Yes /
No)
30.
Details
of Driver
:
(
O
w
n
e
r

Dr
iv
er
Ot
he
rs
(b)
D
o
e
s

t
h
e

d
r
i
v
e
r

S
u
f
f
e
r

f
r
o
m

d
e
f
e
c
t
i
v
e

v
i
s
i
o
n

o
f
h
e
a
r
i
n
g

o
r

a
n
y

p
h
y
s
i
c
a
l

i
n
f
i
r
m
i
t
y
.
f
"Y
es
"
Pl
eas
e
giv
e
det
ails
.
(c)
H
a
s

t
h
e

d
r
i
v
e
r

e
v
e
r

b
e
e
n

i
n
v
o
l
v
e
d

/

c
o
n
v
i
c
t
e
d

f
o
r

c
a
u
s
i
n
g
a
n
y

a
c
c
i
d
e
n
t

o
r

l
o
s
s
?

f

y
e
s
,

p
l
e
a
s
e

g
i
v
e

d
e
t
a
i
l
s

a
s
u
n
d
e
r

i
n
c
l
u
d
i
n
g

t
h
e

p
e
n
d
i
n
g

p
r
o
s
e
c
u
t
i
o
n
,

i
f

a
n
y
:
-
Driver's Name
i
Any
other
releva
nt
inform
ation :
Del*r*+io# &$
I#"!re'
We
here
by
decla
re
that
the
state
ments
made by
me / us in
this
Proposal
Form are
true to the
best my /
our
knowledge
and belife
and / We
hereby
agree that
declaration
shall form
the basis
of the
ntract
between
me / us
and "THE
NEW
NDA
ASSURAN
CE
COMPANY
LMTED"
/ We also hereby declare that if any additions or alterations are carried out after the submission of this
proposal form then the same would be conveyed to the insurers immediately.
Place
Date Signature of Proposer
INSURANCE ACT -<=:. SECTION ,- - PROHI7ITION OF RE7ATES
479) No person shall allow or offer to allow, either directly or indirectly as an inducement to any
person to take out or renew or continue an insurance in respect of any kind or risk relating to
lives or property in ndia, any rebate of the whole or part of the commission payable or any
rebate of the premium shown on the policy, nor shall any person taking out or renewing or
continuing a policy accept any rebate except such rebate as may be allowed in accordance with
the prospectus or tables of the nsurer.
480) Any person making default in complying with the provisions of this section shall be punishable
with fine, which may extend to five hundred rupees.
ANNE@UREIII
FORM No. > AC - 4?
Regional Office : Shards Centre, 2nd Ftodr, Behind Nai Stop, Karve Road, Pune 411 004.
PROPOSAL FORM FOR COMMERCIAL
5EHICLES PAC6AGE POLICY AND LIA7ILITY ONLY
POLICY
(other than Motor Trade nternal Risks Policy)
(The queries made / details stated below are the minimum requirements to be furnished by a
proposer. The Insurer may seek any other information as desired for underwirting purpose.)
Proposer's (Owener's) Foil Name :
Address : Address where vechicle is normally kept and used :
Pin Code : Tel. No. : Fax No. : E-Mail A''re"" >
O!(*+io# / Business :
Type of Cover Required > Li*&ili+$ O#l$ Poli$ . P*@*3e Poli$ . O+her" %"(eif$) >
Perio' of insurance : From :___________________ To :________ ^ _ _ _ _ _ _ _ _ _ _ _
481) Re3i"+r*+io# No. *#' D*+e of Re3i"+r*+io# of +he 5ehile >
482) Re3i"+eri#3 A!+hori+$ & Lo*+io# >
483) Ye*r of M*#!f*+!re >
484) E#3i#e No. >
485) Ch*""i" No. >
486) M*@e of
5ehile >
%A T$(e of %*) 7o'$ >
(b) Model :
(8) Gross Vehicle Weight (GVW) / Cubic Capacity (C. C.)
i
487) Max. licensed Carrying Capacity (Mo. of Passengers)
n Case of Passenger Carrying Vehicles ?
488) Whether extension of geographical area
to the following countries required ?
Bangladesh, Bhutan, Maldives, Nepal,
Pakistan and Sri Lanka.
f 'Yes' state the name of the countries 1)
2) '
3)
(11) Whether the Vehicle is driven by non-conventional
source of power ?
f yes, Please give details.
489) Whether the Vehicle is used for driving tuitions ?
490) Whether the use of Vehicle is limited to own premises ?
491) Whether the Commercial Vehicle
is also used for Private purposes
(excluding use for hire or reward) ?
*.
492) Whether Vehicle belongs to foreign Embassy / Consulate ?
493) Whether Vehicle is designed for use of Blind /
Handicapped / Mentally challenged persons and
duly endorsed as such by KTA ?
494) Whether the Vehicle is fitted with fibre glass tank ?
495) Are you entited to No Claim Bouns ?
f yes, Please submit proof thereof.
496) s the vehicle fitted with the any Anti-theft
Device approved by the AAR, Pune ?
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
f yes, attach Certificate of nstallation in the vehicle issued by Automobile Associati
of ndia.
Unit. M&t&r
In!rance

(20)
Liability at
third
Parties
The
Policy
provid
es
Third
Party
Prope
rty
Dama
ge
(TPP
D) of
Rs. 1
Lakh
(Two
Whee
lers)
and
Rs.
7.5
Lakhs
(Othe
r
Class
of
Vehicl
es),
Do
you
wish
to
restric
t the
above
limits
to the
statut
ory
TPPD
Liabili
ty
limit
of Rs.
6,000
7-
only ?
.
(21) Do
you wish
to Cover
Legal
Liability to
?
49
7)
Driv
er /
Con
duct
or /
Cle
ane
r
(No.
of
Per
son
s
)
49
8)
Oth
er
Em
ploy
ees
(No.
of
Per
son
s
)
49
9)
Non
-
f
a
r
e
p
a
y
i
n
g
P
a
s
s
e
n
g
e
r
(
N
o
.
o
f
P
e
r
s
o
n
s
Yes / No
Yes / No
Yes / No
Yes / No
(22) Do you
wish to
include
Personal
Accident
(P. A-)
Cover for
paid
drivers
,
cleane
rs and
condu
ctors ?
*
Yes /
No
f yes,
give
name
and
Capit
al
Sum
nsure
d
(CS)
opted
for.
The
maxi
mum
CS
availa
ble
per
perso
n is
Rs. 1
Lakhs
in the
case
of
Motori
sed
two
wheel
ers
and
Rs. 2
Lakhs
for
o
t
h
e
r

C
l
a
s
s
e
s

o
f
V
e
h
i
c
l
e
s
.
N
a
m
e
C
S

O
(
+
e
'
(
R
s
.)
1
.
.
.

.
2
.
3
.
(23) Do you
wish to
include P.
A. Cover
for
Unnam
ed
Person
s /
Hirer /
Pillion
Passe
ngers
(two
wheele
rs) ?
Yes /
No
f
yes,
give
the
numb
er of
perso
ns
and
Capit
al
Sum
nsur
ed
(CS)
opted
The
maxi
mum
CS
avail
able
per
pers
on is
Rs. 1
Lakh
s in
the
case
of
Moto
r
i
s
e
d

t
w
o

w
h
e
e
l
e
r
s

a
n
d

R
s
.

2

L
a
k
h
s

f
o
r

o
t
h
e
r

C
l
a
s
s
es of
Vehic
les.
N
u
C
S
(24)
nsured's
Declared
Value
nsurfed's
Declared Value
of Vehicle
Non-electrial
accessories
fitted to the
Vehicle
Electrical &
electronic
accessories
fitted- to the
Side Car (two
wheeler) Trailer
(Pvt. Cars).
Value of CNG /
LPG kit
Total
Value
Vehicle
Rs." Rs. Rs. Rs. Rs. Rs.
The nsured's Declared Value (DV) of the vehicle will be deemed to be the 'SUM
NSURED* for the purpose of this tariff and it will be fixed at the commencement of each policy
period for each insured vehicle.
.
The DV of the vehicle is to be fixed on the basis of manufacturer's listed selling price of the
brand and model as the vehicle proposed for insurance at the commencement of insurance /
renewal, and adjusted for depreciation (as per schedule specified below). The DV of the skie
car<s) and / or accessories, if any, fitted to the vehicle but not included in the
manufacturer's listed selling price of the vehicle is / are also likewise to be fixed.
The schedule of age-wise depreciation as shown below is applicable for the purpose of Total
Loss / Constructive Total Loss (TL / CTL) claims only. A vehicle will be considered to be a CTL
where the aggregate cost of retrieval and / or repaid of the vehicle subject to terms and
conditions of the policy exceeds 75% of the DV.
SCHEDULE OF DEPRECIATION FOR ARRI5ING AT ID5
AGE OF THE VEHCLE % OF DEPRECATON
FOR FXNG DV
Not exceeding 6 months 5%
Exceeding 6 months but not exceeding 1 year 15%
Exceeding 1 year but not exceeding 2 years 20%
No+e : DV obsolete models of vehicles (i. e. models which the manufacturers have
discontinued to manufacture) and vehicles beyond 5 years of age will be determined on the
basis of and understanding between the insurer and the insured.
%94) Pre;io!" Hi"+or$ >
a. Date of Purchase of the vehicle by the proposer
b. Whether the vehicle was New or Second Hand at the time of Purchase
c. Is the vehicle in good condition ? f "No"
please give full details
" (Yes/No)

d. Name and address of the previous insurer.
e. Previous Policy Number

Period of nsurance from. -to

f. Type of cover Liability Only Cover / Package Cover / Others {specify)
g. Claims lodged during Year Number Amount (Rs.)
h. Has any insurance company ever : a) declined
the proposal
b) cancelled & refused to renew
(if yes reasons there for) ............. ....................... . . . .
(Yes /No) .
(Yes /No)
c) imposed special condition excess
(if yes, reasottsand details thereof) ....,., ................. ... .... ......
...........................................................................
(Yes /No)
(26) Details of Hire Purchase / Hypothecation / Lease a) s the
Vehicle proposed for insurance : Under Hire Purchase Under
Lease Agreement . Under Hypothecation
Agreement b) f yes, qive name and address of. concerned
Darties :
(Yes /No)
(Yes /No)
(Yes /No)
(27) Datails of Driver : (a) Age
Owner Driver Others
(b) Does the driver Suffer from defective vision or
hearing or any physical infirmity.
f "Yes" Please give details.
(c) Has the driver ever been involved / convicted for causing
any accident or loss ? f yes, Please give details as
under including the pending prosecution, if any :-
Driver's Name Date of Accident
Circumstances of
Accident / Claim
Loss / Cost Rs.
(28) Any other relevant information :
i Declarati&n Fy In!re'
/ We hereby d^clare that the statements made by me / us in this Proposal Form are ture to
the best of my / our knowledge and belife and f We hereby agree that this declaration shall
form the basis of the contract between me / us and the "THE NEW NDA ASSURANCE
COMPANY LMTED".
/ We also declare that any additions or alterations are carried out after the submission of this
proposal form then the same would be conveyed to the insurers immediately.
Place :
D*+e > Signature of Proposer

INSURANCE ACT -<=:, SECTl'N ,- - PROHI7ITION OF RE7ATES
1. No person shall allow or offer to allow, either directly or indirectly as an
inducement to
any person to take out or renew or continue an insurance in respect of any kind or
risk
relating to lives or property in ndia, any rebate of the whole or part of the
commission
payable or any rebate of the premium shown on the policy, nor shall any person
taking
out or renewing or continuing a policy accept any rebate except such rebate as
may
be allowed in accordance with the prospectus or tables of the nsurer.
2, Any person making default in complying with provisions of this section
shall be
punishjble with fine, which may extend to five hundred rupees.
1 r o n
c?
IMT 81 S5ecial e>cl!i&n an' c&35!l&ry 'e'!ctiFle
92pplicable to all commercial ;ehicles excludin taxis and motori&ed t#o #heelers carryin
passeners !or hire or re#ard:
Not#ithstandin anythin to the contrary contained herein it is hereby understood and
arees that
9a: S5ecial E>cl!i&n
3xcept in the case o! Total Loss o! the $ehicle insured" the insurer shall
Not be liable under .ection I o! the policy !or loss o! or damae to lamps" tyres.
tubes" muduards bonnet side parts" bumpers and paint #or0.
9b: C&35!l&ry De'!ctiFle
In addition to any amount #hich the insured may be re*uired to bear under para 9a:
abo$e the insured shall also bear under section I o! the policy in respect o! each and
e$ery e$ent 9includin e$ent i$in rise to total loss Bconstructi$e total loss : the !irst
Rs. ........ M o! any expenditure 9or any less expenditure #hich may be incurred :
!or #hich pro$ision is made under this policy and B or o! any expenditure by the
insurer in the exercise o! its discretion under condition No. 5 o! this policy.
I! the expenditure incurred by the insurer shall include any amount !or #hich the
insured is responsible hereunder such amount shall be repaid by the insured to the
insurer !orth #ith.
/or the purpose o! this 3ndorsement the expression 4 e$ent4 shall mean an e$ent or
series o! e$ents arisin out o! one cause in connection #ith the $ehicle insured in
respect o! #hich indemnity is pro$ided under this policy.
ab?ect other#ise to the terms conditions limitations and exceptions o! this policy. M to
insert amount as appropriate to the class o! $ehicle insured as per 8R 57 o! the (otor
JJme important points reardin Trans!er o! ;ehicle. I(T a C
O trans!er o! o#nership" the Liability Only co$er" either under a Liability Only policy or
ier a pac0ae policy" is deemed to ha$e been trans!erred in !a$our o! the person to
om the motor $ehicle is trans!erred #ith e!!ect !rom the date o! trans!er.
@J trans!eree shall apply #ithin !ourteen days !rom date o! trans!er in #ritin under
Snded deli$ery to the insurer #ho has insured the $ehicle" #ith the details o! the reistration
he $ehicle" the date o! trans!er o! the $ehicle" the pre$ious o#ner o! the $ehicle and the
number and date o! the insurance policy so that the insurer may ma0e the necessary
chanes in his record and !resh Certi!icate o! Insurance.
In case o! pac0ae policies" trans!er o! the 4 O#n Damae 4 section o! the policy in !a$our
o! the trans!eree" shall b made by the insurer only on receipt o! a speci!ic re*uest !rom the
trans!eree alon #ith consent o! the trans!eror. I! the trans!eree is not entitled to the bene!it
o! the No Claim +onus 9NC+: sho#n on th policy" or is entitled to a lesser percentae o!
NC+ than that existin in the policy" reco$ery o! the di!!erence bet#een the trans!eree<s
entitlement" i! any" and that sho#n on the Policy shall be made be!ore e!!ectin the trans!er.
2 !resh proposal /orm duly completed is to be obtained !rom the trans!eree in respect o!
both Liability only and Pac0ae policies.
Trans!er o! pac0ae policy in the name o! the trans!eree can be done only on ettin
acceptable e$idence o! sale and a !resh proposal !orm duly !illed and sined. The old
certi!icate o! insurance !or the $ehicle" is re*uired to be surrendered and a !ee o!
Rs.------9applicable as per tari!!: is to be collected !or issue o! !resh certi!icate in the
name o! trans!eree. I! !or any reason" the old certi!icate o! insurance is not surrendered" a
proper declaration to that e!!ect is to be ta0en !rom the trans!eree be!ore a ne# Certi!icate
o! Insurance is issued.
3ndorsement I(T , C is to be used.
.ome important points to be remembered reardin N& Clai3 "&n!.
500)No Claim +onus 9NC+: can be earned only in the O#n Damae section o! policies
co$erin all classes o! $ehicles but not on (otor Trade Policies 9Road Transit Ris0s
B Road Ris0sB Internal Ris0s: and policies #hich co$er only /ire and B or The!t Ris0s.
/or policies co$erin Liability #ith /ire and B or The!t Ris0s" the NC+ #ill be applicable
only on the /ire and B or The!t components o! the premium. 2n insured becomes
entitled to NC+ only at the rene#al o! a policy a!ter the expiry o! the !ull duration o!
11 months.
501)No Claim +onus" #here$er applicable" #ill be as per the !ollo#in table@
2ll Types o! ;ehicles E o! discount on o#n
damae premium.
No claim made or pendin durin the
Precedin !ull year o! insurance 17E
Precedin 1 consecuti$e years o! insurance 1KE
Precedin C consecuti$e years o! insurance CKE
precedin 5 consecuti$e years o! insurance 5KE
Precedin K consecuti$e years o! insurance K7E
Unit. (otor Insurance

O
.
L
s
>
S!n
et
cla
!e
I!
at
the
ren
e#
al
!alli
n
due
any
tim
e
bet
#e
en
1 st
Aul
y
177
1"
the
enti
tle
me
n
502
503
I
entit
led
NC
+ is
to
be
appl
ied
is o!
the
sam
e
clas
s 9as
per
(ot
or
Tari
!!:
as
the<
$ehi
cle
on
#hi
ch
the
NC
+
has
bee
n
earn
ed.
Pro$
ided
that
#he
re
the
insu
red
is an
indi
$idu
al"
and
o
504
per
cen
ta
e
o!
N
C+
ear
ne
d
on
a
$e
hic
le
o#
ne
d
by
an
ins
titu
tio
n
dur
in
the
per
iod
#h
en
it
#a
s
all
ott
ed
to
an
d
ex
clu
si$
ely
op
era
ted
505
In
t
h
e

e
$
e
n
t

o
!

t
h
e

i
n
s
u
r
e
d
"

t
r
a
n
s
!
e
r
r
i
n

h
i
s

i
n
s
u
)here the insured is unable to produce such e$idence o! NC+ entitlement !rom the
pre$ious insurer" the claimed NC+ may be permitted a!ter obtainin !rom the insured
a declaration as per the !ollo#in #ordins@
4 I B )e declare that the rate o! NC+ claimed by meBus is correct and that no claim as
arisen in the expirin policy period 9copy o! the policy enclosed:. I B )e !urther
underta0e that i! this declaration is !ound to be incorrect" all bene!its under the Policy
in respect o! section I o! the policy #ill stand !or!eited.4
Not#ithstandin the abo$e declaration" the insurer allo#in the NC+ #ill be oblied
to #rite to the policy issuin o!!ice o! the pre$ious insurer by recorded deli$ery callin
!or con!irmation o! the entitlement and rate o! NC+ !or the particular insured and the
pre$ious insurer shall be oblied to pro$ide the in!ormation souht #ithin C7 days o!
receipt o! the letter o! en*uiry !ailin #hich the matter #ill be treated as a breach o!
Tari!! on the part o! the pre$ious insurer #ithin 11 days a!ter rantin the co$er #ill
also constitute a breach o! the Tari!!.
506)I! an insured $ehicle is sold and not replaced immediately" or laid up" an the policy is
not rene#ed immediately a!ter expire" NC+" i! any" may be ranted on a subse*uent
insurance" pro$ided such !resh insurance is e!!ected #ithin C 9three: years !rom the
expiry o! the pre$ious insurance" The rate o! NC+ applicable to the !resh policy shall
be that earned at the expiry o! the last 11 months period o! insurance.
507)On production o! e$idence o! ha$in earned NC+ abroad" an insured may be ranted
NC+ on a ne# policy ta0en out in India as per entitlement earned abroad" pro$ided
the policy is ta0en out in India #ithin three years o! expiry o! the o$erseas insurance
policy" sub?ect to rele$ant pro$isions o! NC+ under these rules.
508)3xcept as pro$ided in Rules 9:" no NC+ can be allo#ed #hen a policy is not rene#ed
#ithin P7 days o! its expiry.
h: 3xcept as pro$ided in Rules9:"9h: and 9i: abo$e" NC+ is to be allo#ed only #hen
the $ehicle has been insured continuously !or a period o! 11 months #ithout any
brea0.
(otor Insurance
ANNE@UREI-
S.B/orm No" TA. t!t. 2.C. 5
T%E NE1 INDIA 2..UR2NC3 COM)ANY *IMITED
ijjfl^Ki qgOTFT*n<i<i : ^.$Rii tâU-H fttc&i, 87, wrrmirtftirnf, ijiii, gwf-400001. Re3',
& He*' Offie : New ndia Assurance Bdg,, 87, M. G. Road, Fort, Mumbai - 400 001 .
3-tyfftt *i<4wi : W^r ife, <jpft T^ffa, ^ Tfe % N4)
a
b, 5^ ~ 411 004. Re3io#*l Offie
: Sharda Centre, 2nd floor, Off Karve Road, Pune - 41 1 004,

c!Tc!T CTO) B MOTOR C*AIM FORM
JKflfej (<rat) / Divisional Office (Address) WTOt/<TirM sK. /Certificate Policy No..
---------------------------- ftut sraft / Period of nsurance________
:
. / Telephone No,______________________?R 9>. / Claim No.____________________
THIS ISSUE OF THIS FORM IS NOT TO 7E TA6EN AS AN ADMISSION OF LIA7ILITY
fw ?nft WSFSJ jjf % 3W t i
PLEASE ANSWER ALL RELE5ANT /UESTIONS FULLY
(^T? V*fa ^f ?t^ *n 1!\ 3T^[ ^r=T ^^)
(f space found insufficient please attach Separate Sheet)
. INSURED
(!"! # 9a: Name >......................................................
(a) q3NR% fotf w (b) Address for Correspondence :...........................................................
(n) ^fcwtaa;. (c) Telephone No. :.........................................................
2. *rrapr WT / THE INSURED 5EHICLE
Make & Year Chasis No.: Registration No.:
Engine No.: Dt. of Regn.:
A. %*) W*" +he ;ehile i# (ro(er 0or@i#3 o#'i+io#"B >............................................................
(yf") ^4i4i % ?wi ofr^f fî?T V*!*H % (tfs<
5KlMlco fam Tf T?T Srf?
(b) For what purpose was the vehicle being
used at the time to accident? :..........................................................
509) Was a trailer attached?........................:
510) f a Motor Cycle / Scooter...................:
511) Was a side-car attached?....................:
512) ^Tf f^fcRR lisst (*ftw =ft *t\# T *!:$) ?Tr^ W ^Tf?
2. Was a pillion rider carried? " :...........................................................
ADDTONAL NFORMATON (as applicable)
(#} 'Tsfi^rl ^^1 (^Klshirt) ^R
513) Registered Laden Weight.....................:
514) Unladen Weight....................................:
)r&5erty an' *iaFility In!rance
%B)
(c) Weight of Goods Carried :.........................,..............................
(i) Htfti ^t Tqd?t
(d) Nature of Permit :........................................................
(3) ^TeR f%^ "5ff T^ *flp5 ^t JTf>%
(e^ Nature of Goods Carried :........................................................
9X+: !i #t Mtri TC Mi'O/n Fn #t Fn'
(f) Was the Vehicle Plying for Hire? :........................................................
77 $% ^& G!en' srr'
(g) Was Trailer attached? :........................................................
!t : GT/T !EM! Mn TG ?rr(! G #s&rr
(h) Number of Passengers Carried :........................................................
(art) arprrfTi % snprrc <tifi<( ^t wm
(i) Number of Passengers Permitted :........................................................
3. 3*fcn % *m ^ragr / DRI5ER AT THE TIME OF ACCIDENT
) Gm 9a: Name @........................................................
(is) 3H (b) Age :
{*!) iwt (c) Address :........................................................
(^t) ^rr^TTOt 1. 4ife* t (d) is the Driver 1. Owner :
...............................................................................................................................................
515) %cH*M ûrar 2. Paid Driver
:
516) Hif^t> ^r ^3& TJI f^ ^
3. Owner's Relative of Friend :
(^) Trf^ %^f tftlft î^cfi ^t rit R^ ^ ^ 3TH% fît^R ^ ifioT ^
(e) f paid Driver, how long has he been in your
employment :
(5) $% ^f ^ft TOR TT i^ % =r?t ^ Tirr ^TTt?
(f) Was he under the influence or intoxicating
liquor or drugs? :
('t" 51M1 Rii !(f) sprpt>
9: Dri$in Licence Number @
9K!: ctiGdo Gar!t 5SGe9#i
(h) ssuing Authority
(3) *irtA % ffer 5nftqi?f
(i) Type of Vehicles Authorised to Drive
9C: 'n!!!% _t!t,!lMXQi #ai #rt!l ^ !t!t
(j) Date of Renewal & Expiry
9C: ) rilGt?y Gsip!t 9)t C).An!t Fn'
(k) Was the Licence Learner / Permanent?
94K: t!O^5A( 11 4A+TO B l,(%,! E !_R/I i!t 't'
() Details of Endorsement / Suspension if any?
9F: X/TI G ERQ!l CFE ira ?!cn !t'
(m) Has he been involved in any accident before?
f
13
!) 3f*rf =F^ft ?jfp5H S^l 3H ^ ^fît
1
! tf'H^
r
nT?
G G tit OTE _=rroi'
(n) Has he been charged by the Police?
f so, Why?

,. . OTHER INSURANCE
Details of other insurance policy / ies indemnifying in respect of this accident.
Unit N M&t&r In!rance
K. .M'n M
() W! sfa fiifsf (a) Date and Time
(w) WH : (b) Place
(3) ^fcfl % HSR? 3*TT% ^TR ^t JTffi
(c) Speed of your Vehicle at the time of accident
(i) j yfon *i sftrtt tefi t i
(d) Give Short description of the accident
. DETAILS OF ACCIDENT
KT ef t
<TsTt %
(h) f any third party was responsible for the accident,
give Name & Address : .
mt(tftt / DAMAGE TO INSURED 5EHICLE
(si) fft% ff ferro (a) Full Details of Damage :
(w) t{ura ^ 3ijinftcf 55PW (b) Estimated Cost of Repairs :
(c) When and where can the Damaged Vehicle be nspected?
. DAMAGE TO INSURED 5EHICLE
7.
(#) 1. 7n(a) Name
517) STOW (B) Occupation
518) TO fFfW^"rarft? (c) Whether your
Employee
(w) ^ (b) Address
Full Details of Personal njury Sustained
3fl *lf rf i / ^FT<f T^ î7 ' ' fW Wf af^ff o^f tf i sp} ^f ^ ^ r^f %
Name and Address of any Person / Hospital giving
Msdical attention to njured Person
*+&
w? Was Driver
/ any Occupant njured
^j ?i ?it î f^R^ *J f yes,
give Full Details
. INCURY TO DRI5ER . OCCUPANT
<. 0*f+ . WITNESS
>ii
:
w / spi mtel (ijfi ?t) % ^w sftr Tft ? Give
Names and Addresses of Passengers / other
witness if any
Was Accident reported to Police? f not, Why?
ift lit eft ft'B gfe*t ^w it? f yes,
to which Police Station? $, WT,
(iflrftf Wi) S CR Diary Number
10. wraft / THEFT
(a?)
(sn)
(1)
()
(d)
(l)
(e) (s) (()
00
wra am fitfti (a) Date and Time
WR (b) Place
rai sriiR *3ft ft w (c) What was Stolen
nfciww î sr^Hift'ti wra
Estimated Cost of Replacement
By whom Discovered and Reported? w ^Kt ft ^jjra ^few ^ it ipft? Has theft been
Reported to Police?
%gfea^Hfl (h) Which Police Station *ft. am. ('hM-fl') Mli) wrtt S C.R. Diary Number

- - . <nt *FT . PAST CLAIM HISTORY
00
(a) Was any Claim reported in the past on the
Vehicle during earlier year's policy period? :
(b) f so, give following Details
519) j>fem ^ft difly (a) Date of Accident
520) ?HPTO (b) Claim Number
521) Mffefl gwiB (c) Policy Number
522) MiltrStd ofrft +<it=d'*i *lt!
w<) W 1HT"
4. Particulars of Policy ssuing Office
(a) Was any claim reported in the past on the same vehicle during current year's policy? :
(b) f so, give following Details 1 , <5rar
SPTO (a) Claim Number 2. lifertaw* (b)
Amount of Claim

-9.
r!t Grr % / ADDTONAL NFORMATON NSURED DESRES TO GVE

!!t E Tn!t t a!tt !l lift ft / ifc wi it *ref *^ nsa J !en
! / We the above named do hereby, to the best of my / our knowledge & belief warrant the truth of the foregoing
statements in every respect & i / We agree that if / We have made, or in any further declaration the company may require
in respect of the said accident, shall make any false or fraudulent statement or any suppression or concealment the policy
shall be void & ati rights to recover there under in respect of past or future accidents shall be forfeited.
f^ri ^j / Date ^rpjR^ % FRETEJR & Signature of th0 insured
Ganesh/Qty. 100 Pktx1QG/Qrc!er No. 433/08-2006
Unit. M&t&r In!rance
NOTES
..1 INTRODUCTION
Rapid industriali&ation has led to an increasin use o! machinery. These machines are
exposed to accidental brea0do#ns or un!oreseen damaes. )ith proress in
industriali&ation" there has been an increase in the in!rastructure bein built" li0e brides"
dams" tunnels" pipelines etc. These assets are $ulnerable to physical loss or damae by a
$ariety o! perils resultin in !inancial loss and loss o! human resources. This has led to the
need !or protection o! these assets #hich is ta0en care by the di!!erent enineerin insurances.
In India" the oriin o! enineerin insurance can be traced to the early !i!ties #hen Ne#
India 2ssurance Co. Ltd. set up an enineerin department" !ollo#ed by the Oriental
Company.
3nineerin insurance is hihly speciali&ed and re*uires technical expertise in ris0 inspection"
ris0 impro$ement" ratin" under#ritin etc. #hich ser$ices is pro$ided by enineers !rom
$arious disciplines employed by insurance companies.
..8 "RIEF %ISTORY ________________________________________________
2!ter the industrial re$olution" enineerin insurance oriinated #ith the ob?ect o! pre$ention
o! steam boiler explosion. There #ere !re*uent explosions to boilers in$ol$in se$ere loss
to property and li!e. Thus enineerin insurance oriinated to pro$ide protection to steam
boilers.
..3 TY)ES OF )O*ICIES
;arious policies can be classi!ied into t#o broad phases.
C&ntr!cti&n 5Gae
523)Contractors all ris0
524)3rection all ris0 or storae cum erection
525)(arine cum erection
526)Contract #or0s insurance
3: 2d$anced loss o! pro!it
O5erati&nal 5Gae
2: (achinery brea0do#n
Unit P 3nineerin Insurance ,1
527) +oiler and pressure plant
528) Contractors plant Y machinery
529) 3lectronic 3*uipment
3: Deterioration o! .toc0
/: (achinery loss o! pro!it
.=$ SCO)E OF CO-ER
In this unit #e shall no# see the scope o! co$er under di!!erent c&ntr!cti&n 5Gae
policies as classi!ied abo$e. .cope o! co$er under &5erati&nal 5Gae policies #ill be
discussed in the UNIT 1/ ENGINEERING INSURANCE 6 II
$. CONTRACTORSJ A** RIS0 KCARE
1. Intr&'!cti&n
Contractor<s 2ll,Ris0 Policy is specially desined to expand !inancial protection to
the ci$il enineerin contractors in the e$ent o! accident to the ci$il enineerin #or0s
under construction. The name o! the policy itsel! indicates that it is specially desined
to cater to the needs o! the ci$il enineerin contractor in the matter o! accidents to
#or0s under construction.
Ordinarily a ci$il enineerin contractor tenders !or a ?ob on the basis o! desin
speci!ications pro$ided by the principal or soil conditions" #eather conditions etc.
Contractor is re*uired to construct the ci$il enineerin structure on the basis o!
dra#ins and speci!ications !or materials prescribed by the architect or structural
enineers" it is not #ithin the scope o! the contractor to $eri!y the desin and
speci!ications. %is responsibility is restricted to construct as per the speci!ications
and desins o! the architect andBor desiner.
2ny loss or damae to the contract #or0s durin the course o! the construction due
to 2NI C2U.3 #ill result in hea$y !inancial loss to the contractor. The principalB
o#ner normally ma0es the contractor responsible !or accidents due to !aulty
#or0manship" !aulty material and other errors o! the contractor in the contract
conditions. 2 contractor<s marin o! pro!it #ill not be ade*uate to reconstruct the
#or0 a!ter damae. It is also not a commercial proposition !or the contractor to
pro$ide !unds !or such un!oreseen and sudden losses. Thus in the e$ent o! a claim"
contractor #ill not be in a position to /ind resources !or reinstatin the damaed
property at his cost. The Contractor<s 2ll Ris0 Insurance #ill come to the contractor
rescue o! supports him !inancially to o$ercome hea$y losses.
The insurance Policy can be ta0en by Principal or the contractor or sub,contractor.
GENERA* REGU*ATION
RE*ATING TO CONTRACTORS# A** RIS0S INSURANCE FOR RIS0S
%A-ING SUM INSURED U)TO R. 1/ CRORES
1. <!ri'icti&n:
This applies to all Ris0 located in India" !or #hich the $alue o! the Ci$il )or0s in$ol$ed
is more than K7E o! the total contract $alue.
1. /or the purpose o! these reulations the .ums Insured on the !ollo#in items are to
be ta0en into account !or arri$in at total .um Insured !or C2R Insurance.
530)(arine 9Imports: , Landed cost at site.
531)(arine 9Indienous: , Landed cost at site.
532)Cost o! Construction.
533)Permanent Ci$il 3nineerin )or0s.
534)%al! the escalated ;alue" i! escalation is opted !or.
3. MarineMTranit Ri9 C&nnecte' CitG C&ntract&rJ all Ri9 In:
)hen (arineBTransit Insurance connected #ith Contractor<s 2ll Ris0 insurance o!
any pro?ect 9sum Insured upto Rs. 17 Crores: is placed in India simultaneously or
later on in one combined policy or under separate policies" in one department or in
di!!erent departments" the matter relatin to both@
i: (arineBTransit Co$er and ii:
Contractors 2ll Ris0s Co$er
Is re*uired to be under#ritten" sub?ect to these 8eneral Reulation.
N.". (arine rate is no# non, tari!!.
O
\
ni9 P 3nineerin Insurance ,1 J
$. S!F6c&ntract F&r3in: )art &4 a )r&Iect:
2s reards .ub,contracts !ormin part o! a pro?ect" it is claimed that irrespecti$e o!
#hether the Pro?ect ;alue has been bro0en into $arious sections and ordersBcontracts
are placed #ith di!!erent suppliersBcontractorsBsub,contractors or the insureds carry
out the #or0 themsel$es departmentally" the insurances !or all such .ub,contractors
are sub?ect to these 8eneral Reulation.
Rate 4&r Marine Tranit C&ver
Rates i$en in the uidelines shall be chared !or ne# material #ith 42ll Ris04 co$er.
In case o! restricted (arine transit co$er no reduction in rate is allo#ed.
/or (arine transit insurance !or used and or second hand materials a minimum loadin
o! K7E should be chared o$er and abo$e the rates chared !or ne# material.
(any times the pro?ect materials are re*uired to be sent to the /abricator<s or some
other places !or di!!erent purposes" either !rom the supplier<s premises or !rom the
site o! construction. In such cases" additional rates are to be chared !or extendin
the C2R policy to co$er the additional transits in$ol$ed and !or the storae at
/abricator<s premisesB#or0shop.
o$ers@ /ire" lihtnin" explosion" the!t" burlary.
Nat!ral Cala3itie:
)indstorm o! any 0ind
/lood" inundation
3arth*ua0e
Land slidin" roc0 sidin Y subsidence.
C&ntr!cti&n Fa!lt:
De!ecti$e material" #or0manship" collapse , please read exclusions
%!3an Err&r:
" o! s0ill or nelience o! #or0ers
OtGer )eril:
(alicious damae" air crash" blastin.
RIOT an' STRI0ES:
Optional can be co$ered at additional premium.
E>cl!i&n:
.ome o! the important exclusion are as under@
535)Loss or damae due to !aulty desin.
536)Cost o! replacement or recti!ication o! de!ecti$e material andBor #or0manship" but
this exclusion shall not be deemed to exclude loss or damae resultin !rom an accident
due to such de!ecti$e material and or #or0manship.
537)(echanical and or electrical brea0do#n or deranement o! construction plant"
e*uipment and construction machinery.
538)Deductible !ranchise stated in the schedule to be born by the Insured in any one
occurrence.
ADDITIONA* CO-ER FOR CAR )O*ICY:
1. TGir' )arty *iaFility C&ver:
The rate as applicable !or C2R co$er is to be chared !or Third Party Liability
Co$er upto the limits speci!ied in the tari!!.
This term implies leal liability arisin out o! property damae or bodily in?ury su!!ered
by Third parties and occurrin in connection #ith the contract #or0s on or near the
buildin site. %o#e$er the insurers #ill not indemni!y any claims !rom the employees
or #or0men o! the contractor< s or the principle or any other !irm connected #ith the
contract #or0 or members o! their !amilies.
8. Clearance an' re3&val &4 'eFri:
In the e$ent o! accidental damae" there #ill be lot o! debris o! damaed plant" #hich
#ill be re*uired to be cleared be!ore any repairin is carried out and this in$ol$es a
substantial expenditure.
Insured desires to co$er this" he had to speci!y a limit o! indemnity. (aximum limit
upto #hich insured #ill be indemni!ied in case o! remo$al o! debris #ill be upto the
limit to indemnity pro$ided in the policy.
3
.
S
!
r
r
&
!
n
'
i
n
:

5
r
&
5
e
r
t
y

&
4
t
G
e

I
n
!
r
e
'
:
/or
co$
eri
n
the
spe
ci!i
ed
.ur
roundin
Property o! the
insured" the
rate applicable
#ill be K7E o!
the C2R rate
to be chared
on the limit o!
.um insured
!ixed !or the
surroundin
property. The
Policy 3xcess
9Normal
Y2O8B
Collapse
Claims: should
apply !or
surroundin
Property also.
$.
Ecalati&
n
)r&vii&n
:
.ometimes
additional sum
insured is
re*uired !or
3scalation in
the $alues.
%o#e$er"
3scalation
+ene!it #ill be
limited to
maximum o!
the sum
insured !or
C2R 9the
escalation
limit may be
expressed
either in
percentae or
in amount:
and #ill be
per
mit
ted
onl
y
onc
e at
the
tim
e o!
inc
epti
on
o!
the
C2
R
Pol
icy.
2d
diti
ona
l
pre
miu
m
is to
be
cha
re
d
!or
43s
cala
tion
Pro
$isi
on<
at
the
rate
pres
crib
ed
!or
C2
R but on the
K7E o! the
amount o!
escalation.
The method o!
premium
calculation #ill
be as under@
.
a.
2ssum
e the
Pro?ect
.um
Insure
d
b.
2s
su
m
e
3s
cal
ati
on
pe
rc
en
ta
e
is
17
E
c.
2
d
d
i
t
i
o
n
a
l

p
r
e
m
i
u
m
t
o

b
e

c
h
a
r
e
d

a
t

t
h
e
p
r
e
s
c
r
i
b
e
d

r
a
t
e

!
o
r

C
2
R

c
o
$
e
r
"

#
i
l
l

b
e

o
n
K7
E
o!
th
e
3s
ca
lat
io
n
Pr
Rs. 5 Crores
Rs. 57 La0hs
o$i
sio
nal
co
$er
i.e.
on
,
Rs.
17
La
0h
s.
;
T
co
$er
in
3x
pre
ss
/r
ei
ht
9ai
r
!re
ih
t
ex
clu
de
d:.
%o
lid
ay
an
d
O$
ert
im
e
Ra
tes
o!
)
a
es
#il
l
be
at
the
ba
sic
C
2
R
rat
e
9ex
clu
din

e
x
t
r
a
s

!
o
r

e
a
r
t
h
*
u
a
0
e
s
"
e
t
c
.
:

t
o

b
e

a
p
p
l
i
e
d

o
n

the
limit
selecte
d.
!i.
C&ntr!ct
i&n=
)lant
an'
ET!i53e
nt:
This
term
implie
s
mobil
e
cranes
" to#er
cranes
"
hoists"
scrape
rs"
exca$
ators"
loader
s"
?umper
s etc.
/or
.um
Insure
d not
excee
din
KE o!
the
C2R
insura
nce
sub?ec
t to
maxi
mum
+. Maintenance -iit an' E>ten'e' Maintenance C&ver :
The Policy can be extended to co$er the (aintenance $isits and 3xtended
(aintenance.
Rates to be chared !or extended maintenance and limited maintenance $isits co$er
!or a period o! L months.
3xtended maintenance co$er 7.7K E !or 11 months Limited maintenance
$isit co$er 7.71KE !or L months Premium on prorata basis !or periods other
than LB11 months is not allo#ed.
The rates and excesses applicable !or maintenance Co$er !or 11 months #ill be as
under@
i: (aintenance ;isits Co$er 7.K7 per mile as applicable collapses claims
ii: 3xtended (aintenance 1.77 per mile as applicable collapses claims
Co $er !or 11 months@
,. A''iti&nal rate 4&r EartGT!a9e KFire P SG&c9E )eril:
". ERECTION A** RIS0S KEARE )O*ICY
)hereas Contractors 2ll Ris0 policy is concerned #ith contracts in$ol$in ci$il enineerin
#or0s such as construction o! buildins" brides etc. the 3rection 2ll,Ris0s Policy 932R:
also 0no#n as .torae,Cum,3rection 9.C3: policy is concerned #ith erection o! electrical
plant and machinery and e*uipment and structures no or $ery little ci$il enineerin #or0.
The co$erae is the same as under C. 2.R.policy. Third party liability co$er may be added.
The sum insured shall be the completely erected $alue o! the property inclusi$e o! !reiht
etc." and the cost o! erection.a$erae is applied i! there is under insurance and the insured
has to declare chanes in the sum insured due to mar0et !luctuations in #aes or prices.
The insurance shall commence" only !rom the time a!ter the loadin o! the property speci!ied
in the schedule !rom any con$eyance at the site speci!ied in the schedule and shall continue
until immediately a!ter the !irst test operation or test loadin is completed 9#hiche$er is
earlier: but in no case beyond !our #ee0s !rom the day on #hich" a!ter completion o!
erection a trial runnin is made and readiness !or #or0 is declared by the erectorsB
contractors" #hiche$er is earlier.
nil P 3nineerin Insurance ,
1
^ Activity A:
<i!!erentiate
bet#een
Contractors 2ll,
Ris0 9C2R:
policy and
3rection 2ll,
Ris0 932R: ulicy
#ith re!erence to
the !ollo#in@
u
b
?
e
c
t

m
a
t
t
e
r

m
m

i
n
s
u
r
e
d
h
e

c
o
$
e
r
a
e

u
n
d
e
r

t
h
e

p
o
l
i
c
y

e
x
t
e
n
s
i
o
n
s

u
n
d
e
r

t
h
e

p
o
l
i
c
y

<
<
e
r
i
o
d

o
!

i
n
s
u
r
a
n
c
e
C.
MARI
NE6
CUM6
STOR
AGE6
CUM
EREC
TION
A**
RIS0
INSU
RAN
CE
o$er
under
a
standa
rd
32R
policy
comm
ences
#ith
the
deli$er
y o!
the
!irst
consinment Ji
plant and
machinery at the
site o! erection.
This #ould mean
the insured has to
ta0e a ",parate
(arine Transit
policy !or
imported
e*uipments and
inland transit
policy !or
idienous
e*uipment" both
up to the pro?ect
site. 2 distinct
ad$antae o!
combines marineB
ansit,cum,
election policy is
that the co$er
starts riht !rom
the moment
machinery lea$es
te !oreinBIndian
manu!acturers
#arehouse and
remains
continuously in
!orce durin
$oyae transit till
the !actory site"
and storae at
site o! erection"
till the erection
is o$er and
*uipments ha$e
been tested and
commissioned.
Co$er is thus
continuous and
ninterrupted. This
policy pro$ides
#ider co$er than
under ICC 92:.
Under these
clause
s" Se
co$er
termin
ates
a!ter
L7
days
o!
unload
in o!
the
$essel
at the
port
and
under
RailB
oad
transit"
co$er
termin
ates 6
days
a!ter
arri$al
o! the
truc0
at
destin
ation.
RI.=
CO-E
RED:
he
policy
co$er
s
accid
ental
physi
cal
loss
or
dama
e due to any
cause except
#hich are
>Seci!icaliy
excluded"
G 2ct o! 8od
perils@
Natural
calamities
li0e
3arth*ua0e"
.ubsidence"
Landslide"
Roc0slide"
/lood"
Inundation"
.torm"
Cyclone"
Collapse"
and )ater
damae !or
#ater Ris0
i /ire"
Lihtnin" Riot
Y .tri0e Y
.abotae.
> The!t Y
+urlary.
O /aults durin
erection" lac0 o!
s0illBcarelessnes
s o! #or0ers and
handlin ris0s.
539) .hort Circuit" explosions tearin apart on account o! centri!ual !orces.
540) 3lectrical Y (echanical !ailure durin trial Y testin.
RIS0 NOT CO-ERED:
541) )ar and similar other ris0s includin Nuclear reaction"
542) Damaes !allin under manu!acturer<s uarantee.
543) Cost o! recti!ication or correction o! any error durin erection unless results into
physical loss.
544) )ill!ul act or ross nelience o! the insured.
545) Conse*uential loss o! any 0ind and contractor liability.
546) Normal #ear and tear" radual deterioration due to atmosphere condition resultin
into rust" scratchin o! painted and polished sur!ace" brea0ae o! lass etc.
SUM INSURED :
The sum insured should be clearly speci!ied in the policy !or each and e$ery machine
statin the /O+B8I/ $alue plus incidental expenses li0e customs duty" excise duty" octroi"
!reiht" insurance chares etc. Plus cost o! erection" permanent ci$il enineerin #or0.
GENERA* REGU*ATIONS
<URISDICTION: This applies to all Ris0s located in India.
SU"<ECT MATTER: +oilers" trans!ormers" s#itchear" compressor and plant !or
manu!acturin purposes" etc. .tructural steel#or0" tan0s oil re!inery plant" blast !urnaces
etc. The policy may co$er an indi$idual machine e.. turbine" enerator etc. or an o$erall
composite pac0ae e.. po#er eneratin station" steel mill" oil re!inery" industrial premises
etc.
INSURED )ARTY: The insured party can be manu!acturer" supplier" contractor"
subcontractor o#ner o! the machinery. The policy can be ta0en ?ointly by the o#ner
co$erin interest all other parties.
Unit P 3nineerin Insurance
,1
SU"6
CONTRACTS
FORMING
)ART OF A
)RO<ECT
2s reards .ub,
Contracts !ormin
part o! a Pro?ect"
it is clari!ied that
irrespecti$e o!
#hether Pro?ect
$alue has been
bro0en into
$arious sections
and orders B
contracts are
placed #ith
di!!erent
suppliersBcontracto
rBsub,contractors
or the Insureds
carry out the #or0
themsel$es
departmentally" the
Insurances !or all
such sub,contracts
are sub?ect to these
8eneral
Reulations.
MARINEMTRAN
SIT RIS0S
CONNECTED
1IT%
ERECTION
A** RIS0S
INSURANCE:
)here
(arineBTransit
Insurance
connected #ith
3rection 2ll Ris0s
Insurance o! any
pro?ect
9.um
Insured
upto
Rs. K7
crores:
is
placed
in India
simulta
neously
or later
in one
combin
ed
policy
or
under
separat
e
policie
s. In
one
depart
ment
or in
di!!ere
nt
depart
ments
the
matter
relatin
to both@
1:
(arine
BTransi
t Co$er
and
ii:
3rectio
n 2ll Ris0s Co$er
is re*uired to be
under#ritten"
sub?ect to these
8eneral
Reulations.
RATE FOR
MARINE M
TRANSIT
CO-ER:
2s per re$ised
uideline (arine
rates is no# non
Tari!! K.
The competent
authority #ould
decide the
premium rates
dependin on the
merit o! each
case.
)eri&' &4 C&ver:
The period o!
co$er is i$en
accordin to the
re*uirement o! the
client !rom 1
month to 15
months as may be
re*uired and it
includ
es
usuall
y 1
month<
s test
period
!or
each
machi
ne. 2s
transit
policie
s are
$oya
e
policie
s" no
speci!i
c
period
is
stated
!or
transit
section
. The
premi
um
has to
be
paid
be!ore
dispat
ch o!
!irst
consi
nment
!or the
pro?ect
.
One
can
select
more
than 1
month<s test
period upto
maximum o! C
months by payin
additional premium.
N&te:
547)(arine policy is to be ta0en simultaneously to a$oid inspection o! the e*uipment B
item
548)Rates !or .torae,cum,3rection are standardi&ed in the tari!!. (arine rates are non,
tari!!.
549)The pro$ision relatin to $olume discount or any other special discounts allo#ed in
the basic storae cum erection rate 9other than the discount !or hiher excess: is not
to be applied in respect o! extension rates.
5 The applicable extension rate should be chared on the erected $alue o! the property
as #ell as on the limits o! indemnity selected in respect o! continencies li0e express
!reiht debris remo$al" third party liability etc. durin the extension period.
550)In respect o! escalation amount and the limit o! indemnity on surroundin property
the premium rate applicable #ill be at the extension rate applied on hal! o! amount
selected !or this purpose.
551)Testin period a$ailable under the policy shall cease to operate #ith the commencement
o! the commercial production or #ith the handin o$er o! the plant to the principal
#hiche$er is earlier. In no case" the duration o! the testin period shall exceed 11
months.
552)No /ire Policy can be issued durin 4Testin period4 !or items co$ered under (C3
policies.
553)Proposal !or co$erae o! second hand plant and machinery must be care!ully examined
and should be accepted only on purchase cost. Documents reardin both purchases
cost and replacement cost are necessarily to be $eri!ied.
554)Irrespecti$e o! the sum insured additional rates are to be chared !or earth*ua0e9!ire
Y shoc0: perils o$er and abo$e the (arine,cum 3rection rates !or ris0s located in
the earth*ua0e &ones.
E@TENSION OF CO-ER
Our 3rection Policy can be suitably extended !or the $arious purposes as may be re*uired
by the party ta0in insurance as under.
555)Third party Liability , !or property damae and personal in?ury.
556)Cost o! remo$al o! debris.
3nineerin Insurance ,1
557) Ci$il 3nineerin )or0s connected #ith 3rection o! (achinery.
558) 3scalation Pro$ision.
559) .urroundin Property.
560) 3xtended maintenance co$er.
1E T%IRD )ARTY *IA"I*ITY CO-ER
TGe rate a a55licaFle 4&r Erecti&n All Ri9 C&ver i t& Fe cGar:e' 4&r tGir'
5arty liaFility c&ver= !5t& tGe 4&ll&Cin: li3it.
561) /or policies #ith sum insured o!
Rs. 17 crores. 2ny one person B2ny
one accidentB Durin the entire period
o! (C3 Co$er.
562) /or policies #ith sum insured abo$e
Rs. 17 crores. 2ny one person B2ny
one accidentB Durin the entire
period o! (C3 Co$er
Upto Rs. 1 crores
17E o! the completely erected
$alue or Rs. 17 crores
#hiche$er is lo#er.
1: C*EARANCE AND REMO-A* OF DE"RIS :
The rate applicable !or 3rection 2ll Ris0s co$er is to be chared on the limit o! .um
Insured !ixed !or <Clearance and Remo$al o! Debris<.
)hen the Pro?ect is a mix o! old and ne# machinery the 32R rate as applicable !or
the ne# machinery is to be chared on the limit o! sum insured selected !or Clearance
and Remo$al o! Debris.
The policy excess 9NormalBTestin Period: should apply !or the Clearance and
Remo$al o! Debris< claims.
E CI-I* 1OR0S:
The rate as applicable !or 3rection 2ll Ris0s co$er is to be chared on the limit o!
sum insured !ixed !or Ci$il )or0s.
The policy excess 9NormalBTestin Period should apply !or Ci$il )or0s also.
95: ESCA*ATION )RO-ISION:
.ometimes additional sum insured is re*uired !or escalation in the $alues. %o#e$er
the escalation bene!it #ill be limited to a maximum o! K7E o! the sum insured !or
(C3 9the escalation limit may be expressed either in percentae or in amount: and
#ill be permitted only once at the time o! inception o! the (C3 policy.
2dditional Premium is to be chared !or <3scalation Pro$ision< at the rates prescribed
!or (C3 9as applicable: but on K7E o! the amount o! escalation. In a (C3 Policy"
i! escalation is chosen only !or 32R portion" the 32R rate #ill be applied on K7E o!
the amount o! escalation. The method o! premium calculation #ill be as under@
563)2ssume the pro?ect sum insured Rs. 5 Crores
564)2ssume escalation percentae is 17E Rs. 57"77"777
565)2dditional premium to be chared at the prescribed rate Rs. 17"77"777 !or
(C3 co$er #ill be on K7E o! the escalation pro$isional co$er i.e. on
566)I! the escalation re!ers to only 32R co$er the 32R rates #ill be applied> on the
other hand i! the escalation pro$ision applied to (C3 co$er" the combined rate
#ill be applied.
K;E SURROUNDING )RO)ERTY OF T%E INSURED:
/or co$erin the speci!ied surroundin property o! the insured" the rate applicable
#ill be K7E o! the 32R rate to be chared on the limit o! sum insured !ixed !or the
surroundin property.
)here the pro?ect is a mix o! both old and ne# machinery K7E o! the 32R rate as
applicable !or ne# machinery is to be chared on the limit o! sum insured !ixed !or the
surroundin property.
The policy excess 9NormalBTestin: should apply !or surroundin property also.
K(E ADDITIONA* RATE FOR E@)RESS FREIG%T KAIR FREIG%T
E@C*UDEDE= %O*IDAY AND O-ERTIME RATES OF 1AGES
The additional premium !or co$erin 3xpress /reiht 92ir /reiht excluded:" %oliday
and O$ertime Rate o! )aes> #ill be at the basic 32R rate 9excludin extras !or
3arth*ua0e" Dismantlin" etc.: to be applied on the limit selected.
Unii P 3nineerin Insurance
,1
96:
ADDITIONA*
RATE FOR AIR
FREIG%T
ON*Y:
The rate and
excess as
under shall be
chared
exclusi$ely
!or items o!
2ir /reiht
only and
sub?ect to the
limit selected
by the Insured
to Indemnity
aainst 2ir
/reiht only.
R
a
t
e
@

K

E

o
n

t
h
e

a
m
o
u
n
t

o
!

i
n
d
e
m
n
i
t
y

s
e
l
e
c
t
e
d
.

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x
c
e
s
s
@

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o
n

t
h
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i
r

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e
i
h
t

i
n
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u
r
r
e
d

p
e
r

c
l
a
i
m
9N:
ADDI
TION
A*
CUST
OMS
DUTY
:
Th
e
co
$e
r
!or
2
dd
iti
on
al
Cu
sto
ms
D
ut
y
#i
ll
be
sub?ect to the
!ollo#in
rates" terms
and condition@
567) Th
e co$er
!or
additional
Customs
Duty #ill
be sub?ect
to the
!ollo#in
rates"
terms and
conditions
.
568) Th
e speci!ic
limit !or
additional
Customs
Duty
either in
percenta
e or in
amount
has to be
selected
by the
insured
at the
inception
o! the
Policy
and can
be
reinstated
in the
e$ent o!
loss.
569) Th
e rate and
excess #ill be
as under@
R
at
e@
1
E

t
o
b
e
c
h
a
r
e
d
o
n
t
h
e
a
d
d
it
i
o
n
al
C
u
st
o
m
s
D
u
t
y
a
m
o
u
n
t
s
elected.
3xcess@
KE o! the
additional
Customs
Duty
incurred"
in
addition
to the
amount
applicabl
e !or the
a!!ected
item
under the
policy.
9P:
CONSTRUCTI
ON
MAC%INERY
)*ANT AND
E7UI)MENT:
(any times a
separate .um
Insured is
!ixed !or
Construction
Plant"
(achinery
and
3*uipment
used !or such
pro?ects.
)here the
.um Insured
!or
Construction
Plant"
(achinery
and
3*uipments
does not
exceed KE o!
..
I.
or
Rs
.
1K
"7
7"
77
76
,
#
hi
ch
e$
er
is
lo
#
er.
T
he
sa
m
e
ca
n
be
co
$e
re
d
un
de
r
th
e
3
2
R
Po
lic
y
at
rat
es
an
d excesses as
per the CP(
Tari!! issued
by <T28< !or
ratin o! CP(
Insurance.
)here the
..I. !or
Construction
Plant"
(achinery
and
3*uipments
exceeds
Rs.1K lacs" the
same should
be separately
co$ered under
the
Contractors
Plant and
(achinery
Insurance
Policy and at
the rates and
excesses as
per the Tari!!
issued by the
T28 !or
ratin o! CP(
Insurance.
917: (2INT3N2NC3 -ISITS AND E@TENDED MAINTENANCE CO-ER:
The Policy can be extended to co$er the (aintenance ;isits and 3xtended
(aintenance. The rates !or these #ill be as under@
aE *i3ite' Maintenance -iit C&ver:
In consideration o! the payment o! an additional premium by the insured 9#hich
is included in the total premium set !orth in the .chedule:. It is hereby declared
and areed that the indemnity pro$ided by this policy is extended to include
(aintenance Co$er !or the period o!.........months to be rec0oned !rom the
date o! completion to testin pro$ided the policy period has been extended till
completion o! testin. %o#e$er" durin the (aintenance Period this insurance
shall co$er solely loss o! or damae to the contract #or0s caused by the insured
contractor9s: in the course o! the operations under the maintenance pro$isions
o! the contract.
FE E>ten'e' Maintenance C&ver:
In consideration o! the payment o! an additional premium by the Insured 9#hich
is included in the Total Premium set !orth in the .chedule:" it is hereby declared
and areed that the indemnity pro$ided by this policy is extended to include
(aintenance Co$er !or the period o!.........months to be rec0oned !rom the
date o! completion o! testin" pro$ided that policy period has been extended till
completion o! Testin. %o#e$er durin the (aintenance Period this insurance
shall co$er loss or damae to the contract #or0s.
9i: Caused by the Insured contractor9s: in the course o! operations carried
out !or the purpose o! complyin #ith the obliations under the maintenance
pro$isions o! the contract.
9ii: Occurrin durin the maintenance period pro$ided such loss or damae
#as caused on the site durin the erection period.The rates and excess
applicable !or (aintenance Co$er !or 11 months #ill be as under@
Rate E>cee
9i: (aintenance $isits co$er !or testin period 7.K7 per mile as applicable
9ii: 3xtended (aintenance co$er !or 11 months 1.77 per mile ,do,
JJlit P 3nineerin Insurance
,1
The
!ollo#in
rates
should be
chared
!or
extended
maintena
nce and
maintena
nce $isit
co$er !or
the
period o!
six
months.
3xtended
maintena
nce
,
7.7KE
(aintena
nce $isit
co$er
,
7.71KE
Charin
premium on
pro,rata basis
!or period other
than LB11
months is not
allo#ed. O lese
co$ers should
not be ranted
!or periods
exceedin 11
months.
in case o! deletion
o! (aintenance
$isitB3xtended
maintenance
co$er
a$aile
d at
the
incep
tion
(C3
B32R
polici
es
be!or
e
attac
hmen
t o!
the
ris0"
re!un
d o!
prem
ium
may
be
i$en
by
saini
n
1KE
o! the
prem
ium
under
this
exten
sion.
In
case
the
ris0
is
attac
hed"
no
re!un
d mil
be
allo#
ed !or deletion
o! (aintenance
$isitB3xtended
(aintenance
co$er.
RATE FOR
DISMANT*IN
G CO-ER :
< he additional
rates !or
dismantlin
co$er #ill be
L7E o! the total
.C3 Rate"
irrespecti$e "i the
period o!
dismantlin.
INCR32.3 IN
SUM INSURED
:
i lie sum
insured is
increased
durin the
currency o! the
policy" short
period scale o!
rates ill apply to
increase the
amounts.
6J Activity " :
2n insured
re*uires a
(arine Policy
!or the
imported
e*uipments and
he also #ants
to $er the ris0
durin the
period o!
storae o! the
e*uipment and
subs
e*ue
nt
erect
ion
o!
entire
plant.
/rom
#hat
#e
ha$e
studie
d
abo$e
in the
(arin
e,
cum,
3recti
on
co$er"
ho#
#ould
you
con$i
nce
the
insure
d to
ta0e a
combi
ned
(arin
e,
cum,
3recti
on
policy
instea
d o!
ta0in
separa
te
co$er
!or
transit
" storae and
erection'
D. CONTRACTORS A** RIS0 INSURANCE
This policy is a combination o! the C2R policy and the 32R policy. In practice" #e may
come across some special type o! contracts in #hich both" the ci$il enineerin #or0 and
machinery installation #or0 may be o! a sini!icant deree" !or example" a hydro,electric
pro?ect.
Thus" neither the 32R nor the C2R policy alone can meet insurance re*uirements o! the
#hole pro?ect. Under the circumstances" a combination o! the C2R and 32R policies is
prepared and is called the Contract )or0s Policy. The normal terms and conditions o! the
C2R and 32R policies apply to the respecti$e #or0s" but the combined policy helps in
eliminatin any aps in co$er that #ould ha$e occurred i! separate C2R and 32R policies
#ere issued.
E. AD-ANCED *OSS OF )ROFIT )O*ICY
2d$anced loss o! pro!it re!ers to a particular class o! conse*uential loss insurance and
co$ers !inancial conse*uences o! a pro?ect bein delayed because o! accidental damae
to the pro?ect materials. This policy is issued in ad$ance o! the actual commencement o!
business.
Ob?ect the ob?ect o! an 2LOP insurance is to indemni!y the principal or the pro?ect o#ner
!or the actual loss sustained due to a delay in commencement o! commercial operations o!
a ne# pro?ect under installationBconstruction. This delay must be caused by direct physical
loss or damae admissible under the (aterial.
The Insured , The insured can only be the PrincipleBO#ner o! the pro?ect" that is" the party
#ho stands to lose estimated re$enue earnins i! the pro?ect ets delayed.
.um Insured , The sum insured has to be based on assumptions and its de!inition is on
4#ould ha$e been4basis. Normally" the budetin and costin calculation on #hich the
!inancial model o! the pro?ect are based are used in computin the sum insured.
Period o! insurance , The period o! insurance shall be stated in the schedule to this
3ndorsement. It shall end earlier i! and #hen the entire #or0s or parts thereo! are ta0en
into use by the insured.
Unit P 3nineerin Insurance
,1
P.K
A))*ICATION
OF
)RINCI)*ES
TO
ENGINEERING
INSURANCE
1. Ut3&t :&&'
4aitG
2 proposal
!orm has to be
completed and
submitted by
the insured !or
each class o!
enineerin
insurance. The
!orm
incorporates
usual
declarationsB
#arranties as
to the truth o!
the statements.
Thus it can be
said that the
principle o!
utmost ood
!aith is
obser$ed
under
enineerin
insurance.
Duty o!
utmost ood
!aith also
applies to the
proposer
#hen the ris0
is inspected
by the
enineer.
Proposer has
to
dec
lar
e
all
the
ma
teri
al
in!
or
ma
tio
n
at
the
tim
e
o!
ins
pec
tio
n.
8.
In!ra
Fle
intere
t
Ins
ur
abl
e
int
ere
st
ma
y
ari
se
in
se
$e
ral
#a
ys.
In contracts o!
ci$il
enineerin
#or0s
contractors
are held
responsible
!or the loss or
damae to the
#or0s until
they are
handed o$er
to the
principle.
Thus
contractors or
sub,
contractors
ha$e
insurable
interest and
can protect it
by a C2R
policy. In
practice"
policies are
issued in the
?oint names o!
t#o or more
parties such
asB
principlesBcon
tractors.
3. In'e3nity
3nineerin
policies are
contracts o!
indemnity. In
case o!
repairable
damaes"
repair cost
less sal$ae is
paid #hereas
!or total loss"
act
ua
l
$a
lu
e
o!
th
e
ite
m
pri
or
to
th
e
los
s
is
pa
ya
ble
les
s
sal
$a
e.
Th
es
e
po
lic
ies
are
su
b?e
ct
to
pr
o,
rat
a
co
nd
iti
on
o!
a$erae and
<excess<. Limit
o! indemnity
in case o! a
claim is the
sum insured
under the
policy.
Policies are
also sub?ect
to conditions
o!
<subroation<
and
<contribution<.
P.L SUMMARY
The construction
phase policies are
issued !or the
period o! the
pro?ect" that is" the
period or <one
time< policies"
#hereas the
operational
insurances are
annual policies
rene#able at
expiry. The
sub?ect matter o!
the construction
phase policies is
ci$il enineerin
#or0s under
Contractors 2ll,
Ris0 policies and
plant and
machinery etc.
durin erection
under 3rection
2ll,Ris0 policy.
These policies
pro$ide co$er on
<2ll,Ris0s< basis"
sub?ect to eneral
exclus
ions
and
!eatur
es
comm
on to
all
policie
s. 2ll
the
constr
uction
phase
policie
s
er
ma
teri
al
da
ma
es
to
the
sub
?ect
ma
tter
exc
ept
the
ad
$a
nce
d
los
s
o!
pro
!it
pol
icy
ich
is a
con
se*
uential loss
insurance.
proposal !orm is
compulsorily used
in all the
enineerin
policies. Details in
the proposal iurm
help insurers to
decide #hether
to accept the
proposal or not
and i! it is to be
ar
accepted" then the terms and conditions to be imposed can be decided. 2ll the principles
o! insurance are strictly applied to the enineerin policies. Pro,rata condition o! a$erae
and <excess< are also applicable.
Loss assessment under enineerin policies is assined to independent enineer sur$eyors.
%o#e$er" in relati$ely small losses the ser$ices o! company<s o#n enineers are utili&ed
!or the purpose.

..+ 0EY1ORDS
Centri4!:al
C&neT!ential *&
DeFri
Di3antlin:
Erecti&n
Ecalati&n
FrancGie
In'e3ni4y
O5erati&nal
)lant )r&5&al
F&r3
TGir' )arty *iaFility
Proceedin or actin in a direction a#ay !rom a centre or an
axis.
Remains o! somethin bro0en do#n or destroyed. )rec0ae"
remains.
To ta0e somethin apart so that it is in se$eral pieces.
To put up by the !ittin toether o! materials or part. Creation
or !ormation.
Pro$ision !or automatic increases on some de!ined basis in
premiums and sums insured.
Deductible in #hich the insurer has no liability i! the loss is
under a certain amount" but once this amount is exceeded>
the entire loss is paid in !ull.
Leal principle that speci!ies an insured should not collect
more than the actual cash $alue o! a loss but should be restored
to approximately the same !inancial position as existed be!ore
the loss.
Durin the #or0in o! the system or machine.
2 lare !actory #here an industrial process happens.
It is a !orm #hich is to be completed !or securin an insurance
policy.
Liability incurred by the insured to another party but excludin
contractual liability.
.., SE*F6ASSESSMENT 7UESTIONS

s in H1. )rite do#n the main pro$isions o! (arine,cum,3rection policy.
H1. Describe the scope or co$erae under Contractor<s 2ll,Ris0 and Contractor<s Plant and
(achinery Policy.
HC. Discuss the extension o! co$er a$ailable under 3rection 2ll Ris0 insurance.
H5. 3xplain the principle o! indemnity and limits to insurers< liability" #ith re!erence to
enineerin insurance.
HK. )hat is the ob?ect o! an ad$anced loss o! pro!it policy'
HL. Name the di!!erent construction phase policies and operational phase policies.
H6. .tate #hether True or /alse@
a. C2R Co$er plant and machinery o! contractor.
b. /lood is not co$ered under C2R policy.
c. (aximum 3scalation pro$ision under (C3 policy #ill be K7E o! basic .um
Insured.
d. 2d$anced Loss o! pro!it policy co$ers material damae to Plant and (achinery.
e. )here the sum insured !or construction plant and machinery exceeds K E o!
the sum insured or Rs. 1K77777B, 9#B1: same can not be co$ered under a
3
2
R
policy.
!. )ar and allied perils is an exclusion under 3rection all ris0 policy.
. (achinery brea0do#n is a construction phase policy.

SUect
"tored
ited be!ore
urance
.eludin
h.
HP. (atch the !ollo#in@
570) 2d$anced loss o! pro!it 9:
571) 32R policy extension 9:
572) (arine Rates 9:
573) (achinery brea0do#n 9:
574) C2R policy 9:
575) Natural calamity 9:
576) 3scalation pro$ision
577) Conse*uential loss policy
578) Operational phase
579) Construction phase
580) /lood and inundation
581) Non,tari!!
C2R policy can be issued in the ?oint names o! principleBcontractor
NOTES
" NC3 , II
OFIective
2!ter completin this unit" you #ill be able to@
G explain #hy boiler explosion is not co$ered under the
standard !ire and special perils policy.
G sho# the importance o! maintenance contract under the
electronic e*uipment policy.
G discuss the scope o! machinery brea0do#n insurance. G
list the ratin !actors o! machinery brea0do#n policy.
G #rite the exclusions under the contractors< plant and
machinery policy.
cd identi!y the policy #hich co$ers loss o! pro!it a!ter material
damae to the machinery.
Str!ct!re
582) Introduction
583) Types o! Policies
584) .cope o! Co$er
585) .ummary
586) =ey#ords
587) .el!,assessment Huestions
1/.1 INTRODUCTION
2!ter the Industrial Re$olution" lare premises #ere erected by manu!acturers as ne#
machines could produce lare *uantities o! oods more cheaply usin the same #or0!orce
control and maintenance o! boilers" enines" machines and premises rested #ith the
manu!acturers #ho naturally #anted insurance to protect their in$estment. 3nineerin
insurers thus set themsel$es up to #rite insurance on boiler explosion" collapse o! steam
pressure plant and machinery brea0do#n etc. Operational phase policies li0e machinery
brea0do#n" boilers and pressure $essels" electronic e*uipment policies" etc. ha$e common
!eatures relatin to eneral exclusions" conditions" claims procedure" basis o! !ixin sum
insured etc.
1/.8 TY)ES OF )O*ICIES ___________________________________________
a. (achinery brea0do#n
b. +oiler 3xplosion
c. Contractors plant and machinery
d. 3lectronic e*uipment
e. Deterioration o! stoc0
!. (achinery loss o! pro!it
1/.3 SCO)E OF )O*ICIES
)e ha$e already discussed the scope o! co$er under construction phase policies in unit P.
)e shall see in detail scope o! co$er under operation phase policies in this unit.
A. MAC%INERY "REA0DO1N
(achinery insurance #as de$eloped to rant e!!ecti$e insurance co$er !or plant and
machinery in industrial premises. Primary intention o! the co$er is to protect the insured
aainst the !inancial ris0 o! sudden and un!oreseen damaes to plant and machinery.
CO-ER
The policy o!!ers co$er due to all 0inds o!< accidental< electrical and mechanical brea0do#n
due to internal and external causes. Co$er is ranted durin the time machine is in operation
or rest or in process o! dismantlin and o$erhaul or durin subse*uent re,erection at the
same premises.
Unit 17 3nineerin Insurance , II
Internal Ca!e
1. Damae due to !aulty material.
E>ternal Ca!e
1. Lac0 o! s0ill in operation by )or0ersB
operators.
588) De!ects in castin" !aulty construction. 1.
Carelessness"nelience"maliciousact.
589) O$erheatin o! parts. C. 3ntry o!
!orein bodies.
590) .hort circuits Y .hort circuits resultin. 5. 3lectrical o$er,pressure in to !ire
K. /aults in erection resultin into
damaes.
L. /allin +odies to centri!ual !orce.
E@C*USIONS
591) /ailure o! other connected
machinery
durin operation.
592) /ailure o! operation o! sa!ety
de$ices.
593) /e# items ha$e a short ser$ice li!e compared to the plant as a #hole. /or
example"
all types o! exchaneable tools li0e dies" moulds" enra$ed cylinders.
594) Parts #hich by their use or nature su!!er hih rate o! #ear Y tear !or example"
re!ractory
linins" crushin hammers.
595) Loss o! damae to belts" ropes" chains" rubber tyres" blades" cutters" 0ni$es"
ob?ects
made o! lass" porcelain" ceramics" all operatin media 9e.. Lubricatin oil" !uel"
catalyst" re!rierator" do#therm: !elts" endless con$eyor belts" or #ires" sie$es" !abrics"
heat resistin and anti,corrosi$e linin and parts o! similar nature. Pac0in material
parts not made o! metal 9except insulatin material: and non,metallic linin or coatin
o! metal parts.
596) Damae due to any cause !or #hich the manu!acturer" supplier responsible.
597) )ar and similar ris0s.
598) O$erloadin experiments and tests re*uirin abnormal condition.
3!!ects due to continuous use" radually de$elopin crac0" de!ects" corrosion etc. P
)ill!ul act or ross nelience o! insured o! his responsible representati$e.
De!ect existin at the time o! ta0in our insurance 0no#n to insured but no# 0no#n
to the insurers.
599) /lood" inundation" 2ct o! od perils etc.
600) 2ny type o! conse*uential loss.
SUM INSURED
The sum insured o! each item o! machinery must be its present day replacement $alue o!
similar ne# machine includin therein all incidental expenses li0e duties" taxes" excise"
!reiht" insurance" handlin etc. I! the sum insured is not as de!ined abo$e" then in the e$ent
o! claim condition or a$erae is applied !or settlement o! the claim.
)ERIOD OF INSURANCE
(achinery +rea0do#n Policy is usually issued !or a period o! 11 calendar months 9premium
rate is usually annual:. I! anyone desires shorter period than 11 months short period rates
as per tari!! are applicable.
"ASIS OF INDEMNITY
The indemnity is normally by #ay o! payment o! expenses re*uired !or the repair o! damae
or in rare cases directly by replacement o! the damaed item. The repair expenses include
mainly the repair cost includin spares cost" dismantlin and re,erection cost" ordinary
!reiht chares" expenses !or employment o! specialists etc. In case the expenses !or repairs
exceed the $alue o! the machine the indemnity #ould be as per the pro$isions !or 4TOT2L
LO..4 i.e. based on the mar0et $alue o! the item on the day #hen the loss occurred.
E@CESS
/rom each and e$ery claim insured is re*uired to share the loss upto the amount !ixed as
deductible !ranchise or excess. /or hiher excess selected by the insured" certain discount
is allo#ed in the premium. Deductible !ranchiseBexcess is di!!erent !or each item o! machine
co$ered and is !ixed considerin the loss potential.
.. E@TENSION OF RIS0:
601)Damae to /oundation o! (achinery
602)3xpress !reiht" holiday rates" o$ertime chares in the e$ent o! claim.
603)Third party Liability 9includin bodily in?ury and property damae.:
GENERA* INSTRUCTION
1. +e!ore ratin" it is necessary to collect !un name plate details o! the machine i.e. %PB
=)IP.IB=;2BRP(" manu!acturer<s name" type" year o! manu!acture" .erialNumber
and such other identi!ication details. In 3nineerin operational insurance Policies
speci!ic machines only are insured and as such abo$e identi!ication details are a <must<
be!ore areein to i$e co$er. /ull name plate details o! the machines should !orm a
part o! the policy as #ell" and should be incorporated in the in$entory.
604) 3$ery ris0 should be accepted a!ter satis!actory inspection.
605) (achines #hich are under erection or testin and commissionin should be
insured
only a!ter success!ul commissionin.
606) (achinery" e*uipments installed in petro,chemical plants" re!ineries and !ertili&er
plants
should be accepted only a!ter inspection.
s
Critical machineries #hich are in operation !or more than 17 years li0e D.8BT.8.
sets" turbines" hih pressure compressors" cement mill e*uipments" ball mills" rollin
mill dri$e" !urnace trans!ormers" lass lined $essels" etc. should be inspected be!ore
acceptance irrespecti$e o! .um Insured.
L" Items #hich are not speci!ied in this Tari!! are rated pro$isionally at minimum rate o!
1.77E and a re!erence is to be made to %ead O!!ice !or obtainin !inal rate !rom
T28.
No (achinery insurance Policy should be issued to co$er 3lectronic 3*uipments
such as Computers" (edical and +iomedical e*uipments" (icroprocessors" 2udio
$isual e*uipments. These e*uipments are to be co$ered only under 3lectronic
3*uipment insurance Policy.
N. Portable Y (obile e*uipment are not co$ered (.+. Policy.
1$. SE*ECTION OF MAC%INES:
.election o! machines by the insured should be a$oided. It should be compulsory !or the
Insured to insure all the machines that are in the !actory except those #hich are declared
as 4declined machines4 in the tari!!. In cases #here !or practical reasons" it becomes
necessary to i$e co$er !or a section o! the plant or #or0shop. Inspection by the 3nineer
should be arraned and the *uotation i$en in consultation #ith him.
1K. .U( INSURED 6 )RESENT DAY RE)*ACEMENT -A*UE :
+e!ore applyin the tari!!" the $aluation o! machines should be chec0ed indi$idually to
ensure that the same represents the present day replacement $alue o! an identical machine
i! purchased ne#. I! the $aluation does not represent so" the $alue should !irst be corrected
to the present day replacement $alue and tari!! applied on such $alue !or purpose o!
*uotation. The sum insured should include 8I/ $alue plus duties i! any" inland transit chares"
erection chares" etc.
1(. INSURANCE OF FOUNDATIONS:
4/oundation4 o! machines are not ta0en into account #hile !ormulatin the tari!!s as these
are not ordinarily re*uired !or insurance. In cases #here the proposal speci!ically pro$ide
!or co$erin !oundation" it should be !irst chec0ed that the .um Insured includes the cost
o! !oundation and therea!ter tari!! applied on the total $alue inclusi$e o! !oundation.
1+. E@)RESS FREIG%T:
The tari!! do not pro$ide !or 3xpress /reiht. In cases #here the proposer re*uests !or
3xpress /reiht" an additional premium at an a$erae rate !or the policy should be chared
1,. AIRFREIG%T:
The tari!! do not pro$ide !or 2ir /reiht. In cases #here the proposer re*uests !or 2ir
/reiht" an additional premium at KE o! the sum insured selected !or 2ir /reiht should be
chared #ith D./. at KE o! claim amount on account o! 2ir /reiht.
1.. ADDITIONA* CUSTOMS DUTY:
The 2dditional Customs Duty can be co$ered on !ollo#in terms@
607) The co$er !or 2dditional Customs Duty #ill be on /irst Loss +asis.
608) The speci!ic limit !or 2dditional Customs Duty has to be selected by the Insured at
the inception o! the policy and can be reinstated at the e$ent o! loss.
". "OI*ER E@)*OSION
+oiler and pressure $essel insurance is named peril policy and it co$ers only !ollo#in
perils@
i: 3xplosion ii: Collapse SU"<ECT
MATTER INSURED
1. 2ll the boilers" #hich are used !or industrial production or !or the po#er production
purposes.
Unit 17 En:ineerin: In!rance 6 II
1. )aste heat +oilersBReco$ery +oilers 9used in ChemicalBPetrochemicalBPaper (illB
Po#er PlantB.teel industry:.
i. /ired and Un!ired Pressure ;essel used in industry. .
Related pipelines. COP3 O/ CO;3R
he policy co$ers 3xplosion or collapse o! the insured boilers or other pressure $essels
Jsuitin in@
i Damae to the insured item itsel! 9other than by !ire:
B Damae to other surroundin property o! the insured 9other than by !ire:
i Liability !or Third Party Property damae and Bor !atal or non B!atal personal in?uries.
tie basic co$er under the +oiler policy is explosion or collapse resultin !rom its o#n
uernal #or0in. The ris0 o! external explosion 9ta0in place else#here in the $icinity:
!eelin the boiler is co$ered under a !ire policy. O#ners surroundin property and Third
irty liability are extensions to the basic co$er i.e. these ris0s can be co$ered at additional
@ emium. Ris0 o! explosion o! the insured<s o#n steam and other !luid pressure $essels is
real" #hich depends on the number o! machines at ris0 and their $alue and the li0elihood o!
imae is $ariable thus re*uires care!ul under#ritin. 2s such boiler explosion is co$ered
icier 3nineerin department and not under standard !ire and special perils policy.
IN.UR3D P2RTI
@c insured party can be o#ner o! the +oilerB)aste heat +oilerBPressure ;essel" or must
a party holdin boiler in trust" or ha$in !inancial interest in the boiler to be insured.
D3/INITION.
<+oiler< shall mean any !ired closed $essel or a combined container pipin system in
#hich steam is enerated underpressure.
<Pressure Plant <shall mean any un!ired closed container under steam as or !luid
nressure.
<3xplosion< shall mean the sudden and $iolent rendin or tearin apart o! the permanent
structure o! a boiler or pressure plant or any part or parts thereo! by !orce o! internal
*
steam as or !luid pressure causin bodily displacement o! the said structure and
accompanied by the !orcible e?ectment o! its contents.
609) <Collapse< shall mean the sudden and danerous distortion o! any part o! a boiler or
pressure plant by benchin or crushin caused by steam as or !luid pressure #hether
attended by rupture or not" it shall not mean any slo#ly de$elopin de!ormation due
to any cause.
610) </luid 8as 3xplosion< shall mean an explosion o! inited ases in the !urnace or !lues
o! the !urnace or !lues o! the boilers" economi&ers and super heaters.
611) <Chemical 3xplosion <shall mean an explosion arisin out o! chemical reaction in any
plant.
1ARRANTIES
The +oiler and Pressure ;essels are co$ered as per statutory reulations. The !ollo#in
#arranties are applied@
612)The boiler and pressure plants described in the .chedule are annually inspected by
inspectors appointed by the appropriate 8o$ernment except #here there is a statutory
re*uirement !or 8o$ernment Inspection" the inspections are to be carried out by an
independent competent person.
613)The boiler and pressure plant described in the schedule shall only be operated by
2ttendants holdin a $alid certi!icate o! competency issued under the appropriate
+oiler 2ct.
614)The insured shall be in possession o! the un*uali!ied permission in #ritin o! the
competent inspectin authority to operate the said boilers and pressure plant. I! the
maximum pressure o! load upon the sa!ety $al$e immediately prior to any explosion
or collapse #as in excess o! that stipulated by the said authority the insured shall not
be entitled to any compensation or indemnity under the Policy in respect o! such
explosion or collapse.
)ERI*S CO-ERED I
615)3xplosion
616)Collapse,implosion
617)/lue 8as 3xplosion
nit 17 3nineerin Insurance , II
GENERA* E@C*USIONS
JxplosionBCollapses due to !ollo#in@
O. /ire and allied perils. \
)ar and nuclear ris0.
C. Loss arisin out o! o$erload o! experiments or tests re*uirin imposition or abnormal
condition.
I" 8radually de$elopin !la#s" de!ects" crac0s" or partial !ractures.
K 8radually #earin a#ay o! parts resultin into lea0ae or corrosion or by the action
o! !uel" de$elopment o! crac0s" blisters" laminations" !la#s" !ractures" bulin
de!ormation unless it results in explosion or collapse.
:. /ailure o! Indi$idual tubes unless such de!ects result in explosion or collapse.
6. Loss or damae arisin out o! hydraulic tests or any other test speci!ied by statutory
inspectin authority.
P. Loss due to chemical explosion other than !uel as explosion.
N. )ill!ul act or ross nelience.
l:
. 3xplosionBCollapse due to !aults existin at the time o! commencin the insurance"
0no#n to the insured or his responsible representati$es.
2ny conse*uential loss resultin !rom 3xplosionBCollapse.
Loss due to manu!acturers B repairers responsibility. 11.
Contractual liability o! any 0ind.
SUM INSURED
i nc sum insured o! each item o! +oilerBPressure ;essel must be its present day replacement
$alue o! similar ne# boiler includin therein all incidental expenses li0e duties" taxes" excise"
!reiht" insurance" handlin etc. I! the sum insured is not as de!ined abo$e then in the e$ent
:! claim condition o! a$erae is applied !or the settlement o! the claim.
)ERIOD OF INSURANCE
+oiler 3xplosion Policy is usually issued !or a period o! 11 months 9premium rate is usually
annual:. I! anyone desires shorter period than 11 months special premium rates are chared"
called short period rates #hich are usually some percentae o! annual premium rate.
Clai3 Settle3ent
.pecial aspects that need attention are 1: #hether the loss !alls #ithin the de!inition o!
<3xplosion< or <collapse< 1: #hether the #arranties ha$e been complied #ith.
1 )artial *& "ai 9damaed machine repairable:
I! the damaed +oilerBPressure ;essel can be repaired then expenses incurred !or
repairsBreplacement o! spare parts #ithout deductin depreciation plus incidental
expenses li0e cost o! dismantlin" re,erection" !reiht" duty" taxes" insurance etc. to
the extent included in sum insured.
8 T&tal *& "ai
I! the damaed +oilerBPressure ;essel cannot be repaired and is completely destroyed
then the company #ill pay actual $alue o! the +oilerBPressure ;essel insured immediately
be!ore occurrence o! accidental expenses to the extent they are included in the sum
insured.
I! repair chares are more than actual $alue o! +oiler Pressure ;essel be!ore
occurrence o! loss then claim #ill be settled sub?ect to total loss basis.
DEDUCTI"*E FRANC%ISE
There is no deductible !ranchise applicable under the +oiler 3xplosion insurance Policy
RATING AND UNDER1RITING
The proposal !orm elicits !ull in!ormation o! the plant to be insured in addition to the other
usual details.
618)Description" ma0ers<s name" ma0er<s number" capacity and year o! ma0e.
619)%o# the boiler is !ired !or .e.. oil" as or coal
620))or0in pressure and maximum load on sa!ety $al$e.
621)Details o! past inspection.
622)Details o! boiler attendants
C. CONTRACTOR )*ANT P MAC%INERY KC)ME
623) <!ri'icti&n@ This applies to all ris0s located in India.
624) In!re'@ O#ner" operator" or hirer can be the insured.
625) Sc&5e &4 In!rance an' !55le3entary c&ver: The standard Contractors
Plant
and (achinery insurance introduced in the Indian mar0et co$ers material damae
!rom $ariety o! causes includin.
626) +urlary" the!t" riot and stri0e and malicious damae.
627) /ire and lihtnin" external explosion" earth*ua0e" !lood" inundation"
subsidence"
landslide and roc0slide.
628) .torm" tempest" hurricane" typhoon and tornado.
629) 2ccidental damae #hile at #or0 due to !ault" man handlin droppin o!
!allin"
collapse" collision and impact.
Note @
In respect o! machineryBe*uipments" #hether reistered #ith RTO or not" but enaed at
the pro?ect site" the insured has an option either to select the (otorBNon,(otor Policy
under (otor tari!! or CP( policy in enineerin Department.
3UT3N.ION.
u" Third Party personal in?ury and property ris0s up to the limit o! indemnity as may be
selected by the Insured.
9D: 3xpenses incurred !or o$ertime" express !reiht 9excludin air,!reiht:" holiday rates
o! #aes" etc.
Cost incurred in the clearance and remo$al o! debris !ollo#in an accident.
(.oss or damae to the existin surroundin property.
N&te :
Co$er applies #hen the insured item is
630)at rest
631)at #or0
632)bein dismantled !or cleanin or o$erhaulin or in the process o! these
operations
633)bein shi!ted #ithin premises or subse*uent re,erection.
634)e*uipment bein at location speci!ied in the
policy.
3xclusions and other exceptions@
The Principal exclusions are@
635)Loss or damae occurred by #ar" or #ar li0e operation" nuclear ris0s.
636)Loss or damae caused by #il!ul act or #il!ul nelience on the part o! the insured
or
his authori&ed representati$es.
637)Loss or damae due to electrical or mechanical brea0do#n or internal
explosions.
638)Loss or damae resultin !rom experiments or o$erload or similar test.
639)Loss or damae to exchaneable parts and tools such as belts" ropes" chains"
blades"
con$eyor belts and similar other parts.
640)Loss or damae to $ehicles licensed !or eneral road use.
641)Loss or damae due to total or partial immersion in tide #ater.
9h: Loss or damae to the %ull and (achinery o! #ater,borne $essels or cra!t>
ho#e$er this exclusion does not apply to the Contractors< Plant Y (achinery
mounted on such #ater,borne $essels or cra!ts !or the purpose o! use !or the
contract #or0s.
9i: Loss or damae durin transit !rom or pro?ect site to another.
9?: Loss or damae #hilst #or0in underround.
90: Loss or damae o! any 0ind o! conse*uential loss.
91:
3xcess
9m:
Loss
or
dama
e due
to
!aults
or
de!ect
s at
the
incepti
on o!
the
policy.
5.
(.
Snit 17 3nineerin Insurance , II
E>teni&n &4 C&ver:
t TGir' )arty *iaFility C&ver.
I OCner S!rr&!n'in: )r&5erty.
O Clearance P Re3&val &4 DeFri. 5:
A''iti&nal Rate 4&r EartGT!a9e )eril.
(rte @
(any a times Contractor<s plant" machinery Y e*uipment re*uire to be shi!ted !rom
one location 9Pro?ect site: to another location 9pro?ect site:. The ris0s durin transit
!rom one location to another location is outside the scope" should be co$ered
separately" it re*uired in the (arine Dept.
%o#e$er the ris0 durin shi!tin o! items o! Cont.<s Plant" (achy." Y 3*ps." in
connection #ith #or0 at a pro?ect site !rom one point o! the pro?ect site to another
point in the same pro?ect site" is deemed to be co$ered #ithin the rates prescribed in
Rate .chedule.
Loadin o! 17E on the basis o! CP( rate shall be chared to co$er /loater ris0.
.inle e*uipments exceedin Rs. K7 Lacs should be accepted only a!ter inspection.
Critical machinery Li0e Aumbo Driller" .ho$els" 3xca$ators" (obile Crane o! capacity
abo$e 17 tons should be inspected be!ore acceptance irrespecti$e o! sum insured.
2ll act o! 8od Perils other than 3arth*ua0e 9/ire and .hoc0: are ta0en care o! in the
rates prescribed in Table or Part I , Rate .chedule. %o#e$er" no reduction in the
rates can be allo#ed !or excludin any o! these perils.
)here policies are issued or rene#ed !or period shorter than 11 months" premium
shall be chared on short period scale.
.um In!re' an' avera:e :
in insured o! each indi$idual item must represent its current replacement $alue includin
.importation costs to site" customs dues and all installation costs.
"ASIS OF INDEMNITY
642)Partial loss@ In case o! partial loss" repair expenses plus cost o! dismantlin" re,erection
and ordinary !reiht shall be payable sub?ect to the deduction o! sal$ae under insurance
9i! any:" depreciation and excess.
643)Total loss@ In case o! total loss" insured #ill be entitled to recei$e actual $alue less
depreciation" sal$ae and under insurance 9i! any:.
D. E*ECTRONIC E7UI)MENTS )O*ICY
Electr&nic eT!i53ent in!rance i eentially an H accident insurance< on 42ll Ris04
basis !or electronic e*uipments. It thus co$ers lossBdamae #hich arise suddenly and
un!orseebly and materially a!!ect the sub?ect matter insured necessitatin repairsB
replacements. The losses co$ered are those #hich are not expressly excluded.
SU"<ECT MATTER
644)3lectronic data processin machine.
645)Telecommunication e*uipment.
646)Transmittin and recei$in installations Radio" T. ;. Cinema,sound reproduction and
studio e*uipment.
647)(aterial testin and research e*uipment.
648)3lectro (edical installations.
649).inal and Transmittin units.
6. O!!ice calculators" duplicatin machines and reproduction machines.
P" Control and super$isory units.
P. Industrial electronic e*uipment.
The term 3*uipment means the entire computer system consistin o! CPU 0eyboard9s:"
monitor9s:" Printer9s:" stabili&er9s:" ups etc. accordin to loadin and excess is applicable.
SCO)E OF CO-ER
Perils c&vere'
1. /ire" lihtnin and explosion" 9includin damae caused by !ire !ihtin measures:
implosion.
1" .mo0e" corrosi$e ases" smolderin" scorchin etc.
)ater and humidity" lea0in !luids and resultant corrosion.
650) (alicious act o! #or0men" employees Y third parties.
651) The!t burlary and other criminal o!!ences.
(\ Desin" manu!acturin" assembly and erection !aults" #or0shop errors" bad
#or0manship etc.
9i! these shortcomins sho# up durin operation and a!ter manu!acturers #arranty
has expired. .cope o! maintenance contract is necessary to chec0 #hether it is !ull or
partial:
Operator error" nelience and lac0 o! s0ill. .hort
circuitin and other electrical causes. P. Natural
%a&ards
The policy pro$ides co$er under C sections ,
.ection I (aterial damae co$er to the 3lectronic 3*uipment.
.ection II 3xternal Data (edia
section III Increased cost o! #or0in
)e shall no# study each o! these sections in detail.
.3CTION@ I
rial damae to hard#are is co$ered under the basic 3lectronic e*uipment insurance
y. %o#e$er as per recent uideline the policy #ould also co$er inbuilt system so!t#are
niout any separate brea0up o! .um Insured.
INSURED )ARTY
3lectronic 3*uipment Insurance can be i$en to any party #ho may be either o#ner"
lessor or hirer. 9Responsible throuh areement:. The co$er is ranted a!ter studyin the
conditions o! ser$ices contract and !ixin the responsibility and liability in each case.
E@C*UDED )ERI*S
652)Normal #ear and tear and corrosion o! parts arisin !rom use and continuous operation
9Limited to parts immediately e!!ected" subse*uent damae to other parts o! the unit
co$ered:
653))ill!ul act or #ill!ul nelience o! the insured or his representati$es.
654)/aults !or #hich Third Party is responsible by la# or contract.
655)/ailure due to interruption o! as" #ater or po#er supply.
656)2esthetic de!ects.
657)Conse*uential loss o! any 0ind.
658)(alicious damae by #or0men and burlary ris0.
659)loss o! or damae to the property co$ered under this policy !allin under the terms o!
maintenance areement.
SUM INSURED
The .um Insured must be the present day replacement $alue o! similar ne# 3lectronic
3*uipment includin there in all incidental expenses li0e cost o! erection" duty" !reiht"
taxes etc.
)REMIUM RATE :
S.I. !5t& R. 1 lac KET!i53entE
660)P.C... !or personal use #ith or #ithout ser$ice contract
661)Other e*uipment and PC. !or commercial use
#ith ser$ice contract
662)Other e*uipment and PC. #ithout ser$ice contract
S.I. AF&ve R. 1 *ac KET!i53entE
Rate
1.77E
1.77E
1.K7E
663) )ith ser$ice Contract
664) )ithout .er$ice Contract
1.77E
1.77 E
N.+.@ The Loadin in Premium may be Deleted Pro$ided Competent Inhouse (aintenance
/acility is 2$ailable 3xcept (edical 3*uipment. 92s Per Re$ised 8uideline:
I! the e*uipment #hich are co$ered under 331 policy Y also co$ered under /ire policy
than" 17E Discount o! the applicable 331 rate i! co$ered in both the policy but #ithout
.T/I or R.(TD than 6.K7PL discount and co$ered in both the policy #ithout .T/I Y
R.(TD than KE discount is applicable.
CL2I( SETT*EMENT
The claim is payable as under@
1. Partial Loss@ I! 3*uipment is repairable then ,
a. The !ull cost or replacement o! part damaed #ithout deductin depreciation.
b. Incidental expenses li0e cost o! dismantlin" re,erection" !reiht" taxes etc.
1" Total Loss@ I! 3lectronic 3*uipment Unit is totally damaed to such an extent that the
cost o! repairs more than the actual $alue o! 3lectronic 3*uipment Unit immediately
be!ore the accident.
/ull insured $alue less depreciation !or the period it #as in use.
/or each and e$ery claim the Deductible /ranchise and the sal$ae $alue #ill be deducted.
it the sum insured o! 3lectronic 3*uipment Unit does not represent its present day
replacement cost the claim #ill be settled a!ter applyin condition o! a$erae.
.3CTION: II 6 E@TERNA* DATA MEDIA
.ection I co$ers only the material damae to the hard#are o! the e*uipment. .ection II
co$ers the cost o! external data media 9Punch Cards" Paper Tapes" (anetic Tapes" Disc
etc.: as also the cost o! reconstruction o! data on this external data media only i! damaed
due to indemni!iable peril.
SUM INSURED
665)Cost o! replacement as on date o! loss !or data media.
666)Cost o! reeneration o! the lost data.
N&te :
The claim under .ection II is payable only i! the claim is admissible under .ection,1.
E>cl!i&n:
+esides eneral exclusions" !ollo#in speci!ic exclusions apply under this section.
667)The excess to be borne by the insured in any one occurrence.
668)2ny cost arisin out o! !alse prorammin" punchin" labelin or insertin" inad$ertent
cancelin o! in!ormation or discardin o! data media and !rom loss o! in!ormation
caused by manetic !ields.
"ai &4 in'e3nity:
The indemnity o! the damaed data media !ollo#s the pattern o! basic insurance co$er .i.e.
on the basis o! expenses incurred sub?ect to deduction o! depreciation and excess. The
cost o! reeneration o! lost data is admissible only i! incurred #ithin 11 months o! occurrence.
The sum insured has to be reinstated !or the balance period o! insurance.
SECTION III 6 INCREASED COST OF 1OR0ING :
Under this section only the additional costs and expenses incurred" durin the period that
the insured 3lectronic 3*uipment is inoperati$e as a result o! material damae" to continue
the data processin and maintain the company in operation. The additional costs can result
!rom
Rentin o! the e*uipment
2dditional o$ertime or extra shi!ts on ones o#n e*uipment.
S!3 In!re'
.um Insured shall be the amount #hich the insured #ould ha$e to pay as additional
expenditure !or 11 months use o! substitute 3DP e*uipment o! similar per!ormance to the
3DP 3*uipment insured. The sum insured o! similar per!ormance o! the amount areed
per day and per month.
ional The insurer can reimburse !or personal expenses and costs !or transportation o! materials
!ollo#in upon any e$ent i$in rise to claim pro$ided separate sum ha$e been !ixed !or
the same.
In'e3nity )eri&'
Indemnity period is the period #hich starts on the date substituted e*uipment is put to use
and ends #hen the insured e*uipment is started to be used. The indemnity period should
be selected in such a #ay that in the e$ent o! #orst calamity the maximum time ta0en to
repair the e*uipment should not exceed the indemnity period.
E@C*
USION
S
O:
Time
excess
I
n
s
u
re
rs
ar
e
n
ot
li
a
bl
e
!
o
r
th
e
amount o! loss arisin durin the time excess. .uch time excess to commence !rom
the beinnin o! the interruption or inter!erence #ith the business resultin in a
claim under the policy. (inimum time excess #ill be 5 days.
1
: Cost o! replacement o! data media" data and reeneration o! data.
9
C: Costs arisin !rom circumstances not necessarily connected to the material damae.
In particular" costs arisin out o! bodily in?ury" orders or measures imposed by public
authority" delays as a result o! expansion" lac0 o! !unds etc.
Note@
;alidity o! existence o! (aintenance contract should $eri!ied prior to acceptance o!
proposal.
1. 2ll 3lectro (edical e*uipments should be accepted a!ter inspection irrespecti$e o!
sum insured.
Co$erae aainst restoration o! data under .ection II only to be ranted i! bac0 up
system is a$ailable.
Policy is sub?ect to discount in rate !or hiher excess and !or deletion o! !ire and allied
perils.
/or application o! excess term 4 3*uipment4 means entire system consistin o! CPU
0ey board9s:" stabili&ers" printers" UP. etc.
Only stationary e*uipments can be insured. No portable e*uipment to be insured.
Activity A :
a: (ention the eneral exclusions #hich are applicable to the electronic e*uipment policy.
b: /rom the scope o! co$er under .ections I" II Y %I" note do#n the speci!ic exclusions
applicable to each section.
E. DETERIORATION OF STOC0 INSURANCE
The policy is a !orm o! conse*uential loss co$er ranted !or stoc0s contained in lare cold
stores. The co$er is aainst the ris0 o! deterioration and contamination !ollo#in brea0do#n
o! the re!rieration plant and machinery !or #hich claim is admissible under (achinery
+rea0do#n policy. The $alue o! !ood depends on the e!!icient operation o! mechanical
and electrical apparatus. /ailin #hich the stoc0 o! !ood #ould contaminate or deteriorate.
There!ore these stoc0s are i$en co$er under the enineerin policy.
.COP3 O/ CO;3R@ Loss or damae causes by
1: Rise in the temperature resultin !rom the brea0do#n o! re!rieration plant
and e*uipment at the premises or damae to the said plant and e*uipment by an
accidental
cause.
1: 2ction o! re!rierant escapin !rom the plant and e*uipment.
3UCLU.ION.@ /ire" lihtnin" extinuishin o! !ire or subse*uent dismantlin" chemical
explosion" the!t" collapse o! buildin" subsidence landslide" #ater #hich escapes !rom
#ater containin apparatus" !lood" storm" and other 2cts o! 8od peril.
Unit 17 En:ineerin: In!rance 6 II
A( IN.UR3D@ The sum insured should represent the maximum $alue o! stoc0s in the
cold storae at any one time durin the currency o! the policy. This is important as these
policies are sub?ect to condition o! a$erae.
+2.I. O/ IND3(NI/IC2TION@ The liability o! the insurer is limited to the mar0et
$alue o! the commodities immediately be!ore the accident. In any e$ent the total liability o!
the company #ill not exceed the sum insured under the policy.
. DC3..@ Li0e most other 3nineerin policies" Deterioration o! stoc0 policies are also
sub?ect to excess in respect o! each and e$ery claim.
0 MAC%INERY *OSS OF )ROFIT
)hereas the (achinery insurance or the +oiler and Pressure plant insurance policies
indemni!y an insured aainst material damae resultin !rom brea0do#n and or explosion
h damae may also result in business interruption at the insured<s premises. In case o!
@ ?a0do#n o! machinery the manu!acturer #ill not be able to ma0e a pro!it ho#e$er he
DD ill be incurrin expenses 0no#n as standin chares althouh he is no loner earnin
anythin. .uch losses are co$ered under this policy.
IND3(NITI
a: Loss o! net pro!it b: Insured standin chares c: Increases cost o! #or0in
(2T3RI2L DAMAGE )RO-ISION
There is a condition under the policy that the claim must !irst be admitted under the
. urrent material damae 9(achineryB+oiler: policy be!ore a claim becomes admissible
$r the Loss o! Pro!it policy.
INDEMNITY )ERIOD
policy indemni!ies the loss su!!ered durin the period o! interruption. It is there!ore
.Jssary to speci!y the period #hich is di!!erent !rom the policy period.
(sie@ The insured is allo#ed to select the 0ey items o! the plant !or co$erae.
policy is sub?ect to time exclusion i.e. indemnity period commences a!ter the expiry o!
me exclusion.
i insured shall be the ross pro!it i.e. net pro!it plus standin chares.
Activity " :
a: .tudy the scope o! co$er under the <(achinery +rea0do#n< policy and < (achinery
Loss o! Pro!it< policy.
b: Note do#n the reasons #hy a loss o! pro!it claim is admissible only #hen the claim
!or material damae is payable under <(achinery +rea0do#n< policy.
c: 2pplication o! principles o! insurance to construction phase policies and operational
phase policies has already been discussed in Unit P.
1/.$ SUMMARY
)ith the proress in industriali&ation" there is an on,oin process to build the necessary
in!rastructure comprisin o! $arious pro?ects. These pro?ects in$ol$e enormous amount o!
capital" human resources and technical expertise. 2ny physical loss to these pro?ects results
in !inancial loss o! anticipated income" third party liability etc. #hich a!!ects the o#ner"
!inancial institutions and the contractor. These losses are ta0en care by the 3nineerin
dept. in the !orm o! pro?ect insurance at the construction phase. .imilarly #ith the
industriali&ation" there is increase in the use o! machines in the industry. These machines
are exposed to accidental loss and there could also be third party liability. These losses are
ta0en care by the enineerin policies at the operational phase. Di!!erent enineerin policies
ha$e many common !eatures in terms o! co$erae" exclusions" !ixin o! sum insured" basis
%I 17 3nineerin Insurance , II
i"i indemni!ication" excess" claims procedure etc. 2ll principles o! insurance are strictly
annlicahle to 3nineerin insurance.
17.K =3I )ORD.
2ct o! 8od
+oilers
Conse*uential Loss
Corrosion
Depreciation
niemnity Period
Loss o! Pro!its
(aterial Damae
mlds
torchin
2ny accidental act #hich could not ha$e been pre$ented by
any amount o! human care and !ore thouht.
;essel or container #here steam is enerated. 3*uipment that
pro$ides hot #ater.
The action" process or e!!ect o! radual #earin a#ay o! metal
by chemical reaction .molderin , abla&e.
2 decrease in the $alue o! property o$er a period o! time due
to #ear and tear or obsolescence. Depreciation is used to
determine the actual cash $alue o! property at time o! loss.
The period" beinnin #ith the date o! the damae" durin
#hich the turno$er o! the business is a!!ected by the damae.
It lasts until the turno$er reco$ers and reaches the point at
#hich it #ould ha$e been had the loss not occurred" or the
expiry o! the maximum indemnity period ,the number o! months
selected by the insured ,#hiche$er occurs !irst.
2 synonym !or business interruption insurance.
The policy co$erin damae to property 9usually a commercial
!ire policy: as the result o! #hich damae a business
interruption claim may result. It is a condition o! business
interruption insurance that a material damae policy must be
and remain in !orce.
2 container used to ma0e somethin in a particular shape.
+urnin so as to produce a chane in colour and texture"
roastin.
Stan'in: CGar:e
T&tal *&
3xpenses #hich still ha$e to be met e$en i! a business cannot
earn its !ull income o#in to !ire or other damaes. These
expenses do not diminish proportionately as a result o! the
damae.
The complete loss or destruction o! all the property insured
under a particular policy.
1/.( SE*F6ASSESSMENT 7UESTIONS
H1. Describe the scope o! co$er and exclusions under the (achinery +rea0do#n policy.
H1. )hat are the internal and external causes co$ered under the (achinery +rea0do#n
policy'
HC. Discuss in detail the 3lectronic 3*uipment Policy.
H5. )hy is deterioration o! stoc0 an enineerin insurance'
HK. )hat is the di!!erence bet#een <excess< and <time excess< '. 3xplain <time excess<
as an exclusion under the 3lectronic 3*uipment policy.
HL. )hat is the scope o! co$er under .ection II o! 3lectronic 3*uipment policy' H6.
.tate #hether True or /alse@
a.. Under the (achinery +rea0do#n policy" $aluation o! the machine should be
at the present replacement $alue o! an identical machine.
b. No short period policy can be issued !or boiler explosion.
c. Photostat machine is co$ered under 33I policy.
d. 2ll enineerin policies are co$ered by tari!!.
e. Co$er !or o#ners surroundin property is a$ailable as an extension under +oiler
explosion policy.
!. 3lectronic 3*uipment is an <2ll,Ris0 <policy.
. Premium rate !or personal computers" #ith or #ithout a maintenance contract.
is the same.
11.1 INTRODUCTION
The social" economic and en$ironmental chanes a!ter )orld )ar II" li0e the ha&ard to li!e
and property" a$e rise to (iscellaneous Insurance. It deals #ith co$ers #hich are not
traditionally handled by the !ire" marine and motor department.
The complexity o! ris0s in today<s industrial" commercial and public en$ironment resulted
in sini!icant chanes and introduction o! ne# o$eraes li0e oil" space" computer and bio,
technoloies.
The ne# concept o! pac0ae i.e. many co$ers under a sinle policy ha$e been introduced
and is $ery popular and much in demand. In this #e ha$e some co$ers are o$erned by
tari!!" some are sub?ect to mar0et areements and the rest are le!t to the discretion o! the
insurers. The potential o! miscellaneous insurance is $ery $ast in this country"
No# #e #ill see that all misc. properties $i&. money" plate" lass" cattle" poultry" tele$ision"
;CR" baae" shop0eepers" householders" pedal cycle" hut insurance" aricultural Y
domestic pump set" #ind mills" LP8 as cylinder" Ae#eler<s bloc0 can be insured under
misc. Insurance. Common policies are burlary business premises" all,ris0" money,in,
transit" shop0eepers and householders< policy. The common policies o! miscellaneous
departments are describes as !ollo#s@
11.8 SCO)E AND CO-ERAGE OF A**6RIS0 INSURANCE _____________
Sc&5e an' C&vera:e@ This insurance policy pro$ides co$er aainst loss or damae due
to /ire" The!t or 2ccident !rom any /ortuitous cause" any#here in India. The company #ill
pay or ma0e ood to the insured such a loss to the extent o! intrinsic $alue o! the property
so lost or damaed.
)r&5erty c&ver @ 8old and .il$er Ornaments" Ae#ellery" )atches" Cameras" curios"
anti*ue" #or0 o! arts" paintin and other $aluables.
E>cl!i&n
The insurance Policy does not co$er@
669)Loss or damae arisin !rom )ar,li0e operations" Ci$il Commotion"
670)Depreciation" #ear and tear.
671)(ilde#" $ermin" the process o! cleanin" dyein" repairin"
Unit 11 (iscellaneous Insurance
d: O$er, #indin o! cloc0s and #atches" mechanical deranement" electrical brea0do#n.
c: +rea0ae o! lass" China and articles o! brittle nature"
The!t !rom unattended $ehicles" detention or con!iscation by Customs or other
2uthorities and conse*uential loss.
Detention or con!iscation by Customs or other 2uthorities and conse*uential loss.
) (oney" .ecurities" (anuscript" Deed +onds" +ills o! 3xchane" Promissory notes"
.toc0 or .hares Certi!icates" .tamps" +usiness boo0s and documents" articles
despatched under contract o! a!!reihtment.
Note@ +eyond Indian territories" it is possible to rant co$er #ith speci!ic description o!
the territory by appropriate ratin.
Rates@ +ein non,tari!! co$er acceptance o! ris0 is at the description o! insured. Ratin
there!ore $aries !rom 1 E to 1.K7E. The premium may be loaded loo0in to merit o! each
case.
The sum insured is !ixed in case o! paintins" #or0 o! arts" curios" and anti*ue a!ter obtainin
$aluation report !rom the pro!essional expert.
In case o! Ae#ellery in ban0 loc0ers premium rate may be reduced Y 1 st loss basis policy
can be considered.
.pecial c&n'iti&n
)here any item insured hereunder consists o! articles in pair or set" the company<s liability
in respect there o! shall not exceed the $alue o! any particular parts #hich may be lost or
damaed #ithout re!erence to any special $alue #hich such article or articles may ha$e as
part o! such pair or set more than a proportionate par o! the insured $alue o! the set or
pair.
(inimum Premium and ser$ice tax applicable as per tari!!.
& Activity A:
(r. (ehra is a share bro0er #ho #ants to co$er his $aluable documents. )rite do#n
your $ie#s #hether you #ill o!!er any co$er to protect his documents'
11.# SCOPE AN$ CO!ERAGE OF %URGLAR&
)e shall no# see one more policy to co$er %ousebrea0in.
Sc&5e &4 c&ver
672)The Policy co$ers aainst loss or damae by +urlary" %ousebrea0in that is" the!t"
!ollo#in upon actual" !orcible Y $iolent entry o! andBor exit !rom the premises includin
the %oldup ris0.
673)Damae caused to the premises !ollo#in upon entry as abo$e or any attempt thereat.
674)I! the sa!e is o! an appro$ed ma0e" desin and burlar proo! and cash is secured in
sa!e" then only cash is co$ered sub?ect to !ollo#in t#o clauses.
i: =ey clause@ I! the cash is lost !rom sa!e #ith the use o! 0ey or duplicate 0ey
belonin to the insured is not co$ered unless it is obtained by $iolence and
!orce.
ii: 2 complete list o! such cash in sa!e must be 0ept separately in some secure
place and in case o! loss the liability is limited to such amount only.
)r&5erty c&vere':
Contents o! o!!ices" #arehouses" shops" odo#ns etc. and cash in sa!es or in the stron
room.
E>cl!i&n:
a: The Policy does not co$er loss or damae arisin !rom #ar Y #ar,li0e operation"
riot and stri0es" or ci$il commotion.
675) Terrorist acti$ities" conclusion o! nature that is" earth*ua0es" $olcanic
eruptions"
cyclones or other con$ulsions o! nature.
676) Conse*uential loss by use o! the 0eys to the sa!e unless obtained by !orce or
threat"
caused by Insured<s employees or member o! the !amily.
677) )here there is in$ol$ement o! insured<s employees or member o! the !amily or
other
person la#!ully on the premises 9larceny or ordinary the!t is not co$ered:.
678) Loss insurable under !ire or plate lass policy.
Ratin:@ Non,tari!! dependin upon merit o! each case" rate belo# i$en are uideline
rate.
Rates 7.1KE to 7.K7E
.hops Y store ris0 7.K7E
Reduced rate to be chared !or stoc0 in bul0 #ith lare .um insured.
+usiness cash" $aluable in sa!e 7.K7E
+usiness cash" $aluable in stron Room o! +an0 7.11KE
2dditional premium to be chared !or co$erin Riot" stri0e Y terrorist ris0.
& Activity ":
(adhuri had 0ept her banles near the #indo# and had then !orotten about them. 2!ter
some time" she realised that they had been lost. Is this claim payable or not'
11.$ INTRODUCTION OF FIRST *OSS INSURANCE )O*ICY
%eope o! co$er@
n the e$ent o! the lesser probability o! total loss" a proposer may re*uest insurance !or a.
! o! total stoc0s so declared. .uch insurances are called 4partial $alue4 o! 4!irst loss4
nsurance. %ere insurers are #illin to accept deliberate under,insurance #ith a sum insured
Jased on the insured<s o#n estimate o! the maximum possible loss.
The Declared ;alue clause in the /irst Loss policies introduces a declared $alue into the
#ordin" but this declared $alue is not the sum insured. The sum insured is the insured<s
estimate o! the maximum loss li0ely to occur 9#hich is selected E o! !ull $alue: and this
sum insured is the limit o! insurers liability. The declared $alue should be the total $alue o!
the insured property and it is on this !iure that the premium is calculated. %o#e$er premium
is chared as E o! total stoc0s so declared based on selected E.
Condition o! partial a$erae" as under" #ill apply@
J It is hereby declared and areed that this policy is issued as the /irst Loss insurance
upto E o! the insured<s total stoc0s 9177E: as limits in the schedule attached to and
!ormin part o! the policy.
J It is !urther declared and areed that in the e$ent o! the total $alue o! stoc0s at ris0 at
the time o! loss be reater than the total $alue declared !or purposes o! this insurance
and incorporated in the schedule" the insured shall be considered as bein his o#n
insurer" !or the di!!erence" and shall bear a ratable share o! the loss accordinly.
43$ery item" i! more than one" o! the policy" shall be separately sub?ect to this condition.4
4.ub?ect other#ise to the terms" conditions and exceptions o! the policy.4 )r&5erty
c&vere': /irst loss policy may be issued only under the !ollo#in circumstances and
conditions@,
2cceptance should only be considered in the case o! the lare #arehouse and stores
#here the $alue o! stoc0 is considerable and #here the stoc0s in in$ol$ed are o! substantial
and bul0y nature" renderin total loss a remote possibility.
679)/or item #ise sum insured it should not be less than Rs. K lacs" 9applicable as per
tari!!:.
680).uch a policy may be considered only #here the total $alue o! stoc0s to be insured
exceeds" say Rs. 1K la0hs" 9as per tari!!: Lo#er sum may be considered i! the Di$isional
(anaer deems it !it considerin the nature o! oods.
681)No /irst Loss policy may be issued !or less than 1K E o! the total $alue o! the property
to be insured" #ithout the permission o! Reional O!!ice.
682)4Condition o! partial a$erae"B under insurance4 as per standard #ordins *uoted
abo$e.
Rate#
Rate to be chared as a percentae o! !ull $alue premium
Selecte' N &4 CGar:e N &4
4!ll val!e 5re3i!3
P7E
NKE 67E K7E
at
J @e $n
J Activity C:
)rite do#n t#o commodities to #hich the !irst loss policy can be issued" #ith reasons.

ores
intial
.toc0 Declarati&n )&licie:
i hese policies may be considered #here lare stoc0s #hich !luctuate throuhout the year"
> ire in$ol$ed. The sum insured is !ixed at the maximum $alue o! stoc0s #hich the insured
anticipates he #ill hold at any one time. This sum insured #ill represent the company<s
maximum liability and a deposit premium o! 177E o! the annual premium must be collected
at the beinnin o! the insurance on the sum insured.
(onthly declarations o! $alue are to be obtained !rom the insured and the <deposit< premium
has to be ad?usted accordinly at the end o! the policy period. (inimum o! CKE o! the
year<s premium on the sum insured #ould be retained by the Company reardless o! the
actual amount o! the ris0 by #ay o! declarations. There!ore ad?ustment o! premium at the
end o! the policy period must be made sub?ect to the retention o! this minimum premium.
Declarations should be made #ithin 15 days o! the last day o! each month in the e$ent o!
no declaration" the insured shall be deemed to ha$e declared the sum insured as the $alue
at ris0.
4!ll val!e c&ver
6KE
LKE
K7E
1KE
+asis o! $alue !or declaration shall be the cost price to the insured or mar0et $alue #hiche$er
is less and any claim under the insurance #ill be settled accordinly.
In the e$ent o! under,declaration prior to loss" condition o! a$erae #ill apply and the
claim reco$erable shall be reduced in such proportion as the amount o! the last declaration
bears to the amount that ouht to ha$e been declared.
I! the stoc0s are collecti$ely o! reater $alue than the sum insured" then the insured shall be
considered as his o#n insurer !or the di!!erence and shall bear a ratable proportion o! loss.
I! a loss is sustained" the sum insured is reduced to that extent" unless a pro,rata premium
is paid to reinstate the amount o! the loss.
2ll declaration policies must be made sub?ect to a special endorsement embodyin
4Conditions !or declaration policies4.
Premium]17.1E ..C. except Premium less than Rs. K7B,.
11.; INTRODUCTION OF )AC0AGE )O*ICIES _____________
A. %&!eG&l'erJ In!rance
This is a pac0ae type o! policy i.e. many co$ers under a sinle policy has been introduced.
)e shall no# see one o! the important policy" %ouseholder policy.
Rate per mile
Secti&n 61
683)+uildin o! class4 2 4construction
684)Contents@
Ris0 co$ered , /ire" lihtnin" explosion o! as in domestic appliances" riot and stri0es"
malicious damae" !lood" cyclones" earth*ua0es. Impact damae" aircra!t damae"
subsidence o! landslide burstin and o$er,!lo#in o! #ater tan0s" apparatus or pipes.
Secti&n 6 II
Ris0 co$ered@ +urlary %ousebrea0in larceny or the!t 9insurance on contents !or $alue
e*ui$alent to the $alue mentioned under .ection I+ abo$e:
.ue
Secti&n III KAll6Ri9E
Ris0 co$ered !or ?e#ellery and $aluable aainst loss or damae by accident" or mis!ortune
#hilst any#here in India.
Secti&n I- K)late GlaE
Ris0s co$ered@ /ixed plate lass aainst accident damae
Secti&n - K"rea9'&Cn &4 '&3etic a55lianceE
Ris0
co$ere
d@
Dama
e
caused
by
andBor
solely
due to
mecha
nical or
electric
al
brea0d
o#n o!
domest
ic
electric
al"
electro
nics or
mecha
nical
applian
ces"
apparat
us or
adet
s. .U( IN.UR3D should be present day replacement $alue o! similar ne# e*uipment.
3xcess
685) The Insured shall bear upon himsel! 1 E o! each domestic appliances separately
or
the sum o! Rs. 9as per tari!!: only #hiche$er is hiher o! each and e$ery loss or
damae in respect o! #hich a claim is admitted under the policy.
686) In case o! total loss" claims #ill be paid sub?ect to depreciation o! 17E per year
!rom
the date o! manu!acture. The maximum depreciation ho#e$er shall not exceed K7E
o! the sum insured.
.ection -I 9T;" -CR et etc.:
Ris0 co$ered as per .ection I Y 11 and accidental external means and mechanical or
electrical brea0do#n.
Leal liability upto Rs. 1K"7776, and damae to insured<s o#n property due to collapse
ol antenna uptoRs. C7776,
.ection -II K)e'al CycleE:
Ris0 co$ered" Loss or damae due to !ire" lihtnin" internal explosion" Riot and stri0e"
Terrorism" (alicious damae" earth*ua0e etc." /lood" cyclone etc." burlary" housebrea0in
or the!t andBor external accident.
..Gal liability sub?ect to limit o! Rs. 17776, 3xcess o! Rs. 176, !or each o#n damae
claim.
Secti&n -III K"a::a:eE:
Ris0 Co$ered@ Loss or damae to insured accompanied baae by accident or mis!ortune
#hilst the insured is tra$elin on tour or holiday any#here in India.
Secti&n I@ K)A In!ranceE:
Please re!er P2 Insurance tari!! 2s per P2 Tari!!
Secti&n @
KAE )!Flic liaFility
687)Insured<s leal liability !or bodily in?ury or loss or damae to property o! third party
limited to amount speci!ied in the schedule
688))or0men compensation liability !or domestic ser$ant enaed in the insured premises
2s per ).C. Tari!!
Secti&n @I
Personal Computers@
Other termsBconditionsBexclusion as per Upto 1 lac ,
3lectronic e*uipment policy 2bo$e
Terr&ri3 C&ver KE>tra &5ti&nal 5re3i!3E: R.
The rates are chared as per tari!!.
Gr&!5 Dic&!nt:
)here more than 5 and upto L sections 9includin tari!! rated section: 1K E on Non tari!!
rates only.
)here more than L sections 9includin tari!! rated section: 17E on Non,tari!! rates only.
The policy does not co$er i%te, )-i), loss or damae by #ar" ci$il #ar" and the li0e"
depreciation" #ear and tear" conse*uential loss etc. and certain exclusion as per termsB
conditionsBclauses o! policy.
Unit 11 (iscellaneous
Insurance
Note @
689) .ection I+
is compulsory #ith
any tables i.e. total
C tables are
compulsory.
690) 2rt #or0"
sho#pieces
9!or hiher
$alue: may be
co$ered under
.ection I+ Y
11
pro$ided they
ha$e been
$alued by a
o$t. appro$ed
$aluer.
691) 3xcess@
KE o! each and
e$ery claim !or
2O8 Perils.
692) 1KE o! the
sum insured is
#ai$ed !or under
insurance !or
.ection I only.
693) 2. per
IRD2 9!rom
Aune 177C: the
insured can
co$er buildin
Y content on
!irst loss
basis sub?ect
to maximum
o! Rs. K7 lacs
!or contents Y
.ub?ect to
condition o!
a$e
ra
e.
.
e
l
e
c
t
e
d
E

o
!
!
u
ll
$
a
l
u
e
c
o
$
e
r
U
p
t
o
1
K
E

U
p
t
o
K
7
E

U
p
t
o
L
K
E

U
p
t
o
6
K
E

+
e
y
o
n
d

6
K
E
xdusio
n@
Charin E o!
!ull
$alue
premiu
m K7E
o! 7.K7
per
mile.
67Eo!
7. K7p
er mi l l
e
NKEo!
7. K7p
er mi l l
e
P7Eo!
7. K7p
er mi l l
e 7.K7
per
mille.
he policy does
not co$er inter,
alia" loss or
damae by #ar"
ci$il #ar and li0e
depreciation" ear
and tear"
conse*uential
loss etc. and
certain exclusion
as per
termsBconditionsB
clauses
9policy.
G 2cti$ity D@
hat
do
you
thin
0
#he
n
you
see
an
ad$e
rtise
men
t
abou
t
hous
ehol
der<s
insu
ranc
e on
the
le$isio
n'
fi
9+: S%O)0EE)ER INSURANCE
9.hop o#ned by insured:
.ection,1 Rate per mile
694)"!il'in: K&4 cla A c&ntr!cti&n &nlyE
695)CONTENTS KE>cl!'in: M&neyM-al!aFleE
N&te:
696)Total sum insured 9$alue at Ris0: under item 2 Y + should not exceed Rs. K7"77"777.
697)/ire Y 2llied perils co$ered .ection II@ +urlary and housebrea0in Insurance on
contents should be !or $alue e*ui$alent to the $alue the $alue o! I+ abo$e section.
Secti&n III: M&ney In!ranceA :
698)(oney in transit 9Not exceedin Rs 17"77"7776, per any one carryin
699)In sa!e 91E o! .A. under .ection 1 or K7"777B, #hiche$er is less.:
700)In tillBcounter 1 E o! the sum insured under .ection 1 or Rs. K7"777B, #hiche$er is
less
Secti&n I-: )e'al Cycle
Secti&n -:
)late :la 917E o! sum insured under .ection 1 or Rs. 1"77"7776, #hiche$er is less
Secti&n -IAA
Ne&nMGl&C i:n 9incl. the!t o! the #hole sin: 1E o!
..I. o! under .ection 1 or Rs. K7"7776, #hiche$er is less.
Secti&n -II: "a::a:e In!rance :
1E o! ..I. o! .ection 1 or Rs. K7"7776, #hiche$er is less
I.
.ection -III: )A 2s 5er )A
tari44 .ection I@: Fi'elity
G!arantee :
17E o! the ..I. Under .ection 1 or Rs. K"77"7776, #hiche$er is less.
.ection U@ Public liability
701) KE o! ..I. under .ection 1 or Rs. K7"7776, )hiche$er is less
702) )or0men compensation liability !or employee 2s per ).C.
tari!!
.ection UI@ +usiness Interruption Policy 9Loss o! Pro!it policy:
Description o! property 2s mentioned under .ection 1.
.um insured 2s in .ection I+.
Rates@ 2s in .ection I+.
Co$er a$ailable !or !resh as #ell a?s rene#al also.
Terrorism c&ver KE>tra &5ti&nal: Rates
applicable are as per tari!!. Perils c&vere':
/ire@
This
sectio
n
o!!ers
co$er
s
aain
st !ire
and
allied
perils
li0e
lihti
n"
explo
sion
due to
as
applia
nces"
bursti
n o!
#ater
tan0s
or
pipes"
riots
and
stri0e
s.
3$en
dama
es
due
to
earth
*ua0e
"
subsidence" storms and cyclone and other malicious acts are co$ered.
+urlary@ Co$er aainst loss and damae to the property in the premises due to
burlary idhousebrea0in.
(oney@ (oney in the cashier<s till or at the counter or in the sa!e Bsteel
cupboard" or #hilst bein carried toB!rom the ban0 aainst the!t" burlary and hold
up.
4edal cycle@ Damae or loss to pedal cycles and accessories includin public
liability o!
>
.s. 17"777B,
late 8lass@ In the business premises or the sho#, #indo#s aainst accidental
and B or (alicious brea0ae.

Ne&n i:n @ Insured aainst loss or damae due to accidents" !ire and allied perils" riots
and stri0es.
"a::a:e In!rance @ 2ainst the!t Baccident
)er&nal Acci'ent @ 2ccidental ris0 as per P. 2 Tari!!.
Fi'elity G!arantee @ Co$ered aainst !raud or dishonesty by employees.
)!Flic liaFility @ 2ccident to third party sub?ect to leal liability Bthrouh court.
"!ine Interr!5ti&n @ I! the claim is payable under section , 1 then loss o! pro!it B
incidental expenses as per LPO policy held co$ered.
N&te:
1 : Ris0 Y 8roup discount@ 2s per %ouseholder policy.
703).ection I+ Y II are compulsory ] any 1 tables" that is" a total o! !our tables are
compulsory.
704)I! insured ta0es LOP co$er 9.ection UII: then he has to ta0e .ection I Y II and any
t#o o! the remainin P sections. %e may opt LOP as one o! the remainin t#o 9that
is" a minimum o! 5 sections are re*uired to be co$ered to a$ail the policy.:
705)3xcess @ 2s per !ire policy under .ection I.
706)1KE o! the sum insured is #ai$ed !or under insurance !or .ection I only.
Activity E :
(r. Lai had ta0en a shop0eeper<s policy !or his rocery shop. %e then lost his cash as
#ell as bas o! rice and #heat. .tate the insurance company<s liability.
Jlots 9C: OFFICE )ROTECTION S%IE*D KGENERA* OFFICEE
No# let us loo0 a ne# policy #hich has been desined to o!!er insurance protection to
$arious items enerally !ound in o!!ices. The co$ers o!!ered are as under@
Please n&te tGat:
707) .ection 1 9buildin :and .ection 1 9contents: are compulsory !or o#ner
9buildin:
insured and section 1 9contents: !or Tenants 9+uildin: Insured
708) Insured has to OPT !or a minimum o! C sections other than minimum
compulsory
section prescribed abo$e 9a:.
.ection 1 6"!il'in:@ +uildin includin landlord<s !ixtures" !ittins" boundary #all and
!ences 9+uildin O#ners: 9the sum insured should represent the cost reinstatement as o!
the property:
Ris0 c&vere'@ 2s per /ire 2 Policy"
s"
.ection 1 , O44ice C&ntent@ /urniture" !ixtures" !ittins 9to the extent not insured under
section 91.:" electrical appliances" clothin" personal e!!ects o! insured or employees The
sum insured should represent !ull replacement $alue o! property by ne#.
Ris0s c&vere'@ 92s per .ection,1" includin +urlary" Robbery and Dacoity.
.ection C , TenantJ *iaFility @ Liability as a Tenant !or damae to o!!ice premises
includin !ixtures and !ittins
Ris0s co$ered@ 2s per .ection 1 92:
section 5 , M&ney In!rance@ Loss o! money #hile in transit" on the premises durin
?!!ice hours and in the sa!e a!ter o!!ice hours.
Ris0s co$ered@ 2ny accident andBor mis!ortune
3xclusion@ .hortae due to error" money entrusted to person other than insuredBemployee"
loss o! money !rom sa!e by duplicate 0eys.
iction K@ /ixed 8lass and .anitary /ittins includin damae to !rames.
r
ie $alue should represent the replacement cost o! property by ne# Ris0 co$ered
,cidentB+rea0ae.
Secti&n (@ /idelity 8uarantee 9On amount o! uarantee: o! any salaried person employed
by insured.
Ri9 c&vere'@ The pecuniary loss caused by !raud andBor dishonest acts. In addition"
Rs. 17 per capita #ill be chared !or total number o! people !or #hom the uarantee is
souht.
Secti&n +: Electr&nic ET!i53ent , The $alue o! electronic e*uipment should be o! a
replacement $alue by a ne# one o! the same 0ind" inclusi$e o! !reiht" custom duty and
other chares and cost o! erection.
Ri9 c&vere'@ Un!oreseen sudden physical loss" loss or damae due to any cause other
than those speci!ically excluded.
E>cl!i&n@ Pre,existin !ault or de!ects" #ear and tear" loss due to climatic conditions"
maintenance cost" loss or damae !or #hich insured is contractually liable" de!ects or
desin or materials !or #hich suppliers are responsible. 3xcess as per 3lectronic 3*uipment
Policy
Secti&n ,: Reintate3ent &4 Data an' )r&:ra33e: 2$ailable only i! section 6 is
insured. Please note that only standard prorammes #hich can be exchaned by user
co$ered under this policy.
Ri9 c&vere' @ 2s per .ection 6
E>cl!i&n@ K E in each claim. Data carryin materials not stored as in ma0ers instructions"
erasure and corrupted !rom unidenti!iable occurrence" intrinsic $alue o! the data" cost
incurred !or !alse proramme or alteration o! proramme.
Secti&n .@ Portable Computer , The $alue o! portable computer should be replacement
$alue by ne# one o! same 0ind inclusi$e o! !reiht" custom duty and other chares and
cost o! erection.
Ri9 c&vere' @ 2s per .ection 6
Secti&n 1/@ 2dditional expenses o! Rent !or alternate accommodation@ i! premise occupied
is damaed and declared un!it !or occupation
Ri9 c&vere' @ as per .ection 12.
'1,
is
5
a ad
nent
" and
.ection 11@ Personal 2ccident Insurance !or sel! and employees 9Please note that the
ae limit !or the purpose o! this section is to 1N to 67 years:.
Ris0s co$ered @ Death" Permanent total or partial disablement" and Temporary total
disablement due to accident Table 2 9III:
Rates" as per tari!!.
.ection 11@ +rea0do#n o! o!!ice appliances" and electrical and mechanical adets the
$alue o! portable computer should be replacement $alue by ne# one o! same 0ind inclusi$e
O<!reiht" custom duty and other chares and cost o! erection.
Ris0s co$ered@ 3lectrical and mechanical brea0do#n.
.ection 1C +aae@ Loss or damae to baae belonin to sel! andBor employees
#hilst on a ?ourney any#here in the #orld. The limit is one e$ent per person and #ith a
duration o! one year !or all the people.
Ris0s co$ered@ 2ny accident andBor mis!ortune.
.ection 15@ Liability Insurance
;: Public liability
>i )or0man<s Compensation e as per ).C. Tari!!
Ris0 Co$ered @ Death or bodily in?ury andBor damae to property o! third party and
ability #or0ers. Nelience o! sel! andBor any !amily members permanently residin #ith
him.
.ection 1K , (ediclaim @
Ris0 co$ered@ 2s per (ediclaim Policy
Rates applicable as per tari!!.
NOT3@
.ection 1 and 192: are compulsory !or O#ners 9+uildin: insured.
.ection 192: compulsory !or Tenant 9+uildin: insured"
(inimum number o! sections to be insured by o#ner is K
(inimum number o! sections to be insured by Tenant 9+uildin: insured is
Dic&!nt 4&r Secti&n:
i: /or additional t#o sections abo$e minimum sections described in c Y d abc 917E
discount on premium.:
ii: /or additional 5 sections 91KE discount on premium:
iii: /or additional 6 section 917 E discount on premium:
ReneCal Dic&!nt KE>ce5t Me'iclai3E
i: /irst rene#al@ K E
ii: .econd rene#al@ 17E
iii: Third rene#al@ 1KE
i$: /ourth rene#al@ 17 E 9max.:
$: /or abo$e discount L7 days race period can be allo#ed
$i: .ection discount Y rene#al discount is a$ailable !or all premium on all .ections
except section 1" section La" section Lb" section Lc" section 11 a" Y lib. /or rene#al
premium rene#al discount #ould be applied !irst !ollo#ed by section discount.
J I! there is no maintenance contract 9!or section 6 and section P: then premium
#ill be loaded by .C Y 177 E !or ..6 up to 1 lac Y abo$e 1 Lac respecti$ely
Y K7 E !or section P irrespecti$e o! ..I.
J Premium mill be loaded by .C Y 177 E !or .. 1. up to 1 lac Y abo$e 1 Ir
respecti$ely Y K7 E !or table L C irrespecti$e o! ..I.
& Activity F:
4No#adays pac0ae policies become more popular.4 8i$e your $ie#s reardin this
statement.
11.( )ERSONA* ACCIDENT INSURANCE
The purpose o! personal accident insurance is to pay !ixed compensation !or death or
disablement resultin !rom accidental bodily in?ury.
"aic c&ver
Durin the currency o! the policy period" i! the insured sustain bodily in?ury or death due to
accident" then the company shall pay to the insured or his leal hire up to the sum insured
stated in the policy.
/or clear understandin a specimen table is i$en belo# assumin sum insurance is
Rs. @ 77"7776,
.ac
|_
Death
91: Loss o! t#o limbs or both eyes
or one limb and one eye
T 9C: Loss o! one limb and one eye
i
i 95: Permanent total disability other
than the abo$e9e..: paralysis
due to accident.
i Permanent partial disability i
1L: Temporary
Total disablement
C&ntin:ency
On the re*uest o! the insured the policy can be issued !or all bene!its or any o! it.
Ty5e &4 'iaFle3ent:
iE )er3anent t&tal 'iaFle3ent:
In this case disablement is o! permanent and irreco$erable nature so that the insured
is pre$ented !rom any employment and hence lost earnin capacity !rom it.
A3&!
nt &4
c&35e
nati&n
5ayaFl
e
Rs.
177"777
6,i.e. 177E o! capital sum insured
Rs. 177"7776,i.e. 177E o! capital
sum insured
Rs. K7"7776, i.e. K7E o! capital sum
insured 177E o! capital sum
insured
Percentae as sho#n in the table in the policy
)ee0ly compensation o! Rs. 17776,9i.e. 1E
o! the capital sum insured: sub?ect to a
maximum o! 177 #ee0s. The amount o!
#ee0ly compensation is restricted to a
maximum Rs. C7776, per #ee0 #hate$er be
the sum insured and applies to all policies held
by the insured.
Loss o! siht o! both eyes or the physical separation o! t#o entire hands or t#o !eet
or one hand and one entire !oot or loss o! siht o! one eye and loss o! one entire hand
B!oot are considered as permanent total disability.
1: )er3anent 5artial 'iaFility
.imilar to Permanent total disablement@ #ith di!!erence is that disablement is not total
but o! partial nature. /or example loss o! a toe or a !iner. The percentae o!
compensation payable #ill be as per chart sho#n on the policy depends on the sum
insured. Doctor<s certi!icate is re*uired i! the disability is not mentioned in the chart.
/or example loss o! both hearin is 6K E.
C: Te35&rary t&tal 'iaFle3ent
This disablement is total but !or temporary period and depends upon the nature o!
in?ury it may be one day" #ee0s or months.
A''iti&nal Fene4it:
Carriae o! dead body@
709)3xpenses incurred !or carriae o! dead body o! the insured due to accidental death
to residence place are reimbursed 1E o! cpital aum insured or Rs. 1K77B, #hiche$er
is less.
710)3ducation !und
3ducation !und is pro$ided to dependent children in addition to sum insured in case o!
death or permanent total disablement is as !ollo#s@
i: I! the insured person has one dependent child belo# 1K years" then 17E o! the
capital sum insured sub?ect to maximum Rs. K777B,
ii: I! the insured person has more than one dependent children belo# 1K years" then
17E o! the capital sum insured sub?ect to maximum Rs. 17777B,
The bene!it is a$ailable only on capital sum insured and not on cumulati$e bonus.
@
C!3!lative "&n!
There is increased in the sum payable In case o! death or permanent total disablement by
KE in respect o! e$ery completed year maximum K7 E o! capital sum insured.
The cumulati$e bonus #ill be retained i! the policy is rene#ed #ithin C7 days o! the policy
period.
Pro$isos@
The insurer is not liable !or"
711) Compensation under more than one sub clause" 9a to ! o! the bene!it chart:in
respect
o! the same policy period o! disablement.
712) Policy becomes inoperati$e once the claim is settled under the sub clause 9a: to
9e:.
< : 2!ter the *uantum o! liability is areed" lump sum amount is paid as #ee0ly
compensation. In certain cases <on account> payment is made and ad?usted !rom !inal
payment.
3xclusions
E compensation is payable in case o! death or in?ury or disablement o! the insured@ ?
/rom Intentional sel! in?ury" suicide or attempted suicide. 1: Under the in!luence o! dru
or intoxicatin li*uor.
(ountin into or dismountin !rom or enaed in a$iation or tra$elin in any balloonin
or aircra!t other than as passener in any duly licensed standard type o! aircra!t
any#here in the #orld.
Directly or indirectly caused by $enereal diseases or insanity.
2risin !rom any breach o! la# #ith criminal intention. /rom
ser$ices in the 2rmed /orces. Directly or indirectly !rom child birth
or prenancy. )ar and nuclear ris0. Ratin
J,J ris0s associated #ith pro!ession or occupation $ary accordin to the nature o! #or0
!ormed. 2ccordinly occupations are classi!ied into C roups dependin upon the
Josure and the rates are accordinly.
2e limit is !rom K years to 67 years maximum.
I! there is continuous rene#al "policy can be rene#ed a!ter 67 years upto N7 years sub?ect
to loadin on rene#al premium.
No medical examination is re*uired !or !resh or rene#al co$er.
S5ecial Feat!re
713) 15 hours #orld#ide basis co$er.
714) 2utomatic co$er !or tra$el as a passener in a licensed standard type o! aircra!t.
Fa3ily 5ac9a:e c&ver
3arnin member9persons insured: and
spouse" i! earnin
177E o! Capital sum insured each
.pouse 9i! not earnin: K7E o! the capital sum insured or Rs. 1 la0h"
#hiche$er is less.
Children 9bet#een K to 1K years: 1KE o! the capital sum insured or Rs.
K7"7776, #hiche$er is lo#er per chi
d.
N&te
715)Limited co$er !or children co$erin death and total or partial disablement.
716)Premium payable !or husband and #i!e #ill be in the toral sum insured !or husband
and #i!e.
717)KE discount on ross premium.
E>teni&n
(edical expenses incurred at the time o! accident can be co$ered by payment o! extra
premium and passin necessary endorsement.
)ith appropriate additional premium" #ar ris0 co$er can be ranted to Indian personnel B
experts #or0in in the !orein countries on ci$ilian duties.
S!3 In!re'
The sum insured is depends upon the a$erae monthly income o! the insured. 8eneralOW
co$er is ranted !or an amount e*ui$alent to L7 to 61 times monthly income o! the insured
)ee0ly compensation is not allo#ed to students" house#i$es etc. &
Activity G#
4Personal accident policy is a bene!iciary> the contribution to#ards total premium is less.4
Identi!y at least !our points in your explanation.
11.6 CATT*E INSURANCE
This is a mar0et areement #.e.! @ 1,1 7,P6 amonst the .ubsidiaries o! 8IC o! India
in respect o! Cattle Insurance +usiness and updated !rom 2pril 177K .
1. .cope o! tGe A:ree3ent :
The 2reement shall be obser$ed by the constituent companies #ith reard to the
rates" terms and conditions prescribed by this 2reement to under#rite the +usiness
o! Cattle Insurance #ithin India. The #ord <Cattle< !or the purpose o! the 2reement
re!ers to @
718) (ilch co#s and bu!!aloes
719) Cal$esBhei!ers
720) .tud bulls
721) +ulloc0s 9castrated bulls: and castrated male bu!!aloes" #hether indienous"
exotic or cross,breed.
\ Note @
3xotic animal means an animal" #hose both parents are o! !orein breed. This includes
animals born in India as #ell as those born abroad.
Cross,breed animal mean an animal" one o! #hose parents is o! !orein breed.
8 A:e Gr&!5:
2nimals o! ae in years sho#n belo# shall be accepted under the .tandards insurance
.cheme prescribed by this 2reement.
91: 91: 9a: (ilch co#s
9IndienousBCrossbreedB3xotic:
722)(itch +u!!aloes
723).tud +ulls 9co# Bbu!!alo species:
724)+ulloc0
9castrated bulls and
castrated male bu!!aloes:
Indienous" cross,bred and
exotic !emale cal$esBhei!ers
725) Iears 9or ae
at !irst
cal$in: to 17 Iears.
726) Iears 9or ae
at !irst
cal$in: to 11 Iears.
C Iears to N Iears or earlier
ae at sexual maturity.
C Iears to 11 Iears.
/rom 5 months up to the
date o! !irst cal$in or
minimum ae as in 9i: 9a:
and 9b:
N&te@ 2t the time o! acceptance the maximum ae should not exceed the prescribed
ae limit.9 in case o! annual policy.:
3. -al!ati&n an' !3 in!re':
727)The mar0et $alue o! cattle $aries !rom breed to breed" !rom area to area and
!rom time to time. The examinin $eterinarian<s recommendations shall he
considered as the proper uide !or acceptance o! insurance as #ell as !or
settlement o! claims. )here$er possible" hih $alued animals shall be inspected
by company<s representati$e.
728).um insured #ill not exceed 177E o! (ar0et ;alue.
$. In'e3nity
729).um insured or mar0et $alue prior to illness #hiche$er is less. Care should he
ta0en to assess the $alue o! dry animals.
730)In case o! scheme animals" the policy is areed $alue policy" hence claim #ill be
settled !or 177E o! .um Insured sub?ect to terms" conditions and exclusions
nil 11 (iscellaneous Insurance
;. )re3i!3 Rate: KAnn!alE
/OR (ILC% CO). B (ILC% +U//2LO3. B /3(2L3 C2L;3. B
%3I/3R. B .TUD +ULL. B +ULLOC=. 2ND C2.TR2T3D (2L3
+U//2LO3..
No. .pecies
O. .cheme 2nimals
9IndienousBCross,bred:
Non,.cheme 2nimals
9IndienousBCross,bred:
3xotic 2nimals
DeatG
1.1KE
9net:
5.77E
9ross:
5.77E as
abo$e plus1.77Eextra
)TD E>tra
7.NKE
9net:
1.77E
9ross:
1.77E
NO SER-ICE TA@
i iiiimum Premium applicable as per tari!!.
heme !or ani3al
sr the purpose o! concessional insurance ratin should co$er animals !inancedB subsidi&ed
ider $arious CentralBstate 8o$ernment prorammes B .chemes besides IRDP such as
N De$elopment o! )omen Y Children .chemes in Rural 2reas.
11 .chemes !or .CB.T operated by the .tate 8o$ernments. si:
.pecial Li$estoc0 JD1 (oc0 De$elopment Proramme.
lalus 9Loadin:
N Clai3 Rati&
177 to 117 111 to 1C7
1C1 to 1L7 1L1 to
177 2bo$e 177
N &4 Mal!
17E
CCE
L7E
177E
Premium rate to be ad?usted such
that Claim Ratio #ould appear as
P7E !or the rate.
(INI(U( PR3(IU(@ Rs. K76, Per Policy NO .3R;IC3 T2U
S%ORT )ERIOD RATES
)eri&' Kn&t e>cee'in:E
1 #ee0
731) month
732) months
733) months
734) months
735) months
N months
3xceedin N months
Dic&!nt:
)r&5&rti&n &4 )re3i!3
1BN o! annual rate 1B5 o!
annual rate CBN o! annual rate
1B1 o! annual rate KBN o!
annual rate CB5 o! annual rate
6BN o! annual rate /ull annual
premiums
(. Gr&!5 Dic&!nt KF&r N&n6ScGe3e &nlyE
2 roup discount is allo#ed in case o! sinleBpartner o#nership andBor sinle source
o! premium payment and co$ered under a sinle policy 9not applicable to ban0
business:
NO. OF ANIMA*S
K,17
11,1K
1L,1K
1L,K7
K1,177
171,K77
RATE OF DISCOUNT
1.KE
KE 6.KE
17E 11.KE
1KE
9i! the 8roup is o$er K77 andBor $ery lare" the discount not exceedin 17E may be i$en
#ith %O appro$al.:.
nit 11 (iscellaneous Insurance
en
+. KaE *&n: Ter3 Dic&!nt KF&r N&n6ScGe3e Ani3alE
Discount
C and 5 years Policies 1KE
. years and abo$e 1KE
736) /ull premium has to be paid in ad$ance
737) No re!und o! premium #ill be allo#ed e$en i! a claim arises in the earlier
years.
738) 2e limit should be as abo$e
KFE *&n: Ter3 Dic&!nt KF&r ScGe3e Ani3alE
/or
.c
he
me
ani
ma
ls"
the
bas
ic
pre
mi
um
!or
Cye
ars
pol
icy
#o
uld
be
cha
re
d
as
per
tari
!!
95.N7E.: /or any additional year o$er C years" the premium #ould be e 1.L7 E per
year. I! PTD co$er the rate is L"L7E 9basic rate 5.N7E ]PTD 1.N7E:
91: 2d?ustment o! premium@ In case o! premature death o! cattle be!ore the expiry
o! policy period the premium !or the balance period a!ter ad?ustin the period up to
the year in #hich the animal dies" #ould be allo#ed as credit to be ad?usted aainst
premium !or the ne# animal re*uired by the insured.
,. In!rance C&vera:e:
The policy shall i$e indemnity only !or death due to@
739) 2ccident 9inclusi$e o! !ire" lihtnin" !lood" inundation" storm"
hurricane"
earth*ua0e" cyclone" tornado" tempest and !amine:
740) Diseases contracted or occurrin durin the period o! this policy.
741) .urical operations.
742) Riot and .tri0e.
The Policy can al so be extended to co$er PTD on payment o! extra premium@
743) Permanent Total Disability #hich in the case o! (ilch Cattle result in
permanent
and total incapacity to concei$e or yield mil0@
744) PTD #hich in the case o! .tud +ulls results in permanent and total
incapacity !or
breedin purpose.
9c: In case o! bulloc0s" cal$es B%ei!ers and Castrated male bu!!aloes results in
permanent and total incapacity !or the purpose o! use mentioned in the proposal
!orm.
Tranit C&ver
745)/or scheme animals no extra premium to be chared !or transit o! animal !rom
the place o! purchase to place to stablin. /or non,scheme animals" the distance
is not exceedin N7 0ms.
746)In case o! trans!er o! animal durin currency o! policy" transit co$er can be
extended to the ne# o#ner #ithout any additional premium in case the transit
#ithin N7 0ms.
747)In case the transit is !or more than N7 0ms" an additional premium o! 1 E shall
be chared and such transit shall only be road or rail and not by !oot.
.. E>cl!i&n:
C&33&n E>l!i&n:
748)(alicious or #ill!ul in?ury or nelect" o$erloadin" uns0ill!ul treatment or use o! animal
!or purpose other than stated in the policy #ithout the consent o! the Company in
#ritin.
749)2ccidents occurrin andBor Disease contracted prior to commencement o! ris0.
750)International slauhter o! the animal except in cases #here destruction is necessary to
terminate incurable su!!erin on human consideration on the basis o! certi!icate issued
by *uali!ied ;eterinarian or in cases #here destruction is resorted to by the order o!
la#!ully constituted authority.
751)The!t and clandestine sale o! the insured animal.
752))ar" in$asion" act o! !orein enemy" hostilities 9#hether #ar be declared or not:" ci$il
#ar" rebellion" re$olution" insurrection" mutiny" tumult" military or usurped po#er or
any conse*uences thereo! or attempt threat.
753)2ny accident" loss destruction" damae or leal liability directly or indirectly caused
by or contributed to by or arisin !rom nuclear #eapons.
754)Conse*uential loss o! #hatsoe$er nature.
9h: Transport by air" and sea.
9i: 2ny Non,IRDP claim arisin due to diseases contracted #ithin 1K days !rom the
date o! ris0 are not co$ered.
/ollo#in endorsement should be incorporated in all the Policies 4Not#ithstandin anythin
contained herein to the contrary" it is hereby declared and areed that no claim in respect
o! animal9s: co$ered by this policy shall be payable in the e$ent o! death o! animal9s: due
!< i diseases contracted #ithin 1K days !rom the date o! commencement o! the ris0.4
.pecial 3xclusions@
Pleuropneumonia in respect o! Cattle in La0himpur and .ibasaar Districts and ne#ly
car$ed out districts out o! these t#o disctricts o! 2ssam.
2ll the claims recei$ed a!ter #ithout ear ta.
A! 17. ;eterinary 3xamination@
755) The report o! a *uali!ied $eterinarian i$in the ae" identi!ication mar0s
health
o! the cattle must be obtained !or each proposal.
756) )here$er *uali!ied $eterinarians are not a$ailable" the under#ritin o!!ice #ith
%O appro$al may accept certi!icate o! health issued by li$estoc0 inspectors
#ho are diploma holders. .uch certi!icates #ill be $alid !or acceptances o!
proposals only.
757) /resh $eterinary examination is not necessary !or rene#al o! Cattle
Insurance
Policy" i! rene#al is made on or be!ore the date o! expiry o! the policy.
758) Insurers may pay the $eterinarian a !ee o! Rs. 1K , and Rs. KB,
to#ards
examination and tain per lare animal o! the proposal #hich has been accepted
by the insurer. No $eterinary examination !ees and chares are payable !or scheme
animals.
15: 2s reards ;eterinary examination !ees !ollo#in the death o! animals or !or
postmortem i! re*uired" the same #ill be payable by the insurer pro$ided the
claims are payable and the !ees can be prescribed at the insurer<s o#n discretion.
I! *uali!ied $eterinarians are not a$ailable in the area concerned !or certi!yin
cause o! death" the insurer may ma0e suitable alternate arranements at his
discretion.
11. I'enti4icati&n &4 Ani3al:
2ll Insured animals should be suitably identi!ied by one or more o! the !ollo#in
methods@
759)3ar ta made o! suitable materials should be used. The cost o! ear,tas and
tain chares #ill be borne by the Insurer.
760)Natural Identi!ication Y colour should be clearly noted in the proposal !orm and
;eterinarian<s Report.
761)Photoraph o! animal may be insisted in case o! hih $alue animals.
762)No tain chares as $eterinary !ee is inclusi$e o! tain chares. %o#e$er
retain chares per animal is !ixed.
/or post mortem and $eterinary examination" the rates may chane as per tari!!.
18. Tran4er &4 Interet
Pro$ided pre$ious notice in #ritin is i$en to the Company" a policy may be trans!erred
to an appro$ed ne# o#ner or to co$er a ne# 9another: animal sub?ect to ad?ustment
o! premium on a pro rata basis.
13. Clai3 )r&ce'!re:
Non scheme 2nimals@
In the e$ent o! death o! an animal immediate intimation should be sent to the insurers
and the !ollo#in re*uirements should be !urnished@
763)Duly completed claim !orm.
764)Death Certi!icate obtained !rom *uali!ied ;eterinarian on Company<s !orm.
765)Postmortem examination report i! re*uired by the Company.
766)3ar Ta applied to the animal should be surrendered.
767)Complete treatment chart in case o! PTO Claim.
9Companies may enae an independent *uali!ied ;eterinarian or another in$estiator
in special circumstances.:
(iscellaneous Insurance
S4Ge3e Ani3al:
ation o! loss Bdeath o! animal should be i$en to the Company or /inancin +an0
lately" #ithin 6 days. Claimant has to !urnish the !ollo#in re*uirements #ithin C7
# LBuly completed and sined claim !orm alon #ith ear ta.
rti!icate !rom ;eterinary .ureon or Certi!icate !rom .arpanch" any o!!icial !rom
(il0 dairy sub?ect to their declaration that they ha$e seen the carcass and earta
intact in the ear mentioned thereto.
,! 9c: Post mortem report i! any.
ai3 )r&ce'!re 4&r )TD Clai3:
T9a: 2 certi!icate !rom the *uali!ied $eterinarian to be obtained.
The animal should be inspected by our ;et. o!!icer also. !c:
Complete treatment chart in case o! PTO Claim.
2dmissibility o! claim to be considered a!ter t#o months o! issue o! receipt o! $etnary
certi!icate.
s
0: Tin indemnity is limited /f 0.% o! .um Insured.
T5. .al$ae@
I.
i No sal$ae #ill be deducted !rom claims.
i
A S%ORT )ERIOD RATES
)eri&' Kn&t e>cee'in:E
768) #ee0
A month
769) months
770) months
771) months
772) months
N months
3xceedin N months
)r&5&rti&n &4 )re3i!3
1BN o! annual rate 1B5 o! annual rate
CBN o! annual rate 1B1 o! annual rate
KBN o! annual rate CB5 o! annual rate
6BN o! annual rate /ull annual
premiums
Activity % :
Identi!y the need !or cattle insurance in India.
11., SUMMARY
In this unit" #e ha$e seen that there are $arious policies to co$er all miscellaneous properties.
)e ha$e also introduced a policy #hich co$ers all $aluable articles" as #ell as pac0ae
policies in #hich one policy is issued to co$er $arious ris0s and becomes $ery popular in
the insurance industry because it is desined as per re*uirement o! the insured.
)e ha$e discussed one bene!iciary policy" that is" the personal accident policy. It pro$ides
!inancial support #hen insured !or sustained bodily in?ury and disability due to accident
and in case o! death" pro$ides an education !und to the children #ithout any extra premium.
2lso #e ha$e one throuh the mar0et areement !or cattle insurance. The 8o$ernment o!
India has launched $arious prorammes !or the bene!it o! the small !armers. One o! it is
cattle insurance. Throuh this" the animals" #hether indienous" exotic or cross bred" are
co$ered.
)e ha$e also discussed $arious terms and conditions applicable to these policies.
11.. 0EY1ORDS

All6Ri9 )&licy
A:ree' -al!e )&licy
"!r:lary
Co$erae by an insurance contract that promises to co$er all
losses except those losses speci!ically excluded in the policy.
2lso 0no#n as open peril co$erae.
Policy #hich underta0es to pay a speci!ied amount in case o!
total loss. Under this case" the policy does not ta0e into account
the current mar0et $alue.
It is a the!t committed by brea0in into or out o! the premises.
3$idence o! brea0in in is necessary.

It is the sum Insured o! a person !or #hich the co$er is souht
under a Personal 2ccident Policy.
The percentae at #hich the sum insured increases annually"
#ithout additional premium. /or example" Personal 2ccident
Insurance" (ediclaim Insurance.
Inability to per!orm all or part o! one<s occupational duties
because o! an accident or illness@ see Total Disability and Partial
Disability
This policy is desined to i$e a co$er" #hen there is a remote
possibility o! total loss o! a commodity.
2 pac0ae o! insurance pro$idin homeo#ners #ith a broad
rane o! property and liability co$eraes.
The unla#!ul ta0in" carryin" leadin or ridin a#ay o! another
person<s property.
*
!?ar0et 2reement @ It reulari&ed rural business. It came into !orce !rom 1.17.1PP6.
Ipc0ae Policy
f
>ial Disability
!tlinanentB Total
nblement
2 combination o! t#o or more indi$idual polices into a sinle
policy. 2 householder<s policy" !or example" is a pac0ae
policy.
The result o! an illness or in?ury" #hich pre$ents an insured
!rom per!ormin on" or more o! the !unctions o! hisBher reular
?ob.
)hen the disablement is o! permanent and irreco$erable nature.

>m
Disability
tt0h bene!its 9!or
? 2ccident
ice:
3xtra rate is chared !or this co$er.
2n illness or in?ury #hich pre$ents an insured person !rom
continuously per!ormin e$ery duty pertainin to hisBher
occupation or enain in any other type o! #or0.
They are paid !or the period o! temporary total disablement
!ollo#in an in?ury #hich is admissible under the policy.
Capital .um Insured
Oulati$e +onus
lability
Loss Policy
+eholders Policy
n$
Hl. )rite do#n the main co$erae under %ouseholder<s Policy. H1.
Describe the scope o! the o!!ice protection shield. HC. List out the
!ormalities to be completed !or cattle insurance claims. H5. )rite short
notes on@
773)/irst loss policy.
774)PTD co$er.
775)3xclusion o! all,ris0 policy.
HK. /ill in the blan0s@
a: +urlary Insurance is,,,,,,,,,,,,,,,business.
b: I!morethan,
, is pro$ided.
,sections are ta0en in .I 2ND %I 2 discount,
776)-------------------------------Plate lass is co$ered under
policy.
777)There are,,,,,,,,,,,,,,,sections in o!!ice protection shield.
778).toc0 declaration policy is issued #hen there is,,,,,,,,,,,,,
HL. .tate #hether True or /alse.
779) .hop0eepin is a tari!! business.
780) 2 portable computer is not co$ered in the o!!ice protection shield.
781) Larceny is co$ered in %%I policy.
782) .cratches on lass are payable under the plate lass policy.
783) ;eterinary examination is not necessary in cattle insurance.
,in stoc0.
ANNE@UREI
D& P D&nJt
A** RIS0S INSURANCE
Dindly o throuh the policy and ensure that you are ade*uately co$ered.
<lease ma0e sure that rene#al is e!!ected by payin the premium be!ore the expiry
iate.
It is ad$isable !or the Insured to obtain $aluation certi!icate in respect o! property
i isured !rom a $aluer" to !acilitate prompt settlement o! claims. 2 copy o! this certi!icate
may be pro$ided to insurers.
s he insured shall ta0e all precautions !or sa!euardin the property insured li0e 0eepin
the premises properly loc0ed #hen not occupied and sa!e 0eepin o! duplicate 0eys.
in the e$ent o! a claim" immediate in!ormation to be i$en to police i! any property is
!olen. The insured shall pro$ide copy o! /.I.R. and other rele$ant documents to
sist insurers in in$estiation.
Upon a loss the onus #ill be on the insured to pro$e that the claim has not arisen due
to the property bein merely missin.
6. 3nsure that the property is correctly described and insured !or !ull $alue to et ade*uate
lemnity.
i,
6. Whether cover is also required outside ndia. f
yes, give details
7. s the risk currently insured against Fire,
Theft or All Risks? f so, please state a)
Name & address of the Company b) Policy
No. c) Period
8. a) Have you suffered any loss of or damage to
Jewellery and/or other valuables in the past?
(irrespective of whether insured or not)
b) f so, give full details thereof as under
; Date of Occurrence Details of Loss Amount of Loss Rs. Name of the nsurers
9. Has any Company in respect of All Risk
nsurance a) Declined your Proposal? b)
Cancelled or refused to renew your Policy c)
Accepted your proposal on special terms and
conditions?
10. Period of nsurance From To
Declaration &$ (ro(o"er
iWe do hereby declare that the above statements and answers are true and that /We have not
..ithheid any information whatsoever regarding the proposal. /We agree that this proposal and
declaration shall be the basis of the contract between me/us and The New ndia Assurance Co. Ltd.
whose Policy for the nsurance proposed is acceptable to me/us. /we undertake to exercise all
Tdinary and reasonable precautions for safety of the property as if it were uninsured.
Place :_________________
:_________________ Signature of Proposer
PROHI7ITION OF RE7ATE
on 41 of +he I#"!r*#e A+ -<=:
10 person shall allow or offer to allow, either directly or indirectly, as an inducement to any person
;otake out or renew or continue an insurance in respect of any kind of risk relating to lives or property
a any rebate of the whole or part of the commission payable or any rebate of the premium
on the policy nor shall any person taking out or renewing or continuing a policy accept any
except such rebates as may be allowed in accordance with the published prospectuses or
:>f the nsurer.
rson making default in complying with the provisions of this section shall be punishable with
ich may extend to Five Hundred rupees.
ANNE@UREIII
DODS & DONDTS
7URGLARY & HOUSE7REA6ING INSURANCE
784) Kindly go through the policy and ensure that you are adequately covered.
785) Please make sure that renewal is effected by paying the premium before the expiry date.
786) The nsured shall maintain books of accounts/Sales/Purchase Registers and shall product
the same for verification in the event of a claim to the authorised representatives.
787) The nsured shall take all precautions for safeguarding the property nsured / like providing
watchman and keeping the premises locked when not occupied and safekeeping of
duplicate keys. All valuables/Cash to kept in safe outside business hours.
788) n the event of a claim the insured should immediately inform police and insurers and
provide copy of F..R. and other relevant documents to nsurers for arranging survey/
investigation.
789) To obtain full indemnity insure for the full value.
790) n the event of a claim do not alter the affected arrangements (unless required to safeguard
property).
ANNE@UREIII
fi+ THE NEW INDIA ASSURANCE
COMPANY LTD.
3 KPT % Pt, ' irs, y - x
1
? 9 oov.
Regional Office : Sharda Centre, 2nd floor, Off Karve Road, Pune - 411 004,
quftcffcT ticf OTH ^rafe^, <W HSTW TfsJt HPf, <5tC, 5?lf . t(( (at Regd. &
Head Office : 87, Mahatma Gandhi Road, Fort, Mumbai - 400 001.
Pro(o"*l For8 for 7!r3l*r$ *#' Ho!"e 7re*@i#3 I#"!r*#e
(The property is not lovered until the risk is accepted and premium paid)
()(r Office Use Only)
Development Officers' Name & Code
Agent's/Broker's Name & Code
(To be filled in by proposer)
Name of proposer (in bold letter)
Address of Proposer including pin code
Sin block letters)
Phone
Fax
E-mail
Business/Trade of Proposer
Name of the Financial nstitution/s (if any
financial interest is involved)
Address of the premises to be insured
791) Whether Warehouse, Godown, Shop or Office"
792) How long have you been an
occupant of pren
:) Are you the sole occupant?
d) f not, who are other occupant?
Nature of construction
a| Walls
b)Rool
)r&5erty an' *iaFility In!rance
Nature of protection provided to :
793) Doors
794) Windows
795) Any other openings
1) Mention any special
precautions you have adopted for
safeguarding your property.
9, Will the premises be guarded by Watchman
during day and night?
10. a) Are all valuables secured in safe(s), Outside business
hours? b) Give details :
1) Maker's name 2) Height 3) Width 4) Depth 5) Weight of safe(s)
11. a) Are stock and sales books maintained? b)
Where are these books kept outside business
hours?
12. a) Have any premises occupied by you been entered by
thieves?
bj f so, give full particulars stating when and how access was
obtained and the extent of the loss.
c) What precautions have been adopted to prevent such a
recurrence?
13. s the risk currently insured against Burglary? f so,
a) The name of nsurance Company b) Policy No, c)
Period
14. Has any Company in respect of your Burglary
nsurance : a) Declined your proposal? b) Cancelled or
refused to renew your policy? c) Accepted your
proposal on Special terms and conditions?
15, Do you need cover against Riot and strike,
terrorist activities on payment of additional
premium?
A
ru
16, Property to be insured (Give full details) a) Stock in
Trade b) Goods helped by the Proposer in trust or on
commission for which he is responsible. o) Furniture,
Fixtures, Fittings, Utensils and Appliances in trade j)
Coins and/or Currency Notes in locked safe e) Others
(To be specified)
SUM TO BE NSURED (Rs.)
| 1? Period of nsurance From To
Declaration &$ Pro(o"er
- reby declare that the above statements and answers are true and that /We have not withheld any information whatsoever regarding
ts Proposal. /We agree that this proposal and declaration shall be the basis of the contract between me/us and The New ndia Assurance
ihe property as it it

"signature of Proposer
PROHI7ITION OF RE7ATE
Section 41 o+ +he I#"!r*#e A+ -<=:
ui shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance
si ot any kind ot risk relating to lives or property in ndia, any rebate of the whole or part of the commission payable or any
rebate emium shown on the policy nor shall any person taking out or renewing or continuing a policy accept any rebate, except such
rebates be allowed in accordance with the published prospectuses or tables of the nsurer, fe person making default in complying
with the provisions of this section shall be punishable with fine which may extend to Five Hundred
C1K
(Subsidary of General Corporation of ndia)
F
'
Na

HH1/1
PUNE REGONAL OFFCE : SHARDA CENTRE, 2nd FLOOR, OFF KARVE ROAD, PUNE - 411 004.
HOUSEHOLDER'S NSURANCE PROPOSER COPY
PROPOSAL FORM-CUM-SCHEDULE ATTACHED TO & FORM NG PART OF POLCY NO.

NSURED: 1. NAME OF PROPOSER N FULL
796) RESDENT AL ADDRESS
797) OCCUPATON
PEROD OF NSURANCE
FROM:
TO:

.3CTION
NO.
FRE & ALLED
PERLS
BURGLARY
HOUSEBREAKNO
NCLUDNG
LARCENY
ORTHEFT
DESCRIPTION )* PROPERTY
A. BULDNG (OF CLASS-A CONSTRUCTON ONLY)
B. CONTENTS (Excluding Jewellery & Valuables)
Belonging to the Proposer and members of his family permenantly
residing with him ....................................................... ___________
CONTENTS:
Ail contents in the premises stated ail the above
address ,................................................................................
Note: nsurance on contents should be for value equivalent to the
value mentioned under item i-B above
SUM
INSURED
RS.
RATES
)er
Mille
0.50 O.SO
2.40
PRIMIUM
r the use the
Compan Rs,)

ALL RSKS Jewellery & Valuables: *
Description of jewellery and valuables- value ..........

'LATE GLASS
BREAKDOWN OF
DOMESTC
APPLANCES
V T.V. SET
Description of place glass and its value...............
Year of Make
Description of all Electrical, Electronic and Mechanical
appliances. Apparatuses or Gdgets belonging to the
Proposer
Name of Manufacturer
2.50

;II
PEDAL
CYCLES
Make & Name of
Manufacturer 1.
Farme No.
Rs. Rs. Rs.
Value including
accessories
20,05

;III
BAGGAGE
NSURANCE
X
PERSONAL
ACCDENT
Details of Personal Baggage, Personal effects and other articles carried
{during the period of Travel anywhere in ndia)......................................
Total...................Value
Relationship with Proposer
Note: (i) For Table of benefit see information sheet.
----{ii) for assignment of benefit in case of death (please see beiow)
as pet
Co<s
guide
lines
(tariff)
Y Table

LABLTY
X
PERSONAL
COMPUTERS
AND
ACCESSORES!
798) Public Liability
799) W. C. Liability for Domestic
servants.
Description of items
Year of
Manufacture
as per tariff

Whether Terrorism risk is to be covered. Yes / No
Note: 1) The iiabiiity of the company does not commence until
fhe proposal has been accepted by the company and the full premium paid.
800) if space is found insufficient please attach separate sheets !or details
801) Perns of Standard Fire & Special Perils Policy and Earthquake F!s. 0.50 per mile.
TOTAL PREMUM Less:
Discount for covering
more than 4 section.......%
NET PREMUM
/ We hereby declare the particulars Contained harein are true and correct and that no malarial fact has been withheld, misstated
or misrepresented and aiso that the proposal cum shcedule terming part of he company's standard policy shall be the basis of the contract
between me/us and the company. /we further declare that the sum insured herein represent he full value of the property described herein.
Place:
Date
Assignment clause for personal accident insurance-Section X Signature of Proposer
..........................................................................................do hereby assign the money payable in he event
o! my death by trie New ndia Assurance Co. Ltd, to.........................................{Name & relation to the insured)
Dated this...................day_______200______at________....
Wilhness
802) Name@
803) Address
Signature of Proposer
(TO BE COMPLETED BY INSURANCE COMPANY)
SPECAL CONDTONS : nsurance cover herein applies to section Nos.......................above. n withness where of signed
Total....................
Year of Make
Make
Model
Table
Name of
asignee
&
relation-
Age
Details ol
Existing
infirmity/
Disability
Total
opted
Occupation
Mod
el
Sr.
No
by & on Behalf of the company.
OFFICE ADDRESS> DATE>
Shivani - 50 x 200 Pads. 6/04
FOR THE NEW INDIA ASSURANCE CO. LTD.
Duly Constituted Attorny P.T.O.
'- rhtn isyer of grass, hay, of rssds on incombustible rooming is permitted.
: BURGLARY, HQUSSBREAKiWG, LARCENY ORTHFT; Lose o; damage So property contained I% the pre?r!j$e$ occupied
by rne nsured. !f proposer desires to specifically insure tSenns of Jswefcery and Va'uabtes under Section No. it wi!s be necessary tor him to
insure suchiteira of jewellery and Valuables under Section {OSaiso, so the! tfiesum insured under section i |8)and i! would be identical,
SECTON Hi: At.t HSSKS : Jew-sfie-ry and Va!uai)f*s against ioss or ijarnage t*y accident or misfortune whilst any where in india subjeei to
F
inrts of liability specified in 'fte schedule.
SCT10N [V: PLATE CWSS : f ixsrf pfsis glass ag^ns! accidental danvage subject to
+
,m- (. liability specified ;n tha scheciute SECTfON
V; BREAKDOWN OF DOMESTC APPLANCES : Damage caused by antf/or sotey duff to rnec'Har'icai and/or sise'fâ; bresk-Jowii of
domestic elsctnea;. s'ecsrorw; or med^-Mcal sppl-eances.apparatus Of gadgets.
SECTON Vi: TV SS Loss of or damage to TeL;v;sior; sef by fire. Ngfhiog, expfosiwcf gas in aomastic appliances, brii3!:ng and overflowing
<j! '/ytfter !ank^ Air craft and ariictes dropped tnedfOm, earthquake. Fire and/or snock, flcKjef irtundaton. Cylone and iiks Perils,riot strike or
fTwiiCious act Ourg&ry or hoifSe-breahfng or theft acfiktenfsf extonai tr>ear:s and machanica! or etecincai breakdown, Laga! liabilities !o
Rs.35000/and damage to insured's own property due to coffapsed of Antenna upto Rs 300ft'-
SECTON V!!:PEDAL CYCLES : toss or damages due !o fire, fighting, external explosion, riot and strikes or malicious act, earthquake /ire
ana/or shocfc.fJOfxJ inunfjaS.v': sfcrm. t;yc!or;e .-ind oi/wr JiKe periis, burgiary, hoiiebrgai<irjg anri/or tne'i and/or exfemat accidsnt.also fsgal
fiabihty S'jbjeo? to ilmst of Rs. 'OOQCA-
FRANCHiSe : The !!rst Rs. to/- is not payable for each snrf every loss but !he cempany will be liabis fef loss in full if it sxdeods Rs.10/-
SECTiOH Vlii: BAGGAGE !NSURANCE:Uoss of damage to insumd's accompanied Baggage by accident or misfortune whilst me insured ts
traveling on rou? os holiday anywhere in ndia. sr"T
:
r:; . . .-jONAL ACCDENT: Death orfcodi?y injury by ascMentai, vioient, external
and visib'e means to the insured persons
- and subjficf to i.
:
rr,iiS as specified in 'he schsdui*.
., i,' ; seofior; Dumber fX Persons! Accident are as under
Benems No.
B@nefi(s T&bte
Benef i ts
Covered FîsSss Oraup
! ii tii
1. Desih only 100%c!Ci D 1 Q.4S 0,5/1 o.so
2. Loss of Two iimbs Two Eyes or
one Nmb ancS one sye 100% of CSi
a Loss of one ymh or one eye 50%
of CSi
4, Permenant Toisi Disablement rom jn/urMs olfter tftan C t o4 0.70 O.SO 1.30
named above {RD-} 100% of CS!
ft. Peimenant Partial Disabieinent B 1(05 1.00 !.2S 1.75
% as per schedu!e of !fte policy
6. Temporary Total Disablement (T.TD)01%OF CS upio A 1to6 1,50 2.00 3.00
100 weeks {maximum weekly benefit riot exceeding
Rs. 3QCQ/-)
Classification of Risks ; Tho PA. Risks are divied inio three groups as delatls bsiow {Applicable to individual risks or 'named person's
under group insurance);
RSK GROUP !; Accountants, Doctors, lawyers. Architects, Consulting Engineers, Teacners, Bankers,Person engaged in administrative
funcdons, Persons primarily engaged in rx;cupaiions (1 similjsf hsirard,
RSK GROUP fi: Buifders. Centra;';:- -~ ve'-niending (unctions oniy, Veterinary Doctors, paid drivers of motor
carsand light motor vehiclesand p<: ;
:
iiMsr hasard and no! engaged in manuai labour. A'l personsengagec!
in manual iaoour (Expect those fair : ' ' . _ f-sng Employees, Garage and Motor Mechanics, Machine Operators,
Drivers of trucks or tarries and other heavy vsiiicles, Professional Athletes and Sportsmen, Woodworking Machinists ane Persons engaged i;i
occupations of similar hazard.
RSK GROUP flf; Persons working in underground mines, explosive, magazines, workers involved in electrical installation .-.-/. , - >. ion
supply jockeys, Circus personnel, Personnel, Parsons engaged in activities liKe racing on wheels or housebacM, : :-g
mountaineering, winter ^jorts, skiing, ics hockey, bailooning, hand gliding, over rafting, polo and persons engaged in co:... . . .es
of similar hazard.
ADDTONAL COVERS 1. Medical Expenses (arising out of an accident) upio
10 of the capital Sum nsured or 40% of Sfse adrnissiWs claim whichever is lower,
a: addisôndl premium 20% of basic premium, .I Acfusf expenses in rospoct of carriage of dead body (due So accident) of ih
insured so tne place o! his/her residence, subject to a
rnxirni!'n of 2% of the C.S.!. Rs. 2500/- whichever is lower, .,t bductson grant is payabie in the event
of death or permarnent total disablement of the nsured Person:
a) One ctepKHdent child below 25 y#ars of a01 10% of CSi subject to maximum of Rs, 5,000^-
D) More tfian one dependent child below 25 years of age 10% of CSi subject to maximum of Hs. 10.OOOA-i
Family Package Cover as under 4S10% discoun!:
804) Earning Member (Person nsured and
spouse) if earning 100% of CS eacn,
805) Spauss (if not earning) 50% of CSiorHs.1 Ukh
whichever is lower.
806) Children (Age of S to 13 years} 25% of CSf or Rs,
50.00GAwhichever ts lower per cruld-
NOTE : i For chiidren tne co^r wilf be limited io Benefit 1 to 5
SECTQN-X : PUBLC UA8LTV: insurea's legal liability for boclify injury to or foss of prt^jerty of third party limited to amounJ specified in !
h. schedule and Workmen's Compensation liability to domestic servants engahed in the insured permises,
MNMUMTHRES CO5ERS COMPULSORY INCLUDING SECTION D7DlS COMPULSORY
GROUP OiSCOUNT
Where more than 4 upio 8 Sections {induding tariff rated sections) !5%an Non-Tariff fafe only
Where mora than 6 Sections (including tariff raied sections; 20% -do-
RSK EXCEPTD ; {iilys'rative Snot Exhaustive) The Policy does not cover inler alia ioss damage by war civii war and the >ike depreciation,
wear and tear, consaquente; foss etc.
The foregoing is only Sraad indication oi Jfie cover offered and eor further details please refer to any Office o! the Company
HOUSEHOLDERDS INSURANCE
HOUSEHOLDER'S NSURANCE POLCY is designed to cater to the requirements of the householder by combining under a single
poiicy a number of 2(%ti%01%2i1s which are otherwise covered separately the poiiey covers as under; SECTION - >EA) 7UILDING OF
CLASS DAD CONSTRUCTION ONLY& %S) CONTENTS
Against Fire , lightning, explosion of gas in domestic appliances, bursting and overflowing of water tank, apparatus of pipes, aircraft or
article" ffn-v.npft mp^^m riot arm strike. Earthquake (fire and or shock), malicious act, flood, inundation; strom, cyclone, subsidence and
\'t r *3. . * .. .. . âct by any rai l / road vehi cl e or ani mal .
CLAS 45-6 have external wail (sJSlane/Brtck&Concrete block/Asbestos Sheets
Cladding and/or Metai
sided ad roof of R. C. C. Masonry i Asbestos Concrete Sheets/Metal Sheets.' Tiles, cdf-n
frame-work. reads on incombustible rooting is permitted.
v, reinforced sheet;: .*5 . * . - . . Skylights.
ORTHEFT: loss o
:
'<*?y contained in !he premises occupied
-:. or Jewehc-ry and va-,--: , ,- -.^cuon No.!! it wiit t?s necessary for him to
insif'.->-, . ;->y/eifery and V~mjsbi:-, 'irsdiif ;-?,-vfe;
r
s (8U!so, so ihsf the sum insured under section (B)and would be identical.
SEC"' ! <S : Jew siiery and V'aiyahtes aaairî loss or damage by accident or misfortune whilst any where in ndia subject to
PeriJ **7/
****7 house-îeaking or rhefi acrjicjental exlarnai means and mechanical or sfectficai breakdown, uag
riSLired's own property due to coffepsed of Ante^s upio F^s 3
{
300/-
. ; VCLES : Loas or damages due to fire, lighting, external exp'osicn, riot and ilnkes or malicious act, earthquake fire :n
-&,/
+
.yî(5-r, si$-rm, cyclone and othsr itke perils, burgiary, heyebrsaklng and/or fheH and/or exlsrrsa! aOTicfent.ateo iega! it of Rs. 1
DOOOA
Vst R<;. 10/- ^ not payable tor each and every loss but \8& company wili be liabia for toss m full if it exdeeds Rs,10/-'i -.it t
K<t t^ r j irt * s accoinpanisri Baggage by accident or misfortune whilst ihe insured
! o
r
boci s Cidentai, violent, external and visible means to the insured persons it le.
Bentiti No.
SsnefiSs Table
Benefits
Covered
Risks Group
J tEi
Death only 100% of C! D 1 0.45 0.5/1 0,30
? Loss of Two iirnbs Two Eyes or
one limb and one eye 100% of CS!
3- Loss of one limb or one eye 50%
of CSi
4. Permerisnt ToJaf Disablement from injuries oihsr than C 1tc4 0,70 0.90 1.30
named above (P.T D.) 100% of CSi
5. Permenanl Partial Disablement B 1to5 1.00 S.25 1.75
% as per schedule o! the policy
6. Temporary otas Disablement (T.T0)01%OF CS) upto A 1to6 1.50 2.00 3.00
100 weeks (maximum weekly benefit not exceeding
Rs, 3000/-)
Classification of Ri"@" : The PA. Risks are divied into three groups as details below {Applicable to indivioual risKs or 'named person's
uficfer group insurance}
1
RIS6GROUPI *. **** ***-* / * * * * * * * . . - * * Consulting Engineers, Teachers, Bankers, Person engaged in administrative
functions, PfS(.v ^ hazard,
FHSK GROUPfi f
;
,-- .,'-:" / * - . * * * 9 - / ** ' j-;ged in superintending functions only. Voierinafv Doctors, paid drivers of motor
cars and hghr motor vehicios and parsons engaged in occupations of simiiar hazard and not <? **& iabouf. All personsengaged
lit manual iahour (Expect those failino, under Group i!i}Cash Cartyping Employees, Garar. ;-.hanics, Machine Operators,
Drivers of tf Licks or forces and othsr heavy vehic!es: Protessionaf Athletes and Sportsmen, v\", ." / -. ~ -,-cninists ane Persons engaged in
occupations cf v - , ,
RIS6 GROUP Mi ] in underground mines, explosive, magazines, workers invofved in oiectrical installation virith high tension
supply jockeys, C . -, > ( , Personnsi, Persons engaged in activities like racing on wheels or hQus&baG*, big game hunting
mountaineering, winter sports, skiing, ice nockey, baiiooning, hand gliding, river ratting, poio and persons engaged inoccupations' activities of
sirnilar hazard.
ADDITIONAL CO5ERS
1, Medicai Expenses (arising out ol an accident) upto 10% of the capita! Sum nsured or 40% of ihe admissive claim whichever is lower,
at additional premium 20% of basic premium.
2. Actual expenses in respect of carriage of dead body (due to accident) of ihe insured to the place of his/her residence, subject to a
maximum of 2% oi the C.S.i. Rs. 2500A whichever is lo0er.
3 Eduction grant is payabia in ihe event of death or permament total disablement of the insured Person: a}
One dependent child bek/w 25 years of age 10% of CSi subject to maximum of Rs, 5,OOC/-c) More than
one dependent cMd below 25 years of age 10% of CSS subjeci to maximum of Rs.lO.QOO/-
4. Family Package Cover as under 4S10% discount:
807) Earning Member (Person insured and spouse) if
earning
808) Spouso (if no? earning)
809) Children (Age o! 5 to 19 years)
NOTE : 1 For children trta cover wif! be limited to Benefit 1 to 5
SECTION-F > PU7LIC LIA7iLTYD. nsurer's iegai liability for bodily
injury to or ioss of property of third party limited to a the schedule and Workmen's Compensation liability to domestic servants
engahed in the insured permises.
MINIMUMTHRES CO5ERS COMPULSORY INCLUDING SECTON '8' !S COMPULSORY
GROUP DISCOUNT
Where more than 4 upio 6 Sections (including tariff rated sections) 15%on Non-Tariff rate only Wfterc
more man 8 Sections (Deluding tariff rated sections) 20% -do-
RfSK EXCEPTED ; ;iilucrative Snot Exhaustive} The Poiicy does no? cover inler alia ioas damage by war civi! war and the iike depreciation, wsar
a^-d leaf, consequeniiai Joss etc.
The foregoing is only broad indication o! ihe cover ottered and eor ruriher details please refer to any Office of the Company
Wocxlen Hingis-si or Boarding (% R C,C / Steel
N.6. 1. Thsn layer of grass, hay
9. U"e o1 TheG SECTION H>
BURGLARY, HOUS
!
d. !* proposer
desires >,
100% of CS each,
50% oi CSorRs.1 Lakh whichever is tower,
25% of CS or Rs, 50.000A whichever is lower per child,
mount specifier
PUNE REGONAL OFFCE : SHARDA CENTRE, 2nd FLOOR, OFF KARVE ROAD, PUNE - 411 004.
HOUSEHOLDERDS INSURANCE PROPOSER COPY
PROPOSAL FORM-CUM-SCHEDULE ATTACHED TO & FORMNG PART OF POLCY NO.
:

NAME OF
PROPOSER N FULL RESDENTAL
ADDRESS OCCUPATON
PEROD OF NSURANCE
FROM:
TO:
NSURED: 1.
2
.
SECTON NO.
DESCRPTON OF PROPERTY
SUM
NSURED
RS.
RATES
Per
Milie
PRMUM
for the use o
the Compan
R)
1 FRE & ALLED
PERLS
A, BULDNG (OF CLASS-A CONSTRUCTON ONLY)
B. CONTENTS (Excluding Jewellery & Valuables)
Belonging to the Proposer and members of his family permenantly
residing with him ................. ...................... ..............
0.50
0.50
BURGLARY
HOUSEBHEAKNG
NCLUDNG
LARCENY
ORTHEFT
CONTENTS:
All contents in the premises stated all the above
address ............. ...................................................................
2.40
Note: nsurance on contents should be for value equivalent to the
value mentioned under item -B above
ALL RSKS Jewellery & Valuables:
Description of jewellery and valuables- value ....................................
10.00
V PLATE
GLASS
10.00
V BREAKDOWN
OF DOMESTC
APPLANCES_j
Description of all Electrical, Electronic Year of Make Value
and Mechanical appliances.
Apparatuses or Gdgets belonging to
the Proposer Total ................................
2.50
V
TV, SET
Name of Manufacturer Make Model Year of Make Value 10.50
V
V PEDAL
CYCLES
Make & Name of Year of Farme No. Value including
Manufacturer Manitfartnror accessories MaKe
& Name of Year of Farme No. value inciuuing
Manufacturer Manufacturer accessor es 1
Rs. 7 Rs. f
Rs.
20.05
20.05
RS.
V BAGGAGE
NSURANCE
Details of Personal Baggage, Personal effec s and other articles carried 7.50
Total ................................... Value
X PERSONAL
Name Age Occupation Relationship Details of Total ,]***,
wi t h Propose, & f t *:, opt ed a&l Disability
r
shio""
as per
Go's
guide
lines
(tarilf) &
Table
ACCDENT
1.
2. 3.
Note: (i) For Table of benefit see information sheet, (ii) for assignment
of benefit in case of death (please see below)
LABLTY
A) Public Liability 8) W. C. Liability for
Domestic servants.
0.50 as
per tariff
X PERSONAL
COMPUTERS
Sr, Description of Model Make Year of No.
items No. Manufacture
AND
ACCESSORES
Whether Terrorism risk is to be covered. Yes / No -T-^, r,r^r-. . *
OAL PHfclvlUlvl
Nol: 1) The liability of the company Uoes not commence until , nhu-niinf fnr rnuorinn
t81 proposal has ben accepted by the company ana ho Ml premium paw,
Less
-
u|
SCOum lor Covering
2) f space is found insufficient pleasa attach separata sheels for details more than 4 section ----------------- %
3} Perils of Standard File & Special Perils Policy and Earthquake Rs. 0.50 per ile. jvj^j PREMUM
Rs. Rs.
Rs.

si
Ul i t?
(I We hereby declare the particulars Contained herein are true and correct and that no material fact has been withheld, misstated
or misrepresented and also that the proposal cum shceduie forming part of the company's standard policy shaJ! be the basis ot fhe contract
between me/us and the company, i/we further declare that the sum insured herein represent the full value of the property described herein.
Place:
Dale
Assignment clause for personal accident insurance-Section X Signature of Proposer
i.................................,.......................................................do hereby assign the money payable in the event
of my death by the New I#'i* Assurance Co. Ltd. to....................................,.. (Name & relation to the nsured)
Dated this____...........day________200______at________
Withness 1,
Name:
Z Address Signature ot Proposer
HTo BE COMPLETED BY NSURANCE COMPANY) ' ~"~~~
SPECIAL CONDITIONS : insurance cover herein applies to section Nos------..............above, in wtthness where of signed
by & on Behaif of the company.
FOR THE NEW fNDA ASSURANCE CO. LTD.
Duly Constituted Attorny
OFFICE ADDRESS>
DATE>
@
policy a number o? contingencies which are otherwise covered separately the policy covers as under
SECTON f :(A) BULOiNG OF CLASS 'A' CONSTRUCTON ONLY & (S) CONTENTS
Against Fire , lightning, explosion of gas in domestic appliances, bursting and overflowing of water !ank, apparatus of pipes, aircraft or
articles dropped therefrom, riot and strike. Earthquake (Firs and or shock), malicious act, flood, inundation, strom, cyclone, subsidence and
landslide inducing rocksiida damage, impact by any raif/road vehicle or animal.
CLASS 'A' CONSTRUCTON ; Building shaH have external waii (s)Stone/Bric*s/Concrets block/Asbestos Sheets Cladding and/or Meta!
Sheets Cladding/ Glass Pane!,' Party or fuliy open sided and roof of R. C. C. Masonry ! Asbestos Concrete Shsets/MeEal Gheets/ Tiles.
Wooden Shingles or Boarding on R, C-C,/ Steei/Wooden frame-work.
N.B. 1. Thin layer of grass, hay, or reeds on incombustible roofing is permitted,
;, Us of Thermosetting resin fibre glass reinforced sheets is premitied for Skylights.
SECTON f!: BURGLARY, HOUSES^KAKiNG, LARCENY ORTHEFT: Loss or damage to property contained in !hs premises oa^pied
by ihe insured, jf proposer desires to specifically insure items of Jewellery and Vaiuabies under Section No. li ft wi'i be necessary for him to
insure such items of jeweftery and Valuables under Section (8}aiso, so that ihs sum insured under section j (B)ancl ii would &e identical.
SECTON ill: ALL RSKS : Jewellery and Valuables against Joss or damage by accident or misfortune whilst any where in !ndia subject to
limits of liability specified i% the scnedu-'e
SECTON V : PLATE CLASS : Fixsd p'sie glass against accidental damage subject to iimit of liability specified in the schedule
SECTONS V S3AXr*CWN OF DOMESTC APPLANCES : Damage caused by and/or soiey due So mechanical and/or eiectncai break-
,:^;'Hic or mechanical appiicances.apparatus or gadgets. . , ,,5 damage to Television se! by fim, ligthing,
explosion of gas in domestic appliances, Crusting and overflowing
', ...............-,.--,-.5 i,ia!-, rtpii riffccies dropped therfrorn, earthquake. Fir and/or snack, flood nundation. Cyione and fike Per sis.riot strike or
.-.jiiicKLLs'i act burglary or house-breaking or theft accidental extefnal means and mechanical or electrical breakdown. Legal liabilities to
n*:.,??;000/and damage to snsured's own property due to collapsed (i Antenna upto Rs. 3000/-
,.;-,-.. ,-.-,, ,'< y,~.~,. -.- -. - -^ . ._oss or Carnages ck'S to fire, lighting, external explosion, riot and strikes or malicious act, earthquake fire :
-'j-m, cyclone and other like penis, burglary, houebreaking and/or thsfr and/or external accident,also legal
*-HANCH!$iE ; Tfr$ isrsi Rs. 10A is not payable for each and every loss but the company will be fia&ie for loss in fui! f ii exdeeds Rs.tO/-
SECTON Vlli : BAGGAGE NSURANCE;: toss or damage to insured's accompanied Baggaga by accident or misfortune whilst the insured
s iravofhng on Sour or holiday Anywhere in ndia.
SECTON X : PERSONAL ACCDENT: DeaHi or bocis'y injury by accideniai, violent, external and visible means fo the insured persons
named in the scfieduJe and subject to fimils as specified in fne schedule.
Table of benefits under section number X Personal Accident are as under.
Benefits Benefits Table Benafits Ri sks Group
No. Covered 1 11 H
1. Death only 100%olC D 1 0.45 0.5/1 0.80
2. Loss of Two iimbs Two Eyes or
one limb and one eye 100% o) CSi
3. Loss of one îmb or one eye S0%
of CS
4, Permenant Totai Disablement from injuries other than =. no 4 0.70 080 1.30
named above (P.T.D.) 100% of CSi
5. Permenant Partis! Disablement B StoS 1.00 1.25 1 . 75
% as per schedule of the policy
a Temporary Total Disablement (T.TDi01%OF CSi upto A toS 1.SO 2.00 3.00
too week!; (maximum weekly benefit not exceeding
RS. aooo.'-i
Classification of Risks : The FA. Risks are divied into three groups as details bsiow (Applicable to individual risks or 'named person' s
functions. Persons pri marily engaged in occupations of similar hazard.
RSK GROUP f: Builders. Contraclois and Engineers engaged in superintending functions only, Veterinary Doctors, paid drivers of motor
cars and light motor vehicles and persons engaged I% occupations of similar hazard and not engaged in manual labour. AN personsengaged
in manual labour (Expect those failing under Group l!i)Cash Carryping Empl oyees, Garage and Motor Mechanics. Machine Operators,
Drivers of (fucks or lorries and other heavy vehicles, Professional A!h!et0s and Sportsmen, Woodworking Machinists ane Persons engaged
in occupations of simitar hazard.
RiSK GROUP Iff: Persons working in underground mines, explosive, magazines, workers involved in electrical installation with high tension
suppl y jockeys, Ci rcus personnel , Personnel , Persens engaged i n acti vi ti es li ke raci ng on wheel s or houseback, bi g game hunti ng
mountaineering, winter sports, skiing, ice hoskay, baiiooning, hand gliding, river ratting, polo and persons engaged in occupations/ activities
of similar hazard.
ADDTONAL COVERS
t, Medical Expenses {arising out of an accident) upto 10% of the capital Sum nsured or 40% of the admissible clai m whichever is
lower, at additional premium 20% of basic premi um.
810) Actual expenses in respect of carriage of dead body (due to accident) of the insured fo the piace of his/her residence, subject
to a
maxi mum of 2% of the C.SJ, Rs, 2500/- whichever is lower.
811) Eduction grant is payable n the event of deafh or permament total dfsablement of the nsured Person:
812) One dependent child below 25 years of age 10% of CS subject io maxi mum of Rs. 5,0007-
813) More than one dependent child below 25 years of age 10% of CSS subject to maxi mum of Rs.10,000/-
4. Family Package Cover as under @ 1 o% discount:
814) Earning Member (Person nsured and spouse) if earning 100%
of CSi each.
815) Spouse (it not earn<ng) 50%
of CSi orRs.1 takh whichever is.lower.
816) Children (Age of 5 to 19 years) 25%
of CS or Rs. 50,000/- whichever is tower per child.
NOTE ; 1 For children the cover will be li mited to Benefit 1 to 5
SECTtQN-X : PUBLC UABiLTY: nsured's legai febiiity for bodily injury (o or ioss of property of third party limited to amount specified in the
schedule and Workmen's Compensation liability to domestic servants engahed in the insured permises,
MtNl MUMTHRES COVERS COMPUt SORY NCLUDNG SECTON ' B' JS COMPULSORY
GROUP DSCOUNT
Where more than 4 upto 6 Sections (including tariff rated sections) 15%on Non-Tariff rate onry
Where more than 8 Sections (including tariJf rated sections) 20% ~do-
RfSK EXCKPTED: (illusfralive &not Exhaustive) The Policy does not cover inter aiia loss damage by war civil war and the like depreciation,
wear and tear, consequential toss etc.
The foregoing is only broad indication of the cover offered and eor rurther details please refer to any Office of the Company
(Regd. & Head Office: New ndia Assurance Building, 87 M. Q. Road, Fort, Mumbal 400 001)
Cl*i8 For8 All Risfc nsurance
(The issue of this form is not to be taken as admission of liability)
Answer all questions fully
nuflication
Phone Fax
E-mail
ce
did you last see the missing
at what hour did you first or
damages?
culars must be given) the of the
loss or damage
age estimated cost of repairs.
premises where it can be
9. Have you informed the Police Authorities? !f
so, when and where {Attach copy of F, , R.)
1 Q, Are you the sole owner of the property |
damaged or stolen?
j 11, Are there any other insurance upon the same j
property? f so, give full parbcuiars.
12 Havs you ever before sustained loss of the
same nature? f so, Give particulars.
the above named do declare and set forth that at or about
and more particularly described in the iist lodged $im the company, weê _
myself/ourselves has/have an nterest in the said property by 6 of Sale, or as Owner, Mortgage Trustee,
or otherwise, and that there is no further insurance
exeeptasabovemeritioned.inthisCampanyoranyotherc^ ______,_,_________
Witness my/our hand this______________,_...__.. day of_________________20
Witness Signature Name
Signature of nsured
nedSor
" aw
tem No. in the iist
attached to the policy
REMARKS
SHVA/1000/11 -2001
1. Name of insured
On -><*ton ,1
"ol i cyNo s I Period
01 hsurence
| proporty?
, the articles enumerated above and overleaf
-and i /We do further decl are that no ot her parson than
it 11 (iscellaneous Insurance
F. No. AC-,-
Policy No. B.P.
Period -------
Claim No._____
D.O._________
r 411 004.
The Ne0 I#'i* A""!r*#e Co8(*#$ Li8i+e'.
Regional Office: Sharda Centre, Karve Road, Pune -411 004.
THE SSUE OF THS FORM S NOT TO BE TAKEN AS AN ADMSSON OF LABLTY
ANSWER ALL /UESTIONS FULLY
Name of nsured in full :
Address
Occupation
;a) Full address of Premises broken into . . . .
i'b) The day and dour trie premises were broken into
. . . . (c) How the entrance was effected
. . . .
r
d) Which rooms were entered
. . . .
vVhether the premises were inhabited at the time
of Burglary . . . . ii>) f not, for
what periods have they been . . . . uninhabited
since the last premium was due
. . . .
\vhen did you inform the Police Authorities of ihe theft and
at which Station ? . . . .
VVhether you are the sole owner of the
p
roperty
stolen? . . . .
/,6s the estimated value of the total contents of the
premises at the time of
:
he Burglary
. . . .
:
or what sum you insure the contents against fire and with
what company. . . . .
Are there any other insurances against Burglary upon
the same Property ? f so give nil particulars.
. . . .
Rs , . . .in the ............... insurance Company Policy No ...................
. . . . [n u .. . . . . n;uFct{fi,i.- v*uinpiny rmtuy ivu.
.Vhetfier you havs ever before sustained oss by fire or
Burglary ? f so give jarticulars.
. . . .
/We the above named being insured under the above Policy do hereby declare and set forth that at or
,!____________O'clock a.m./p.m. on the----------------------------day of-------------------------20 a t hef t
;ommitted at the above described Premises in the manner stated and the articles enumerated in the
i list and valued at sum of Rs.----------------------------were stolen therefrom and /We do further declare
o other person has any interest in the said property, whether as Owner, Mortgagee, Trustee or'otherwise,
hat it is not otherwise insured against Burglary, with this or any other Office, except as above stated.
Witness my hand this______________day of________________20
.ss_______________;___________________ Signature of nsured
________________
;pation_______________________
.Address -
817)T
Unit 11 Under#ritin and Claims
11.C )ROCESS OF UNDER1RITING
The under#ritin process has se$eral aspects #hich may be broadly classi!ied as !ollo#s@
9a: TGe 5r&'!cti&n &4 a Cell 5rea' an' a lar:e v&l!3e &4 F!ine:
Insurers increase their premium so that they #ould obtain a certain ro#th rate o$er
a period o! years. %o#e$er" !or controllin loss and earnin a reasonable rate o!
pro!it" it is necessary that the premium is distributed class,#ise as #ell as eoraphically.
One class o! business may produce pro!its #hereas another may sho# losses.
There!ore obtainin business in as many classes o! ris0s and in as many areas as
possible #ill ha$e the result o! a$erain out the o$erall results. Thus insurers see0 to
#rite business in all classes o! insurance , !ire" marine" miscellaneous" enineerin
etc. Lare $olume o! premium and a #ide distribution" class #ise and eoraphically
is also called as 4a balanced port!olio4
9b: TGe electi&n &4 tGe F!ine:
2ll the in!ormation athered throuh the proposal !orm is scrutini&ed and analy&ed to
decide #hether to accept the ris0 at standard rates and terms or to chare any extra
premium or some conditions or to re?ect the ris0. .uccess!ul under#ritin depends
upon 0no#lede and experience. 2 thorouh 0no#lede o! $arious ha&ards to #hich
the property and persons are exposed helps in acceptin or re?ectin the ris0s. In
some cases proposal may be accepted sub?ect to certain special conditions li0e <excess<
lause or the co$erae may be restricted.
'
or example" !or old commercial $ehicles only third party co$er may be i$en instead
i! a comprehensi$e 9pac0ae: co$er.
!ri TGe 4i>in: &4 retenti&n:
Retention is the amount #hich the insurer is capable o! bearin !or its o#n account
#ithout causin any strain on it<s !inancial position. This amount is also 0no#n as Jnet
li3itJ or net G&l'in:. The amount o! retention is !ixed a!ter ta0in into account the
maximum amount o! loss the insurer is prepared to lose on any one ris0 in a particular
lass and the maximum probable loss 9(PL: expected on this ris0. 2n indi$idual
ee0s insurance because he !ears that a hea$y loss may ruin him !inancially. The
isurer too !ears that too hea$y a loss in any one ris0 may cause a se$ere strain on his
mds. There!ore he ta0es the step o! limitin his liability by !ixin the retentions and
insurin the surplus.
Property Y Liability Insurance
The !ixin o! retention re*uires thorouh 0no#lede o! ha&ards and experience. The
eneral !actors on #hich the amount o! retention depends is@,
J The !inancial status o! the insurers
J The total premium income o! the insurers
J The premium in the particular class.
K'E TGe rein!rance &4 tGe !r5l!:
Reinsurance is an arranement #hereby an oriinal insurer 9called direct insurer XW:r ?
the cedin company: trans!ers a part o! the ris0 to another insurer 9called reinsurerO:" \
In other #ords" reinsurance is an arranement #hereby an insurer #ho has acceptedO
the insurance trans!ers a part o! the ris0 to another so that his liability on any one ris0 X
is limited to a !iure #hich is proportionate to his !inancial capacity. Reinsurance is an
extension o! the basic principle o! insurance" i.e. to spread the losses o! the 4!e#4
o$er the 4many4. Reinsurance helps #ider distribution o! ris0" limits the liability o! the
insurer and also brins stability in under#ritin o$er a period.
)hereas the ob?ect o! under#ritin is to ma0e a reasonable pro!it" it is e*ually essential
that the business ceded to reinsurers also i$e them a marin o! pro!it. There!ore" the
o$erall *uality o! business accepted by direct insurers is important !or success!ul
under#ritin.
18.$ UNDER1RITING DOCUMENTS
Proposal !orm
Co$er note
Policy
Certi!icate o! Insurance
3ndorsement
Rene#al notice
)e shall see each o! these documents in detail to 0no# their importance in issuin a policy"
)RO)OSA* FORM , The proposal !orm is a printed *uestionnaire used !or ma0in an
application !or insurance co$er re*uired. The proposal !orms are desined to eliciull
material in!ormation about the ris0. It is also an application !or premium *uotation. Huestions
Unit i 1 Under#ritin and Claims
depend upon the type o! insurance souht. In marine caro insurance" it is not the practice
to use a proposal !orm" althouh sometimes it is usual to obtain a *uestionnaire or a
declaration !orm duly completed. Proposal !orms are used !or marine hull insurance.
The 1RD2 reulations pro$ide that the policyholder shall i$e in!ormation souht by the
insurer and also other in!ormation #hich the insurer considers as ha$in a bearin on the
ris0.
There are some *uestions common to all proposal !orms #hich can be summari&ed as
under@,
i: Proposer<s name in !ull@ Ob$iously this is re*uired !or purposes o! identi!ication. I!
any other interest is souht to be insured" !or example" mortaes" ban0 interests"
etc" this must be stated.
i:: Proposer<s address@ This is also re*uired !or identi!ication.
Proposer<s pro!ession" occupation or business@ In some cases li0e the personal accident
insurance" this has a material bearin on the ris0.
d: Particulars o! ris0@ /ull description o! the property to be co$ered. /or example" in !ire
proposal !orm details li0e ae in yrs." class o! construction" details o! contents to be
co$ered etc. #hereas in motor insurance proposal !orm particulars o! $ehicle li0e"
Reistration no. year o! manu!acturin" place o! reistration etc.
insurance history@ The proposer is re*uired to state #hether he #as insured pre$iously
or is currently insured #ith another insurer" i! so the names o! the insurers. The proposer
is also re*uired to state #hether any insurer had declined his proposal" imposed
special conditions" re*uired an increases premium at rene#al or re!used to rene# or
cancelled the policy.
Claim history@ This re*uires the proposer to declare !ull details o! losses su!!ered by
him #hether or not they #ere insured. Insured is re*uired to state the claims reported
by him on the pre$ious year policies also.
.um insured@ This is the sum !or #hich the sub?ect matter is co$ered. This is the
maximum limit o! liability under the policy and has to be indicated in all proposal
!orms.
.inature o! the insured.
In addition to these eneral *uestions there are special *uestions dependin upon the class
o! insurance" e.. In motor insurance special *uestions relate to the $ehicle li0e $ehicle
number" chassis number and enine number etc. In personal accident" special *uestions
relate to the person to be co$ered li0e monthly earnin" physical de!ects" i! any" ae"
pro!ession etc.
The purpose o! the proposal !orm is to pro$ide all material in!ormation to the insurers.
Jg'i Activity A:
Ta0e a copy o! personal accident proposal !orm. 2s0 your !riend to ans#er all the *uestions
and complete all the details in the !orm. .tudy the details care!ully. Do you thin0 that the
proposal can be accepted' I! yes" #hich terms and conditions should be imposed'
CO-ER NOTE , It is a document issued in ad$ance o! the policy" issue o! #hich
may entail delay !or #ant o! inspection report and pendin determination o!
rate actually applicable. Co$er note pro$ides a temporary or pro$isional co$er
e$idencin the protection ranted. The contents o! co$er note are the same as those
contained in the policy except that the latter #ill sho# actual premium and has
number. 2 co$er note also e$idences contract o! insurance. The insured may sue on
it. Co$er note is an unstamped document. (arine co$er notes are normally issued
#hen details re*uired !or the issue o! the policy such as name o! the steamer"
number o! pac0aes or exact $alue etc. are not 0no#n to the insured. In motor
insurance co$er notes are issued !or ne# $ehicles !or the purpose o! reistration.
The co$er note is made sub?ect to special clauses i! applicable" li0e the 2reed +an0
Clause.
)O*ICY , The document e$idencin the insurance contract is the insurance policy.
These are the stamped documents. In !ire and accident policies the stamp duty
is borne by insurer and in marine by insured. The policy #ordin !or !ire and
(isc. is prescribed by Tari!!. /or policies o$erned by (ar0et 2reement"
#ordins are standardi&ed" insurer are oblied to use these #ordin.
Contents o! a Policy are
1. %eadin , 8i$in the insurers name and address o! reistered o!!ice.
a: b:
Anit 11 Under#ritin and Claims
1. Preamble , This section introduces parties to the contract i.e. Insured and insurers. It
also re!ers to the premium paid by the insured.
I Operati$e clause , This clause speci!ied perils insured under the policy and the
circumstances in #hich the insurer #ill become liable to ma0e payment to the insured.
J0 3xclusions , The perils #hich are speci!ically excluded !rom the insurance are
mentioned in this clause.
1 .chedule , This section contains all the type#ritten in!ormation applicable to the
particular contract. /or example" name" address" policy number" date o! issue etc.
L 8eneral conditions , 3xpress conditions #hich pro$ides !or cancellation o! policy"
timely noti!ication o! loss to the insurers etc. are mentioned in this clause.
B )arranties , The express #arranties may be printed on the policy or attached to the
policy in separate !orms. /or example" in marine insurance 4 )arranted that the
oods are pac0ed in double unny bas.4
C3RTI/IC2T3 O/ IN.UR2NC3 , (otor and (arine departments issue certi!icates
o! insurance. Under the (otor ;ehicles 2ct" a certi!icate o! insurance is re*uired to be
issued in addition to the policy. The (otor ;ehicles 2ct pro$ides that the policy o! insurance
shall be o! no e!!ect unless and until a certi!icate o! insurance in the !orm prescribed under
the Rules o! the 2ct" is issued. The only e$idence o! the existence o! a $alid insurance as
re*uired by the (otor ;ehicles 2ct acceptable to the police authorities and R.T.O. is a
%cate o! insurance issued by the insurers.
trine insurance" certi!icate o! insurance are issued to pro$ide e$idence o! co$er on
shipments insured under caro open co$er or !loatin policies.
3NDOR.3(3NT , It is the practice o! insurers to issue policies in a standard !orm"
co$erin certain perils and excludin certain others. I! it is intended" at the time o! issuin
,tlicy to modi!y the terms and conditions o! the policy" it is done by settin out the
ition in a memorandum #hich is attached to the policy and !orms part o! it. This
orandum is called an endorsement. 3ndorsements are issued under the !ollo#in
instances.
Chane o! insured<s address
)hen ris0s are to be added Bdeleted
819))hen co$er re*uires cancellation
820);ariation in sum insured
821))hen loss amount is to be reinstated
822)Chane o! insurable interest by #ay o! sale" mortae etc.
823)I! ris0 period is to be altered
h: Chane o! ris0 li0e construction" occupation in !ire insurance.
/or example" the endorsement #ordin !or Trans!er o! Insurable Interest under a (otor
policy #ill be as i$en belo#.
4IT I. %3R+I UND3R.TOOD 2ND 28R33D T%2T 2. /RO( ...B..B ...... T%3
INT3R3.T IN T%3 POLICI I. trans!erred TO 2ND ;3.T3D IN ............
O/ .................. C2RRIIN8 ON OR 3N8283D IN T%3 +U.IN3.. OR
PRO/3..ION O/ .............. )%O .%2LL +3 D33(3D TO +3 T%3 IN.UR3D
2ND )%O.3 PROPO.2L 2ND 2CC3PT2NC3 D3CL2R2TION D2T3D ....B....B
.....%2LL +3 D33(3D TO +3 INCORPOR2T3D IN 2ND TO +3 T%3 +2.I. O/
T%I. CONTR2CT.
PRO;ID3D 2L)2I. T%2T /OR T%3 PURPO.3 O/ T%3 NO CL2I( +ONU.
NO P3RIOD DURIN8 )%IC% T%3 INT3R3.T IN T%I. POLICI %2. +33N
;3.T3D IN 2NI PR3;IOU. IN.UR3D .%2LL 2CCURU3 TO T%3 +3N3/IT
O/ ...........
.U+A3CT OT%3R)I.3 TO T%3 T3R(." 3UC3PTION." CONDITION. 2ND
LI(IT2TION. O/ T%I. POLICI4
2cti$ity + @
Dra!t suitable endorsements !or the !ollo#in@ 1 :
Increase in sum insured under a !ire policy.
824)2ddition o! employees under a personal accident policy.
825)To add the name o! a ban0 !or hypothecation under a motor policy.
826)To chane the address under a (ediclaim policy.
< nit 11 Under#ritin and Claims
K: To add the +ill o! ladin no. and date under a marine policy.
R3N3)2L NOTICE , 2s a matter o! business courtesy and healthy practice" insurers
ad$ise the insured o! the !orthcomin rene#al. The notice also incorporates a #arnin
about the duty o! disclosure o! in!ormation concernin alterations in ris0 and reiterates the
statutory re*uirement !or ad$ance payment o! premium and that the sum insured is re*uired
io represent current mar0et $alue. It is not mandatory on the part o! insurer to send Rene#al
Notice" but it is done as a esture o! ood business practice and ood#ill.
18.; AS)ECTS OF C*AIM SETT*EMENT
S M
r
The processin and settlement o! claims is one o! the important !unctions in an insurance
oranisation. Indeed" the payment o! claims may be rearded as the primary ser$ice o!
insurers to the public.The settlement o! claims has to be prompt as #ell as !air. It is also
necessary that the personnel handlin claims must ha$e the personal *ualities o! patience"
tact" diplomacy and courtesy.
The settlement o! claims in$ol$es examination o! the loss in relation to the co$erae under
ihe policy and compliance #ith policy conditions and #arranties.
The 4irt a5ect to be dealt #ith is #hether the loss is #ithin the scope o! the policy. The
leal doctrine o! proximate cause pro$ides uidelines to decide #hether the loss is caused
by an insured peril or an excepted peril.
The ec&n' a5ect to be decided is #hether the insured has complied #ith policy
conditions" especially conditions #hich are precedent to <liability<. These conditions relate
to i mmediate noti!ication o! loss to the insurers" submission o! proo! o! cause and extent o!
loss" pro$idin assistance and cooperation to the insurers in reco$erin losses !rom third
parties" or others responsible !or the loss.
The tGir' a5ect is in respect o! compliance #ith #arranties. The sur$ey report #ould
indicate #hether or not #arranties ha$e been complied #ith. Insurers" ho#e$er" ta0e a
liberal $ie# #hen the breach o! #arranty is purely o! a technical nature and is not in any
#a$ connected #ith the cause o! loss or the extent o! loss.
TGe 4&!rtG a5ect relates to the examination o! the obser$ance o! utmost ood !aith by the
proposer be!ore the conclusion o! the contract" and i! pro$ided by policy conditions" durin
the currency o! the policy. 3specially on the occurrence o! a loss the insured is expected to
act as i! he is uninsured. In other #ords" he has a duty to ta0e measures to minimise the loss.
TGe 4i4tG a5ect concerns the determination o! the amount payable. The amount o! loss
payable is sub?ect to the sum insured. %o#e$er" the amount payable #ill also depend
upon the !ollo#in@
827)The extent o! the insured<s insurable interest in the property a!!ected.
828)The $alue o! sal$ae.
829)2pplication o! pro,rata a$erae.
830)Deduction !or any excess or !ranchise.
831)2pplication o! contribution and subroation conditions.
TGe i>tG a5ect relates to the resolution o! disareement bet#een the insurers and the
insured. The ma?ority o! property and liability policies incorporate an 2rbitration condition
to resol$e disputes reardin the amount o! loss" the liability bein admitted under the
policy. I! *uestion o! liability are in$ol$ed" the matter has to be settled throuh a court o!
la#. In marine policies" there is no arbitration condition.
The 4inal a5ect deals #ith reco$ery !rom third parties under subroation procedins"
!rom re,insurers and !rom co,insurers.
The claims #hich are dealt #ith under insurance policies !all into the !ollo#in cateories.
Stan'ar' Clai3: These are claims #hich are clearly #ithin the terms and conditions o!
the policy. .ettlement o! these claims presents no di!!iculty.
N&n6tan'ar' clai3: These are claims #here the insured has committed a breach o!
condition or #arranty. The settlement o! these claims is considered sub?ect to certain rules
and reulation !ramed by the insurance companies.
E>6:ratia 5ay3ent: These are losses #hich !all outside the scope o! co$er under the
policy and hence are not payable. %o#e$er" in $ery special cases" to a$oid hardship to the
insured" settlement o! these losses is considered as a matter o! race. /or example" due to
enuine o$ersiht" a certain item o! property is not included in the insurance althouh it #as
the intention o! the insured to include it.
3x,ratia settlements are ne$er made on the basis o! the !ull amount o! the loss. 2 certain
percentae only is paid. 2lso such claims are paid 4#ithout precedent4 so that the insurers
do not ha$e an obliation to meet similar claims in !uture.
18.( C*AIM SETT*EMENT )ROCEDURE
Notice o! losses b:
In$estiation and assessment
2ppointment o! sur$eyors d:
.ettlement o! claims
Loss minimi&ation
a"i N&tice &4 l&
Policy conditions usually pro$ide that the loss be intimated to the insurer immediately.
The purpose o! an immediate notice is to allo# the insurer to in$estiate a loss at its
early staes. Delays may result in loss o! $aluable in!ormation relatin to the loss. It
#ould also enable the insurer to suest measures to minimi&e the loss and to ta0e
steps to protect sal$ae.
Under certain types o! policies 9e.. accident to commercial $ehicles" +urlary" the!t
o! entire $ehicle etc.: notice is also to be i$en to police authorities. Police papers
li0e" panchanama" ?a#ab o! dri$er" statements o! passeners" chare sheet etc. not
only con!irm date" time and place o! accident but also i$es details o! dri$er and
passeners #hich help in !aster settlement o! claims. In case o! burlary claims police
ntimation is necessary as the police dept. #ill try to trace the culprit. /irst in!ormation
eport and the /inal In$estiation report issued by the police authorities is the basis o!
ettlement o! a burlary or the!t claim.
:n receipt o! intimation o! loss or damae insurers chec0 that@
X: the policy is in !orce on the date o! occurrence o! the loss or damae>
ii: the loss or damae is by a peril insured by the policy>
iii: the sub?ect matter a!!ected by the loss is the same as is insured under the policy>
$: notice o! loss has been recei$ed #ithout undue delay.
2!ter this chec0 up the loss is allotted a number and entered in the claims reister. 2
separate !ile is opened !or the claim and a claim !orm is issued to the insured. The
claim is no# ready to be processed.
FE Inveti:ati&n an' ae3ent
On receipt o! claim !orm duly completed !rom the insured" the insurers decide about
in$estiation and assessment o! the loss. The in$estiation o! bi claims is entrusted to ?
independent sur$eyors #ho are specialists in their line. The practice o! assessment o!
loss by independent sur$eyors is based on the principle that since both the insurers
and the insured are interested parties" the opinion o! an independent pro!essional
person should be acceptable to both the parties as #ell as to a court o! la# in the <
e$ent o! any dispute. In personal accident claims" under policy conditions the insurers
reser$e the riht to arrane an independent medical examination. (edical e$idence is
also re*uired in support o! #or0men<s compensation claims. Li$estoc0 and cattle
claims are assessed on the basis o! the report o! a $eterinary doctor. t"
Third party claims in$ol$in personal in?uries are assessed on the basis o! medical
opinion> those in$ol$in property damae are assessed on the basis o! a sur$ey report. T
In either case leal opinion is souht to decide #hether any liability at la# attaches to the
insured.
In$estiation is di!!erent !rom the assessment o! loss. In$estiation is done to ensure
that the insurable interest is present and also to con!irm that there is no suppression or
misrepresentation o! material !acts" deliberately creatin the loss etc.
cE A55&int3ent &4 !rvey&r
2s per IRD 2 reulations .ur$eyors are ranted license to conduct sur$ey in /ire"
(arine caro" (arine %ull" 3nineerin" (otor" (iscellaneous and loss o! pro!its.
The reulations also pro$ides !or cateori&ation o! sur$eyors into three cateories 2
+ Y C based on pro!essional *uali!ication" trainin underone and experience. Insurers
allot sur$ey #or0 accordinly. /or example" ma?or and complicated losses may be
entrusted to Cateory 2 .ur$eyor.
In (arine claims" 8eneral 2$erae losses are assessed by specialists $i& 2$erae
2d?usters. Other losses e.. total loss or partial loss etc. is assessed by the (arine
sur$eyors.
'E Settle3ent &4 clai3
The claim is processed on the basis o!@
9i: the claim !orm
9ii: sur$ey report
9iii: $arious document submitted by the insured<
9i$: any other e$idence secured by the insurers.
I! the claim is !ound to be in order" payment is made to the claimant and entries made
in the record. Claims !or Total loss on $ehicles sub?ect to %ire purchase areements
are paid to !inanciers. I! the property insured is mortaed to a ban0 under a !ire
policy" then accordin to 2reed +an0 clause" claim monies are paid to the ban0.
(arine caro claims are paid to the claimant #ho produces the marine policy duly
endorsed in his !a$our.
e: *& 3ini3iLati&n
There is a duty on the insured to obser$e ood !aith durin the currency o! the policy
also especially #hen a loss occurs. The duty o! ood !aith re*uires the insured to act
as i! he is uninsured. )hen the loss occurs he has to do his utmost to minimise the
loss. /or e.. Insured has to ta0e steps to sa!euard the motor !rom !urther loss or
damae. 2!ter the accident insured should not lea$e his $ehicle unattended #ithout
proper precautions bein ta0en to pre$ent !urther damae or loss
In addition to conductin the sur$ey and submission o! the report" sur$eyors also
ha$e a role in loss minimi&ation and protection o! sal$ae. In !ire losses !or e..
.ur$eyors may recommend measures such as remo$al o! cloed material !rom
machinery so that production process is not interrupted" remo$al o! undamaed
property to places o! sa!ety etc. .ur$eyors also contribute to loss minimi&ation in
other areas li0e durin motor sur$ey or (arine sur$ey also.
11.6 C*AIM DOCUMENTS
1 Policy copy
Claim !orm
sur$ey Report
Other documents
Dischare $oucher
)e shall see each o! these documents in detail to 0no# their rele$ance in prompt settlement
o! claims
POLICI COPI@ Policy copy is $eri!ied to see #hether the policy is in !orce and #hether
the sub?ect matter co$ered under the policy is the one #hich has su!!ered a loss. In a
(otor policy" sub?ect matter is the $ehicle co$ered under the policy. 2ll details o! the
$ehicle li0e" Reistration no" 3nine no. and Chassis no." seatin capacity" C.C. O! the
$ehicle are $eri!ied by the .ur$eyor also !or identi!ication o! the $ehicle #hich has met #ith
an accident.
It is also necessary to $eri!y the sum insured on the policy. In case o! motor Insured
I.D.;.9insured<s Declared ;alue: O! the policy is $ery important !or the loss assessment.
)hether the claim is to be settled on Total loss basis or on Repair basis #ill depend upon
the I.D.;. /or #hich the $ehicle is insured.
In !ire insurance i! the sum insured is not ade*uate" condition o! a$erae #ill apply. In
addition to the sum insured" extensions or 2dd,on co$ers i! any #ill be #ill be clear on
$eri!ication o! the policy.
In Personal 2ccident policy #hile assessin the loss it is necessary to 0no# #hether the
insured has opted !or medical expenses extension. .imilarly in case o! roup (ediclaim
policy (aternity claim #ill be payable i! the additional premium !or maternity bene!it
extension is paid by the insured.
;eri!ication o! policy #ill also re$eal any special conditions or #arranties that are imposed
on the policy.
CL2I( /OR(@ )hen a loss is noti!ied under an insurance policy a claim !orm is issued
!or completion by insured. The contents o! the claim !orm $ary #ith each class o! insurance.
hi eneral" the claim !orm is desined to elicit !ull in!ormation reardin the circumstances
o! the loss" such as date" time" cause and extent o! loss. Claim !orms are not used in marine
caro insurance althouh sometimes" they may be used !or inland transit claims. The claim
!orm is desined to elicit the !ollo#in in!ormation@
832)Policy Number
833)Particulars o! claimant
nit 11 Under#ritin and Claims
: Date" time and place o! loss X i Loss
noticed by #hom I .ound ;alue o! property at
the time o! !ire !: 2mount claimed and sal$ae
$alue i Capacity in #hich claim made JJW
Dri$er<s details
Third party in?uries and damaes
Police report
: Other insurance in !orce" etc. Past
claims on the current policy
.SUR-EY RE)ORT: It is issued by a .ur$eyor holdin a license and #ho has been
ssined the tas0 o! loss assessment. Independent sur$ey is re*uired !or the motor losses
Dceedin Rs.17"777B,. /or losses belo# Rs. 17777B, sur$eys are conducted by in,house
ur$eyors. 2 sur$ey report pro$ides in!ormation reardin the cause and extent o! loss
nd also certi!ies compliance by the insured o! policy conditionsB#arranties. .ur$eyors
re no# controlled by IRD2. They are speciali&ed and independent persons in !ield o!
ire. marine" motor" 3nineerin etc. They are pro!essionals li0e (echanical 3nineers"
4i$il 3nineers etc. In respect o! claims #here documents o! 2ccounts are to be $eri!ied"
uir$eys are allotted to persons ha$in accountin *uali!ication li0e Chartered 2ccountants"
C)2 etc. .ur$ey report pro$ides in!ormation necessary !or the insurers !or processin
@iid settlement o! claims. .ur$eyors are assined the ?ob by the insurers on receipt o!
totice o! loss and claim !orm.
OT%3R DOCUMENTS , In addition to policy copy" claim !orm and sur$ey report
aiere are $arious documents re*uired to be submitted by the insured. These documents
$ary #ith each class o! insurance. They are as i$en belo#.
O /ire claims,i: Police
report ii: /ire +riade
report iii: Photoraphs
b: (otor Claims ,
i: &egi(t,)ti/% 2e,tific)te
This certi!icate is $eri!ied to 0no# the o#ner o! the $ehicle" enine no. and
chassis no o! the $ehicle etc.
ii: 3,i$i%g 4ice%(e
Dri$in license #ill state the classes o! $ehicle the dri$er is authorised to dri$e"
expiry o! license etc.
iii: 5it%e(( 2e,tific)te )%d 6e,!it
/rom these documents insurers #ill 0no# #hether the $ehicle is mechanically !it
and the route permit #hich the o#ner holds.
i$: 4/)d 27)--)%(
This document is re*uired to 0no# the load the $ehicle #as carryin at the time
o! accident. Insurers #ill 0no# #hether the $ehicle #as carryin load more than
the load capacity at the time o! accident !rom $eri!ication o! this document.
$: 6/-ice ,e8/,t(
Police reports i$e authentic in!ormation as to date" time" place o! accident and
the details o! con$iction o! dri$er etc.
Activity C :
2pproach nearest Ne# India 2ssurance branch o!!ice and as0 !or a settled (otor Claim
!ile. List the documents in the !ile.
.tudy the documents and #rite do#n the importance o! each document in settlin the
claim. Do you !eel that any other document #as re*uired to substantiate the claim'
nd
c: Personal 2ccident claims ,i:
2ttendin doctor<s report
This #ill re$eal the nature o! in?ury" treatment i$en" period o! treatment etc. ii:
In$estiation reports li0e U,ray" sonoraphy
These reports #ill support the doctor<s" report in respect o! extent o! in?ury
sustained.
in: Certi!icate o! proo! o! ae o! dependent child !or education rant
This is re*uired as education rant is i$en to dependent children i! studyin.
i$: (edical bills #here medical extension is ranted
(edical expenses are payable i! the medical expenses extension is opted !or.
Oriinal billsBcash memos and prescriptions are re*uired to substantiate the claim.
$: /itness certi!icate and employers certi!icate !or absence !rom duty
These certi!icates are re*uired !or i$in #ee0ly bene!it !or Temporary
Disablement claims. No o! days o! disablement !or #hich the insured is eliible
#ill be based on the 3mployers certi!icate and the !itness certi!icate issued by
the doctor.
$i:
De
ath
cer
ti!icate in case o! death claim.
$larine claims
i: In$oice
ii: Certi!icate o! loss issued by carriers
iii: Oriinal RRBnon,deli$ery certi!icateBconsinment note
i$: Copy o! claim loded aainst carriers
$: Letter o! subroation
$i: +ill o! ladin
$ii: .ur$ey Reports
$iii: Debit notes
ix: Copy o! protest
x: Lost o$erboard certi!icate
(arine claim documents are explained in detail in Unit 9L: , (arine Insurance
JS$ Activity D: List the common documents needed to settle a claim.
(ention the additional documents in addition to the abo$ementioned documents to settle@
834)Personal accident claim
835)/ire claim
836)(otor claim.
DISC%ARGE -OUC%ER , Insurer issue the che*ue in !ull and !inal settlement o! the
claim on receipt o! a $oucher duly dischared by all those named in the policy as <insured<.
Unii 11 Under#ritin and Claims
11.N SUMMARY

Under#ritin and settlement o! claims are t#o ma?or ser$ices o! an Insurance Company
#hich is a ser$ice Industry. Production o! lare $olume o! premium income and earnin o! a
reasonable amount o! pro!it on the insurance operations are the t#in ob?ecti$es o! under#ritin.
The process o! under#ritin in$ol$es se$eral aspects li0e, production o! #ell spread and
lare $olume o! business" the selection o! business" !ixin o! retention and reinsurance o! the
surplus. .uccess!ul under#ritin depends upon 0no#lede and experience. ;arious documents
are re*uired !or acceptance o! proposal and issuin o! policies li0e proposal !orm" co$e
note" certi!icate o! insurance" endorsements" rene#al notice etc.
The processin and settlement o! claims constitute one o! the most important !unctions in an
insurance orani&ation. .ettlement o! claims re*uires a procedure to be !ollo#ed !or !aster
processin and disposal o! claims. .ur$eyors and in$estiators are appointed !or assessment
and in$estiation o! the claims. They also help in loss minimi&ation and protection o! sal$ae. In,
house sur$eyors are appointed to conduct sur$eys #here the estimated loss does not exceed
Rs.17777B, ;arious documents are re*uired to be scrutini&ed !or prompt and !air settlement o!
claims. Claim settlin personnel should ha$e a thorouh 0no#lede o! the policy terms and
conditions and the rele$ance o! each claim document !or !aster settlement o!
claims.
18.. 0EY 1ORDS
3xtension o! policy by co$ers #hich are not there in the basic
co$er.
2 pro$ision inserted in a policy to de!ine" extend or reduce
rihts and responsibilities.
2 co$er note is a document issued in ad$ance pendin the
issue o! the policy" and is normally re*uired i! the policy cannot
!or some reason or other be issued straiht a#ay. Co$er notes
can also be issued durin the course o! neotiations to pro$ide
co$er on a pro$isional basis. 2 co$er note is not a stamped
document but is honored" all the same" by all parties concerned.
2 #ritten amendment a!!ectin the declarations" insurin
areements" exclusions" or conditions o! an insurance policy@
2 memorandum #hich modi!ies or alters the policy.
Ddd,7n C&ver
n'iti&n $er
N&te
i'&re3ent
E>6:ratia
:
)&licy
:
)r&5&al
:
)r&5&al F&r3
Un'erCritin:
Rein!rance
1arranty
2 payment o! claim out o! race" #here there is no leal liability
to do so.
The leal document issued by the company to the policyholder"
#hich outlines the conditions and terms o! the insurance> alsot
called the policy contract !or the contract
O
2 person interested in ta0in out insurance has to ma0e an
o!!er by means o! a proposal. This is an application !or the
co$er re*uired" or !or obtainin *uotations o! the premium
chareable.
It is a !orm #hich is to be completed !or securin an insurance
policy.
The process o! selectin ris0s !or insurance and determinin
in #hat amounts and on #hat terms the insurance company
#ill accept the ris0.
Insurance placed by an under#riter in another company to
cut do#n the amount o! the ris0 assumed under the oriinal
insurance. 2 system #hereby the oriinal insurer i$es o!! a
part o! the ris0 to another insurer.
2 statement concernin the condition o! the item to be insured
#hich is made !or the purpose o! permittin the under#riter
to e$aluate the ris0> i! !ound to be !alse" it pro$ides the basis
!or $oidance o! the policy.
1. (2TC% T%3 /OLLO)IN8
1. Co$er note 9 : a: Issuance o! che*ue
1. Dischare ;oucher 9 : b: (odi!ication can be carried out
C. 3ndorsement 9 : c: Unstamped document
5. (otor 9 : d: Reminder that policy is expirin
K. Proposal /orm 9 : e: Non tari!!ed business
L. +urlary
6 . Rene#al Notice
837) .ur$ey Report
838) Claim /orm
839) Loss experience
Fill in tGe Flan9:
i: 3$idence o! accident
: Tari!!ed business
h: O!!er o! insurance
i: Proposal /orm
?: Details about loss particulars.
840) . Po l i c i e s a r e s t a mp e d a s p e r -
841) " C o $ e r n o t e i s - d o c u me n t
to be issued as e$idence o! insurance
!or Police B R.T.O. 2uthorities.
5. 2n alteration in policies is done by-----------.
K. -------------------are not strict contracts o! Indemnity.
842)_____________________________________Independent sur$eyor is
appointed !or--------------------------------losses exceedin Rs.17"777B,.
843) 2 che*ue in the !ull and !inal settlement o! the claim is issued on
receipt o!
S" 3lucidate the *uestions as0ed in the Proposal /orm. )hat are the purposes behind
them'
" List out the important aspects o! co$er note. 2lso prepare a rouh dra!t o! motor
co$er note.
" 3xplain $arious heads under policy and their importance.
. )hat are the documents re*uired to be submitted by the insured !or processin o!
motor claims'
" 3xplain the need !or selection o! business in the process o! under#ritin. .
3xplain in detail the claim settlement procedure.
)hat is the duty o! the insured and the sur$eyor !or loss minimi&ation'
9I. )hat are the documents re*uired !or the settlement o! temporary disablement claim
under a personal accident policy'
C. (otor ;ehicle 2ct re*uires.
13.1 INTRODUCTION
In )ebster<s dictionary" the term 4liability4 stands !or 4responsibility4. There is another
term called 4leal liability4 #hich means responsibilities and obliation #hich are leally
en!orceable. The leal liability can be studied under t#o heads" #hich are@
844)Cri3inal liaFility: In this case" the implementin authority is the state and it results
into punishment !or the crime in the !orm o! !ines" or imprisonment" or both.
845)Civil liaFility: In this case" action is brouht by one party aainst the other accordin
to pre$ailin la#. It enerally leads to payment o! damaes or compensation to the
arie$ed party out o! these liabilities #e restrict our studies to ci$il liability as criminal
liabilities is sub?ect matter o! discussion at di!!erent plat!orm.
13.8 CI-I* *IA"I*ITY
Let us loo0 more closely at ci$il liability.
TaFle 13.1
Leal Liability
Ci$il Liability Criminal Liability

.tatute or Reulation Contract Tort

International .trict or 2bsolute Nelience
Civil liaFility may result #hen a person inter!eres" or alleedly inter!eres" #ith the rihts
another indi$idual" !amily" or orani&ation. The rihts may be set out in a statute or a
reulation" or in a contract" or they may be established throuh the la# o! torts. The party
#ho su!!ers the $iolation brins a claim or suit aainst the alleed #rondoer. To pro$e
ci$il liability" a preponderance o! the e$idence must sho# that an indi$idual did inter!ere
#ith the rihts o! another person" !amily" or orani&ation" i! !ound liable" the indi$idual is
enerally re*uired to pay damaes to the in?ured party.
i i i t 1C Liability Insurance ,1
/or example" the o#ner o! a as dealer is liable to pay compensation to persons su!!erin
in?ury.
One act may constitute both a crime and a $iolation o! another<s rihts and may result in
<4oth criminal and ci$il liability. /or example" #hen 2 punches + 9both are addled:" 2 has
Jmmitted a crime o! hate and has also $iolated +<s riht to be !ree !rom bodily harm.
i ms" 2 may be !ound liable under criminal and ci$il la#.
n indi$idual or !amily is exposed to both criminal and ci$il liability loss. 2 loss may occur
en i! the indi$idual or !amily is innocent o! the alleations or is not !ound liable. I! a claim
is !alsely made aainst a person" he or she may still ha$e to expend resources to !iht the
@laim and maintain his or her innocence.
$ 2cti$ity 2@ rite do#n t#o examples #here ci$il
liability arises.
he La# o! Torts
s sho#n in 3xhibit 1,1" ci$il la# establishes the rihts o! indi$iduals throuh statutes or
@ eulations" contracts" and the la# o! torts. +asically" a tort is any ci$il #ron other than
he breach o! a contract. It may be intentional or unintentional" and it may or may not result
ci$il liability aainst the tort!easor 9the party responsible !or committin the #ron:.
nintentional torts enerally result in liability aainst the tort!easor i! nelience the !ailure
exercise the deree o! care that a reasonably prudent person in a similar situation #ould
ercise is pro$en. To pro$e nelience" the party harmed by the tort!easor<s actions must
@io# he or she has su!!ered actual harm as a result o! the tort!easor<s !ailure to act in a
udent manner.
some cases" a person or orani&ation is determined to be liable in speci!ic circumstances"
.Gardless o! #hether that person or orani&ation has been nelient. This is re!erred to
as
. absolute liability. /or example" an employer is enerally responsible !or payin #or0ers
compensation bene!its !or in?uries an employee sustains #hile #or0in !or the employer"
\ reardless o! ho# the in?uries #ere caused and #hose nelience caused the in?uries.
)e shall no# loo0 more closely at the di!!erent types o! liabilities@
Sit!ati&nal S&!rce &4 *iaFility
8i$en the abo$e leal !rame#or0" any acti$ity or relationship that an indi$idual or !amily
ta0es part in" or any property that indi$idual or !amily o#ns or uses" may create a liability
loss exposure !or the indi$idual or !amily. The e$ents that may lead to payment !or in?uries
or damaes are as unpredictable as the dollar amounts in$ol$ed. .ome o! the more common
situations in #hich indi$iduals and !amilies may incur liability exposures are discussed belo#.
13.3 COMMON *IA"I*ITIES ______________________________________
91: )re3ie *iaFility
Occupyin real property carries #ith it the responsibility !or many e$ents that can
occur on the property. The !ollo#in are some o! the ha&ards 9characteristics o! a
situation that increase the possibility o! loss: associated #ith the o#nership or control ?
o! premises@
J 2ccumulation o! ice and sno# on side#al0s and steps
J Unrepaired side#al0s and steps or torn rus
J Unprotected s#immin pools or un!enced $acant land
J Careless smo0in
J Landscapin that causes #ater to drain on to neihbourin property
J^ Activity " #
(rs. Patel maintained a ood la#n in her arden" but it #as damaed due to the #ater
drain !rom the ad?acent bunalo#" alon #ith the !ood rains that she had 0ept on the !loor
o! the arden. .tate the liability in this case.
nit 1C Liability Insurance ,1
1: *iFel= Slan'er= an' OtGer Intenti&nal T&rt
2t times" indi$iduals may" #ith or #ithout malice" intentionally in!rine on the rihts o!
others such as the riht o! security o! reputation" the riht o! pri$acy" and the riht o!
en?oyment o! property. 3xamples in$ol$in intentional acts include the !ollo#in@
J In?urin a person<s reputation either throuh slander 9untrue oral communications
that cause harm to a person<s reputation: or libel 9untrue #ritten" printed" or
other#ise recorded communication that causes harm to a person<s reputation:
J The landlord<s enterin the leased part o! a buildin #ithout the tenant<s permission
J Causin loud noise at niht" thereby creatin a nuisance that in$ades a neihbor<s
peace and *uiet
^ Activity C :
$lr. Roy is the chairman o! the %ousin /inance Corporation. 2 ne#spaper published
that e has ta0en a bribe !or the sanctionin o! a tender o! cement !or a housin
scheme. Ir. Roy !iled a suit !or harm caused to his reputation. 8i$e your opinion on
this case.
3E E35l&y3ent &4 D&3etic
(any people hire domestic employees to do household chores and care !or
dependents. 2lthouh domestic employees relie$e their employers o! many o! the
burdens that o #ith carin !or the home" !or the children" or !or the elderly or the
handicapped" domestic employees also create liability exposures.
Indi$iduals and !amilies may be accountable !or in?uries sustained by domestic
employees in the course o! their employment. They also may be held $icariously
liable !or the actions o! their domestic employees #ho harm others.
Activity D :
8i$e t#o examples in #hich" due to the nelience o! the domestic employee" a liability
arises.

95: A!t& an' Recreati&nal -eGicle
The #idespread use o! and dependence on automobiles has created a complex
leal en$ironment !or auto o#nership and operation. 2lthouh dependence on
recreational $ehicles,motori&ed land $ehicles such as sno#mobiles" motor
homes" and dirt bi0es that are used !or personal recreation is not as reat as on
autos" recreational $ehicles create a liability loss exposure similar to that o!
autos. 2uto and recreational $ehicle liability loss exposures can arise out o!
o#nership and out o! the maintenance" operation" and use o! o#ned and no
o#ned autos and recreational $ehicles.
Personal liability !or damaes to pedestrians" other motorists" and property may
arise #hen indi$iduals carelessly operate any auto or recreational $ehicle.
3xamples o! accident,causin !actors include the !ollo#in@
J +ac0in an auto recreational $ehicle #ithout !irst determinin #hether the
#ay
is clear
J Dri$in at an unreasonable speed
J Disreardin a tra!!ic sinal
J Dri$in under the in!luence o! alcohol or drus
In most states" mere o#nership o! an auto or a recreational $ehicle enerally
does not ma0e the o#ner liable !or the nelient operation or use o! the
$ehicle by others. %o#e$er" some common la# and statutory exceptions to
this rule exist" #hereby liability may be imputed to the o#ner because o!
c
e
r
t
a
i
n
c
i
r
c
u
m
s
t
a
n
c
e
s
.
O
n
e

o
!
these exceptions is the la# in some states holdin the parent #ho sins a
minor child<s application !or an operator<s license leally responsible !or the
minor<s
\
1C Liability Insurance ,1
operation or use o! any auto. In some states" merely !urnishin an auto to a minor may
ma0e the parent or o#ner liable !or resultin damaes. O#ners o! autos may also be
$icariously liable !or operators #ho are actin as leal representati$es 9aents: !or
the o#ners.
2nother important exception that ma0es an o#ner liable !or the actions o! an operator
is nelient entrustment. Nelient entrustment occurs #hen the o#ner or other person
in control o! the auto entrusts the $ehicle to one #ho is uns0illed or other#ise
incompetent to operate it" such as a child. 8enerally" liability is imposed only #hen
the entruster 0no#s" or should ha$e 0no#n" o! the other person<s incompetence" and
an in?ury results !rom it. Liability may exist !or in?ury to the user as #ell as to others.
3xposures to loss can also arise #hen indi$iduals are trans!errin o#nership o! autos.
In some states" the seller o! an auto may remain liable !or any conse*uences stemmin
!rom the $ehicle<s use until the purchaser has the certi!icate o! title.
9K: 1atercra4t *iaFility
)atercra!t presents a liability exposure !or o#ners and operators" reardless o! location
or use. /or instance" a boat ro#ed to a launch area poses a liability exposure ?ust as
it does #hile na$iated in #ater or par0ed in a dri$e#ay. 2 person #ho operates a
boat can cause serious harm i! any o! the !ollo#in acts occur@
J Collidin #ith another #atercra!t
J .tri0in doc0s" boat sheds" and other property
J .tri0in s#immers or #ater,s0iers
2lmost anyone may operate a boat #ithout meetin ae" experience" or licensin
*uali!ications. Indi$iduals and !amilies #ho are not #ell trained in boat operation or
#ho entrust their #atercra!t to inexperienced operators" are li0ely to incur serious
liability losses.
L: "!ine6Relate' *iaFility
.ome indi$idual and !amily acti$ities on or o!! the residence premises may be more o!
a business nature than a personal nature. The distinction bet#een commercial and
personal acti$ities can be important in the context o! insurance" because personal
liability insurance may not co$er business,related acti$ities. The sources o! business,
related liability !or indi$iduals and !amilies include pro!essional acti$ities" $olunteer
#or0" o#nership in closely,held corporations" ser$ice as directors or o!!icers" !ello#
employee suits" and use o! personal property" especially autos" !or business purposes.
OtGer Inci'ental Sit!ati&n
The situations in #hich indi$iduals and !amilies may be exposed to liability loss are
limitless. 2side !rom the ma?or cateories discussed abo$e" some other situations
deser$e mention.
K+E %&t *iT!&r *iaFility
%osts #ho entertain and ser$e alcoholic be$eraes to their social uests may be held
accountable !or damae caused by intoxicated uests. This type o! liability is commonly
re!erred to as G&t liT!&r liaFility.
K,E )er&nal Activitie
The personal acti$ities that can create liability are limitless. In addition to the li*uor
liability" other such acti$ities that create liabilities include the !ollo#in@
J +orro#in" abusin" and damain the property o! another person" such as a
camera or an electric sa#
J In?urin another person or others< property in a sportin or huntin accident
J Permittin the !amily do to run loose in the neihbourhood
J +aby,sittin a neihbour<s children
JS$ Activity E:
Illustrate a liability arisin due to personal acti$ities" #ith at least t#o examples.
In simple #ords a person may ha$e to pay damaes or ma0e ood losses by #ay o!
compensation under common la# !or neliently causin bodily in?uries or property damae.
/or example" a cotton !actory is #or0in in pea0 season and due to the sheer nelience
o! a #or0er" a bidi or a ciarette is thro#n into the cotton" It damaes the plant" machinery
as #ell as the buildin. In addition to that" the !ire may be so de$astatin that it enul!s the
Unit 1C *iaFility In!rance 61
buildin next to the !actory or causes o! damaes to it. The o#ner o! the !actory can be
sued by his neihbor and he 9the o#ner: has to compensate him under common la#.
in addition to the liability arisin out o! common la#" it can arise due to statutory la#. /or
example" !or #or0men<s compensation under the ).C. 2ct" 1P1C" the employee may be
nelient #hile doin his #or0 or ?ob assined to him" but the employer is liable to
compensate the employee #ho mets #ith an accident #hilst on duty.
I he liability can arise under Public Liability Insurance 2ct 1PP1 and it can also arise due to
@ontract bet#een t#o parties. Public Liabili ty pro$ides indemnity in respect o! leal liability
or in?ury or damae to property o! members o! public #hich is called third party. There!ore
is also called as third party liability insurance. This term is enerally used in !or motor
<hides.
nployer<s liability 9)C: insurance pro$ides indemnity to insured in respect o! his liability
uler common la# or statutory la# to pay compensation to his employees !or illness"
cident" or e$en occupational disease such as #ool sorter<s disease. Persons #or0in in
ool industry come in contact #ith the s0in o! sheep or other animals. I! the animal has
sthrax" it can be passed on to the man. %ere" the #or0er can sue the employer and
nployer has to compensate him under employer liability and in turn" the employer is
clemni!ied by the employer liability insurance policy.
C.5 %ISTORICA* "AC0GROUND OF *IA"I*ITY INSURANCE
he history o! public liability oriinated in +ritain in 1N6K and the !irst co$er ranted #as
Jainst the liability arisin out o! one o! horse dri$en $ehicle. In India" the passin o! the
#.C.2ct" 1P1C and (otor ;ehicle 2ct o! 1PCP ha$e had a massi$e e!!ect on the oriin
and ro#th o! employer and public liability. These acts" #hich encompass increasin the
standard o! li$in" a#areness" education" complex condition o! li$in" 0no#lede o! leal
rihts" court decisions" etc." contributed to the ro#th o! public liability insurance. The
+hopal as traedy in 1PN5 a$e momentum to ne# areas o! ha&ards to li!e and property.
3nactments li0e 3n$ironment Protection" Consumer Protection 2ct" 1PNL" and Public
liability Insurance 2ct" 1PP1" ha$e #idened the scope o! liability insurance.
.cope &4 *iaFility In!rance:
Liability Insurance comprises the !ollo#in policies@
1 2ct policy under Public Liability Insurance 2ct 9%a&ardous .ubstances:>
846)Public Liability policy !or Industrial and non,Industrial ris0s>
847)Products Liability policy>
848)Pro!essional Indemnities !or Doctors< solicitors etc.>
849)3mployers< Liability 9)or0men<s Compensation Policy:>
850)Directors and O!!icers< Liability Policy.
.pecial !eatures o! Liability Insurance@
i: Claims are paid to persons other than the insured" li0e members o! the public or the
insured<s employees" as the case may be" but on the behal! o! the insured.
ii: The insurance pro$ides indemnity to the insured in respect o! his potential leal liability
i.e. liability arisin under Common La# or .tatutory La#.
in: Claims are neotiated and settled by insurers but on behal! o! the insured" #ho is
re*uired" by policy conditions" to co,operate #ith the insurer in this respect.
i$: Leal costs o! the insured incurred #ith the #ritten consent o! the insurers are
reimbursed under the policy.
$: Instead o! a< sum insured< a limit o! indemnity is stated in public liability policies. In
employer<s liability policies no limit o! indemnity is incorporated.
$i: To arri$e at the premium" the rate is related not only to the limit o! indemnity but also
to other !actors such as turno$er" seatin capacity" number o! students etc.dependin
on the type o! policy.
JS Activity F:
4Liability Insurance comes handy in sa!euardin your li!e" liberty and property aainst
un!oreseen ris0s in a modern economy.4 Comment.
Unit 1C Liability Insurance ,1
1K )U"*IC *IA"I*ITY INSURANCE KACT LIABILITY)
____________________________________________________________
> o# let us loo0 at the di!!erent types o! liability policies@
nder the Public Liability Insurance 2ct" 1PP" all companiesBindi$idualB persons
o#ninB sealin ha&ardous oods are re*uired to ta0e insurance policy satis!yin the
limits speci!ied a the 2ct. It imposes no !ault liability.
No !ault liability means the claimant is not re*uired to pro$e that the death or in?ury
!or damae #as due to any #ron!ul act" nelect or de!ault o! any person.
The o#ner has to pay relie! in the e$ent o! a: death or in?ury to any person" b:
damae to property o! any person #hile handlin any ha&ardous substance.
Compensation paid under this Liability insurance are@
1" /atal accident @ Rs.1K"777B, per person
1, Permanent total disability @ Rs.1K"777B,per person.
Permanent total disability@ The amount o! relie! on the basis o! percentae o!
disablement as certi!ied by an authori&ed physician i.e. a reistered medical
practitioner.
Temporary partial disablement #hich reduces the earnin capacity o! a $ictim.
Loss o! earnin maximum Rs. 1"777B, P.(. only 9i! hospitali&ed !or more than
three days and maximum up to C months and ae is abo$e 1L years.:
2ctual (edical 3xpenses@ Upto a maximum o! Rs.11"K77B, in each case
under 1 to 5.
2ctual damae to property@ Rs.
L"777B,. . /atal Rs. 1K"777B, per person.
/he !ollo#in de!initions must be 0ept in
mind@
%an'lin:: In relation to any ha&ardous substance means the manu!acture"
processin" reatment" pac0ain" storae" transportation by $ehicle" use"
collection" destruction" con$ersion" o!!erin !or sale" trans!er or the li0e o! such
ha&ardous substance.
%aLar'&! !Ftance an' Gr&!5: )hich means the items listed and rouped
under Ip Public Liability 2ct 1PP1 and the rules !ramed there under.
357
l2irn&ver i 3eant 4&r:
851)Transport operators , Total 2nnual /reiht receipts.
852)(anu!acturin units , 3ntire 2nnual 8ross .ales Turno$er includin all le$ies and
taxed o! manu!acturin units handlin ha&ardous substances as de!ined in the Public
Liability 2ct" 1PP1.
853)8odo#n and )arehouse o#ners , Total 2nnual Rental Receipts o! premises handlin
ha&ardous substances as de!ined in the public liability insurance 2ct" 1PP1.
854)Other , Total 2nnual 8ross Receipts.
C&35!l&ry In!rance:
855)The liability has to be compulsorily insured under a contract o! insurance" !or an
amount not less than paid up capital o! ha&ardous substance..
856)3$ery o#ner in addition to premium has to pay to the insurer an e*ui$alent amount to
be credited to the en$ironmental relie! !und established under the act.
857)The maximum liability o! the insured to pay relie! under an a#ard to se$eral claimants
arisin out o! an accident shall not exceed rupees !i$e crores. 2nd in case o! more
than one accident durin the currency o! the policy or one year" #hiche$er is less"
shall not exceed rupees !i!teen crores in the areate.
858)2ny a#ard o! relie! #hich exceeds the amount payable under the Insurance policy
shall be met !rom the relie! !und and in case the a#ard exceeds the total o! the amount
o! insurance and the relie! !und" the amount #hich !alls short o! such sum payable be
met by the o#ner.
C&vera:e
2!ter payment o! appropriate premium .payment o! en$ironmental !und" the company #ill
indemni!y the insured o#ner aainst the statutory liability arisin out o! accidents" occurrin
durin the currency o! the policy due to handlin ha&ardous substances as per PLI2ct
2nd sub?ect to the terms" exceptions and conditions o! the policy.
E>e35ti&n
859)Central and state 8o$ernment" local authorities and corporations o#ned or controlled
by them may be exempted.
860)I! the public liability !und is established and maintained as per rule exemption is ranted.
C: The !und so created should be manaed by a 2dministrator and noti!ied to central
o$ernment and must be utili&ed to satis!y the a#ard declared by the collector.
)re3i!3 Rate
The rates o! premium are based on limit o! indemnity 9any one accident: and the turno$er
as per the schedule.
A. On *i3it &4 In'e3nity:
*i3it &4 In'e3nity 9Rs.: Up to 1
lac 1 to 1.K lac 1.K to K lac Y
soon
". T!rn&ver *&a'in::
T!rn&ver
Up to Rs. 1 crore Up to Rs.K
crores
UptoRslOcrores On turno$er
exceedin 2nd so on
Envir&n3ental F!n':
Rate 5er 3ile
7.67 7.6K 7.N7
Rate
Rs.7.11 per mile sub?ect to minimum o! Rs. 1177 Rs. 1177 ]
7.7N5 per mile on Turno$er exceedin Rs. 1 crore Rs.5KL7
]7.761 per mile Rs.K crores.

'. 2n amount e*ual to the premium o! the insurance #ill be collected #ith premium !or
3n$ironment Relie! /und. This contribution so recei$ed shall be trans!erred to the
administrator o! the !und by the insurance company. This !und contributes to compensation
in case the total compensation exceeds policy limit declared by the collector.
The policy excludes the !ollo#in liabilities@
861)2risin out o! #ill!ul or intentional non compliance o! any statutory pro$isions.
862)In respect o! !ines" penalties" puniti$e andBor exemplary damaes.
1" 9% ,e(8ect /f d)!)ge t/ 8,/8e,t: /w%ed, -e)(ed etc. ;: t7e i%(<,ed /, i% 7i( c<(t/d:.
360
This is not deemed to be third party
property. 95: )ar and nuclear ris0s.
The policy contains usual policy conditions. Other special conditions are@
863)There shall be no liability under the policy !or a claim made a!ter K years
!rom
the date o! accident.
864)The insured o#ner has to 0eep record o! annual turno$er and declare it
at
rene#al o! the policy.
9c: Non disclosure o! material !acts and !raudulent claims are not
payable.
N&n6c&35liance &4 act:
Non,compliance o! act in$ites !ine or imprisonment as per act.
Clai3 )r&ce'!re
Collector is the authority !or en*uiry #here the claim is reported under the act
ha$in ?urisdiction o$er the area. %e declares the a#ards o! relie! and name the
person to #hom it shall be paid.
2n application !or relie! must be made #ithin K years !rom the date o! accident by
!ollo#in persons@
865) In?ured person
866) In case o! !atal accident" leal representati$e o! the deceased.
867) O#ner o! the damaed property.
868) 2ent duly authori&ed by a person #ho #ants relie! under the act.
2pplication must be supported by rele$ant documents mentioned belo#@
869)(edical certi!icate reardin in?ury" illness or disability.
870)(edical bills and receipts
871)In case o! !atal accident death certi!icate and post mortem report.
872)3mployer< s certi!icate reardin absence and loss o! #aes durin the period
o!
temporary disablement #ith hospitali&ation proo! !or a period exceedin C days
and
proo! o! birth date certi!icate.
873)Repair or replacement certi!icate alon #ith cost o! property damaed in the
accident.
Unit 1C *iaFility insurance-
years !rom
declare it at
?r the act ha$in
>

person to #hom
by !ollo#in
Settle3ent
The collector has a po#er o! the ci$il court made en*uiry o! the accident in his ?urisdiction and
in$ites applications !or relie!.
2!ter recei$in the application" he shall $eri!y the occurrence o! the accident" en*uire about the
claim and ma0e an a#ard #hich he !eels to be ?usti!ied and deli$er the same to the person
concerned #ithin 1K days !rom the date o! the a#ard.
2s directed by the collector" insurance company deposits the a#ard #ithin C7 days !rom the date
o! announcement o! the a#ard.
2s per he scheme o! the central o$ernment" the collector shall arrane to pay the a#ard !rom the
en$ironment !und to entitled persons.
/actors to be decided@
874) 2ccident has oriinated out o! the Insured<s trade. 9!irm "industry etc:
875) The
claimant dies or #as in?ured as a d0ect result o! the accident.
$
& Activity G:
4Ram 2ency4 is a as dealer #ho #ants a protection !or his liability to#ards ha&ardous material
stored in the odo#n. .uest a suitable co$er.

act.
aelo#.
i
report.
Tes durin the period o!
led exceedin C days and
Let<s see more about public liabilities !or industrial and non,industrial ris0s.
13.( )U"*IC *IA"I*ITY INDUSTRIA* RIS0S __________________________
(ar0et areement !or Public Liability insurance has been e!!ecti$e !rom 71.71.1PNN. This
areement applies to industrial and storae ris0s such as odo#ns" depots" tan0 !arms"
#arehouses etc.
CL
1
.cope o! co$er o! this policy under industrial ris0s are as under@
876)*e:al *iaFility o! the insured to#ards damaes to the third party in respect o!
accidental deathBbodily in?uryBdisease and loss or damae to property arisin out o!
such accidents.
877)*e:al c&t an' e>5ene incurred #ith prior consent o! the insurer !or in$estiation"
de!ence" or settlement o! claim are co$ered. 2ll claims ha$e to
J be made in #ritin aainst the insured policy period.
J any#here in India in accordance #ith Indian la#.
J in respect o! accidents #hich cause death or in?ury or damae to property o!
third parties.
It is not permissible to issue a public liability policy #ith unlimited liability.
3. )&ll!ti&n ri9: The standard policy #ordin does not include co$er !or pollutio@
liability. It has to be speci!ically included by prescribed endorsement under mar0
areement and premium thereo! is collected there !orm
It co$ers .liability !or death or bodily in?ury or loss o! or physical damae to tanib0
property due to unintended" sudden and unexpected happenin !rom seepae" pollutioO
or contamination at a speci!ic time and place durin a policy period.
It also includes costs o! remo$in" cleanin o! contamination substances
andexcli !ines" penalties"
Co$er is sub?ect to !ollo#in conditions@
1. .ubmission o! additional in!ormation as per *uestions in the proposal !orm.
878) .ubmission o! certi!icate B consent letter !rom Pollution control board rantin
permission to the Insured to carry on their acti$ities.
879) .inle policy can be issued to co$er $arious premises o! the Insured applyin !or
appropriate loadin.
880) Retr&active Date: This is the date #hen ris0 is !irst inspected !or a claim made i
under policy and !rom rene#ed #ithout brea0 in the period o! co$er. There #ill notd
be any liability there!ore !or any liability !or any incident prior to inception or a
expiry o! the policy.
1
!i
;. N& revii&n in li3it is allo#ed durin currency o! the policy. %o#e$er
additional units can be included #ithin same indemnity limits by charin short
period premium. Retroacti$e date !or such inclusion #ould be date at
inception o! inclusion in the policy. This remains unaltered in the e$ent o!
rene#al #ithout any brea0 in insurance.
R. C&35!l&ry E>ce: =.% o! the limit o! indemnity per any one accident
sub?ect to maximum o! Rs. 1"77"7776,.
J.
-&
l!
nt
ar
y
E>
ce
:
Di
sc
ou
nt
in
pr
e
mi
u
m
m
ay
be
all
o
#e
d
!or
ex
ce
ss
op
ted #hich #ill be in additional to compulsory excess. It may $ary !rom 1 E to
17 E per accident !or #hich discount #ould $ary !rom 1.KE to 1KE in the
premium.
Dbo$e excess is applicable to both T.P.P.I. and T.P.P.D. claims inclusi$e o! de!ense
costs <risin !or de!endin the liability.
tran5&rtati&n Ri9: This is an exclusion. %o#e$er in case insured desires
extension to o$er liability arisin out o! and incidental to transportation o! materials
includin ha&ardousB ianerous substances by rail" road" or pipelines and claim made
durin the policy period ob?ect to separate limits o! indemnity per any one
accident to any one year ha$e to be elected !or such transportation co$er.
> he additional premium !or the transportation extension co$er shall be K7E o! the
premium omputed as under@
here are statutory pro$isions to carry danerous B ha&ardous substances and it
has to Smplied#ith.
&)ti%g
On Indemnity Limits@ 2t the rates depends on the indemnity limits selected !or
transportation co$er.
On Turno$er@ The rates are depends on the estimated turno$er in transit. Turno$er
means total amount o! oods inclusi$e o! all taxes and le$ies.
Policy cannot be issued !or more than 11 months.
Conditions applicable to the public liability insurance policies.
@
a: Indemnity #ill be applicable to claims arisin out o! any accident durin the
currency o! the policy only.
b: 2ll intimationsBcommunications should be in #ritin.
c: It excludes any liability arisin out o! pollution unless speci!ically co$ered.
881)Noti!ication extension clause@ 2s reards intimation o! liability" limitation period #ould
be as laid do#n in !orce !rom time to time. 2ny intimation o! claim #ould be as i! it is
!irst made aainst the insured.
882)3xtended claim reportin period is P7 days !rom expiry o! the policy in case o!
cancellation or non rene#al pro$ided such e$ent has i$en rise to liability durin the
policy period only.
883)Indemnity ranted under this policy extends to the o!!icials o! the insured actin in the
capacity o! their business" o!!icers" committee members o! canteen" medical" sports"
etc. orani&ation actin in their respecti$e capacity as such and such representati$e o!
the estate o! the person due !or indemni!ication under this policy.
884)(aximum liabilityBlimits@ 2ny one accident !or one or series o! claims out o! the same
occurrence.
Excusi!ns
885)2risin out o! any areement by the insured #hich #ould not attach in the absence o!
such areement.
886)2risin out o! con$ulsions o! nature atmospheric disturbances.
887)2risin out o! deliberate #ill!ul non,compliance o! any statutory pro$isions.
888)/inancial loss or loss o! ood#ill.
889)2risin out o! personal in?ury on in!rinement o! plans" desins.
890)2risin o! !ines" penalties etc. or !or any other damaes" resultin !rom multiplication
o! compensatory damaes.
891)(an,made perils li0e #ar and allied perils" nuclear exclusions" radioacti$ity.
892)2risin out o! possession o! any $ehicle !or #hich there is any other insurance re*uired
by any other leislation.
893)Transportation o! oods unless speci!ied.
894)O#nershipBpossession o! aircra!t" #atercra!t etc.
895)Damae to any property o#ned" hired under hire purchase areement and is under
insured<s care other than premises temporarily occupied !or the #or0 thereon or @
inder
I<nit 1C Liability Insurance ,1
property terminated !or #hich insured #ould be leally liable.
11. 2ny liability to employee<sB$isitor<s personal e!!ects. i C. 2ny
in?ury damaes occurred prior to retroacti$e date.
>?te%(i/%(
1. Inclusion o! collaborators liability ,
1 This leal liability is a$ailable #ith respect to technical collaboration areement bet#een
named insured and the collaborator. Cause o! action must be #ithin ?urisdiction o!
Indian court in India except !or exported product and that only Indian la# shall be
applicable !or actions brouht in India.
2ct o! od perils can be included under this class o! insurance by charin extra
premium ranin !rom 17E !or &one 1 to 1.KE !or &one I;.
3xtension is also a$ailable !or loadin in turno$er in respect o! odo#n" #arehouse"
#here under loadin 9min: o! K E o! ross premium includin pollution extension .+ut
excludin transportation extension has to be done !or odo#ns in di!!erent.
3i(c/<%t(
Discounts in the premium are ranted !or certain !a$ourable !eatures #hich impro$e the
J0. /or example"
/ire proo! supportin structure o! storaes" e*uipments" pipelines.
3n$ironmental control #ith the help o! monitor. .tand,by storae o! toxic
as by tan0s in case o! emerency dumpin. Location o! plant a#ay !rom
urban and semi,urban population 2larm system #ith toxic as detector.
J$ Activity %#
8i$e !our points on the 4+lurrin o! the boundaries bet#een rural and urban sements and a
heihtened consciousness o! rihts #hich is creatin ne# demands !or liability insurance.4
13.+ )U"*IC *IA"I*ITY NON6INDUSTRIA* RIS0S
Non,Industrial ris0s are@
896) %otels" motels" club houses" restaurants" boardin and lodin houses" !liht 0itchens.
897) Cinema halls" auditoriums" theatres" public halls" pandals" open air theatres
898) Residential premises
899) O!!iceBadministrati$e premises" medical establishments" airport premises 9other than
a$iation liabilities:" research institutes and laboratories.
900) .chools" educational institutions" public libraries.
901) 3xhibitions" !airs and !etes" stadiums.
902) Permanent amusements par0s.
h: /ilm studios , indoor and outdoor" circus" &oos.
Sc/8e /f c/$e,
This co$ers leal liability to a third party on account o! accidental bodily in?uryBdeathB
disease and or lossBdamae to their property arisin out o! claim made !or any incidence
S
occurred durin the policy period. This includes leal costs payable pro$ided areed by 9
the company. (aximum liability bein limits o! indemnity under the policy. No policy can A
be issued #ith unlimited liability. @
)&ll!ti&n Ri9: Unless speci!ically included this policy does not co$er pollution ris0s and
additional premium" thereo! is paid as de!ined in the areement. The proposer #ill be
re*uired to !urnish a consent certi!icate letter !rom pollution control board rantin permission
to carry on the acti$ities.
6,e!i<!
Rates o! premium !or $arious cateories o! ris0s are de!ined in the areement" #hich
depends on the limit o! indemnity and estimated annual turno$er. )here turno$er !iures
are re*uired to be !urnished the same ha$e to be submitted accurately at the inception o!
the policy. 2ny up#ard re$ision o! indemnity limit is allo#ed at the time o! rene#al only
and retroacti$e date !or increased limit shall be the inception date o! rene#al policy.
>?ce((
2ll policies issued shall be sub?ect to compulsory excess o! 1KE o! any one accident
indemnity limit sub?ect to minimum Rs. 1"77"7776, and the same applies to both property
damaes" deathBin?ury claims inclusi$e o! de!ense cost arisin out o! any one accident.
In case o! $oluntary excess" there is a discount in premium ranin !rom 1.KE to 1KE
based on opted $oluntary excess ranin !rom lEto 17E o! limit o! indemnity per 2.O.2.
Policy cannot be issued !or less than 11 months.
4i!it( /f 9%de!%it:
The insured has to select limits o! indemnity a: any one accident 92.O.2: and b: any one
year 92.O. I: 9policy period: in the ratio o! 1@1"1@1"1@C or 1@5.
3xample
2.O. 2 2.O. I.
Rs" 17 lacs Rs. 17 lacs or Rs.17 lacs or Rs.C7 lacs or Rs.57 lacs.
Ratin 4&r N&n6In'!trial ri9
+asis o! ratin is related to !ollo#in aspects @
Type o! construction OccupancyBstorae
Ratio o! indemnity limits 2.O.2.@ 2.O. I.
Communication unless 1K meters a#ay !rom main construction structure.
%eiht exceedin 11 meters , loadin 17E o! premium. Ris0 roup and
turno$er.
P
r
T
In this unit #e ha$e studied the term <liability< #hich means responsibility. The purpose
o! liability insurance is to pro$ide indemnity to the insured due to !inancial
conse*uence o! leal liability. )e ha$e also discussed t#o main classes #hich are
public liability and employer<s liability. +y act" a !e# liabilities must be
compulsorily insured to protect the interest o! the common man.
)e ha$e discussed $arious types o! public liability insurance li0e the Public Liability
2ct" #hich is compulsory by act" public liability industrial ris0 !or industrial and
storae ris0s and public liability non industrial ris0. Li$in in a ne# #orld" both" the
indi$idual and the entrepreneur run a disproportionately hih ris0 o! causin
damae to others and hence liability insurance has become popular.
13.. 0EY1ORDS
1

Envir&n3ent F!n'
*e:al *iaFility *iaFility
3
premium has to pay to the
insurer an e*ui$alent
amount creates an
3n$ironmental /und.
2ny liability imposed on a
person by a court o! la#.
(eans responsibility" any
leally en!orceable
obliation.
*iaFility In!rance
)&licy )eri&'
T!rn&ver
Insurance co$erin the policyholder <s leal liability
resultin !rom in?uries to other persons or damae
to their property. Liability Insurance pro$ides
protection !or the insured aainst loss arisin out o!
leal liability to third parties.
(eans the period commencin !rom the retroacti$e
date and terminatin on the expiry date as sho#n in
the policy schedule.
The money earned !or oods supplied or ser$ices
rendered in the course o! the business at the premises
speci!ied in the policy.
;arious proposal and claim !orms ha$e been
enclosed in the annexure !or your ready re!erence.
HI. De!ine liability. Distinuish bet#een criminal and leal liability. 2lso elaborate on
employer liability and public liability policies.
H1. Discuss at lenth the Public Liability 2ct Policy" 1PP1.
HC. 3numerate the salient !eatures o! liability insurance. %o# does it di!!er !rom other
normal policies'
H5 /ill in the blan0s@ a: There
are and liabilities.
903)______________3$ery o#ner" in addition to premium" has to pay an e*ui$alent
amount 0no#n as
---------------!und.
904)__________________________In liability policy" is not directly
compensated.
905)____________________________________________In liability policies"
industrial ris0s are issued to---------------------------and-------.
13.11 ANNE@URE
ippft The New I#'i*
A""!r*#e Co. L+'.
'>ttfs i?* WH wsfro ^jfttt t^ftHf ftSfcn, :I, >wrwTWt
1|
n>f, <sl<!-rt 400001. & Hx> Offi:New
ndia Assurance Building, 87, Mahatma Gandhi Road, Fort, Bombay- 400 001.
M !lRr #!t 'm sr!tsi
!t!l!cm
Liability o! the Company #ill not commence until receipt o! premium and statutory contribution to#ards the
3n$ironment Relie! /und.
N 4cnI
X!tMn ai!eP!cR" 1..1
PROPO.2L /OR( /OR IN.UR2NC3 UND3R PU+LIC LI2+ILITI
IN.UR2NC3 2CT @AA1 , \ "
Name o! the Proposer o#ner in !ull 9see note:
2ddress
PIN-
+usiness
Paid up capital 9.ee tyote:
List o! ha&ardous substances handled and 8roup 9.ee
Note:
cl?f5
Details o! all accidents durin past C years and
compensation paidBclaimed but not yet paid.
6. mr!Y Xn!^= G :fi! 9!eno!t G?.:
3stimated annual turno$er 9.ec Note: J
9Q: Proposed Insurance Iear 9.? ff!
<$
9b: Pre$ious Iear --------
Number o! 9a: )or0men 3mployees
9b: other 3mployees 9.ec Note: -----
9. f^?ft ^g> Cjtfen % Bra 3 3fre?w
Limit o! Indemnity re*uired in respect o! 2ny one
accident@ ----------. ---------
17. a?ra'uX!S *
Policy period re*uired /rom 2(BP(
To midniht o!......
l" ?t aictrf $& ^HnfWf ?) t afl
af&Pro>1 1 923 % 3j?ffa qifttirftm
t ^ aiftf^ra ftfijaj ft f firagji ?ra r
w<3 ^rt on frann ' i
IB#e hereby declare that a: all statutory pro$isions relatin to myBour
business proposed !or insurance are complied #ith" b: the abo$e
statements and particulars are true" c: IB#e ha$e not omitted"
suppressed" misrepresented or misstated any material !act and d:
IB#e aree that this declaration shall be the basis o! the contract
bet#een meBus and the Company and be incorporated therein.
Place@ " Date@
.inature o! the Proposer.
Note to items>
1. O#ner means a person #ho o#ns" or has control o$er handlin any
ha&ardous substance ,at the time o! accident and includes,9i: in the
case o! a !irm" any o! its partners 9ii: in the case o! an association" any
o! its members and 9iii: in the case o! a company" any o! its
directors" manaers" secretaries or other o!!icers #ho is directly
in chare o!" and is responsible to<the company !or the conduct
o! the business o! the company.
906) Paid up Capital means in the case o! an o#ner not
bein a company" the mar0et $alue o! ail assets and
stoc0s o! the underta0in on the date o! contract o!
insurance.
907) %a&ardous .ubstances Qnd 8roup means the items
listed and rouped under 3n$ironment 9protection:
2ct 1PNL and the Rules !ramed thereunder.
6. Turno$er shall 3ean6
9i: (anu!acturin units,2nnual 8ross .ales o! all
oods includin all le$ies snd taxes" 9ii: 8odo#n.#arehouse
o#ners,Total 2nnual rental
receipts. '
9iii: Transport operators,Total annual !reiht receipts" 9i$: Others,
, or) iTERr gR
% 3fjsq gl cFii
SR wflfci aft n as
Total annual ross receipts.
N. <)or0men 3mployees< shall mean such
employees
#ithin the de!inition o! 4)or0man4
under the
)or!cmen4s Compensation 2ct"1P1C.
There is a separate policy co$erin L382L
LI2+ILITI other than the 2ct Liability
proposed !or insurance in this proposal details
o! #hich can be obtained !rom the Company<s
o!!ices.
)RO%I"ITION OF RE"ATES
908) No person shall allo# or o!!er io allo#" either directly
or indirectly as an inducement to any person to ta0e
out rene# or continue an insurance in respect o! any
0ind o! ris0s relatin to li$es or property in India" any
rebate o! the #hole or part o! the commission
payable or any rebate o! the premium sho#n on the
policy" nor shall any person ta0in our or rene#in
or continuin a Policy accept any rebate" except such
rebate as may be allo#ed in accordance #ith the
published prospectus or tables o! the insurer.
909) 42ny person ma0in de!ault in complyin #ith the
pro$isions o! this section shall be punishable #ith
!ine #hich may extend to !i$e hundred rupees.4
Form No' A.C-3CO [A] (Scbooli etc) P. L. 1,
Act. 1991
The Ne# India 2ssurance Company Limited
Regional Office : 2420, Ge \. Thimmayya Road, Gulmohar Apartment*, Puna 411 OQ1.
PROPOSAL FORM FOH PUBLC LABLTY NSURANCE
i For r.Dr.-lridustria! Risks )
1 . Schools / Educational nstitution B i Libraries
910) Office ; Residence* . Admin;, ., , ;v<j Premisf s / Mad'ical Establishments / Research. nstitutions/
laboratories i Airports
911) Exhibitions / Fairs / Fates / Circuses / Film Studios / Pandals / Teurrtamants / Zaoi / Permanent
Amusement Parks
A. Cinema Hall / Auditoriums / Theatres / Public Halls / Opsn Air Theatres / Public Halls 5,
Contractors for Maintenance Jops
Liability of the Company doss r.ot commence untiltha proposal hat bn accepted end the premiurnpaid THE
TERRTORAL LMT AS APPLCABLE TO THS POLCY ANYWHERE N NDA
All questions should be answered \vith respect to each unit/tvtabiishment. 1 .
NairMi of the proposer ( in full }
912) Adderss of the proposer
913) A Jdre$$ of each of the premises and/or chain of
establishments to b insured
1.
2. 3.
4. 5
4. Full description of each ol the premiM
914) Type of construction
915) Age of the Building
916) No. of floors and hei )ht of the
Building
which floor is occupied by you ?
917) Details of other occupants
918) Detail* of the Lifts Eiuvators, Escalators etc,
Please specify make and capsclly.
f) Activities bemg carried on in the premises
5. a) Art the p'emises/equipments/machineries in sound
condition of repair
b) Details of suiroundtng areas/property
H*;J $o! o8(lie' 0i+h *ll "+*+!+or$ r!le".r*3!l*+lo#7
(er+*i#i#3 +o +he (re8i"eo *#' $o!r &!"i#e"" *+i;i+ie" >
919)Does the premises have boundary/fencing ?
920)Security/Safety arrangements ?
921)Details of systems provided for prevention of fire/explosion sic
922) Details of "ema.'gtmc/ plan" f any i
Lakshmj 2000 7-S2

nit 1C Liability Insurance ,1
, Do you handle or use or star* aases/hszerdoUJ/toxic/radioactive
materials and/or equipments in the premise:.. f yes, please giv
details of maximum capacity stored/used/handifld at a tima
Pl***e 3i;K +he l*i8" hi"+oi$ +or +he l*J+ +hree $e*r" i# +he
follo0i#3 for8*+
IJJK -< -< -<
923) No, of slaims
924) ToUl A8o!#+ (*i' L".
R". f+J.
7o'il$ i#2!r$
Pro(er+$ '*8*3e
C*"+ of 'efe#e *+io#"
9. Total amount of pendina claims
Bodily injury
Pro(er+$ '*8*3e
Cost of defence actions
to. Has your proposal or iensv,. ,<SJH oeiiinedor premium been incr-
eased or special terms has been imposed by any insurer in the past?
11. Pieate ndicate tha limit of indemnity required :
925) A#$ o#e *i'e#+
926) 2ny &ne year
12 Policy period required-From____
To.
ADDTONAL QUEST10NA!ft RSKS-WSE
FOH SCHOOLS / EDUCATONAL NSfilUriONS / LBRARES ETC.
13 No of students and thatr eye Qtoup
|
14, Whether Hostel facility is provided
if yes. No. of Rooms No
of inmates
15. Are canteen facilities provided in nstitution / Hostef,
f ye* ta!e whether they are hygenically maintained
' f Do you netd cover aflainst riskTassociated with
food end beverages served in your institutions
17. Specify other facilities provided
927) ndoor Games
928) Outdoor Games (like mountain climbing hang
gliding,
horse riding swimming etc.) and whether such games are
taught under !h$ supervision of trainers andror bodyguards.
13. s) No of Laboratories
b) Measures taken to prevent accident in Laboratories
19. Whether outing ara afranged by tha Scht .:/Colfv3&
il so. how often procedure for taking the students for such outings
( Educational tour may also be included there i
20. Teacher Students ratio :
, FOR OFFCES/RESDENTAL PREMSES/ADM PREMSES!
MEDCAL ESTABLSHMENTS / R : S,saCH / NSTTUTONS &
LABORATORES Airpoit premises iother than aviation
liabilities ) etc.
929) Specify whether other facilities like Canteen, Sports
etc.
provided {list out facilities)
930) Do you need cover against risks associated with fovd and
beverages
ssrved in your eitablishment
931) Details regarding
8} Previous years gross annual turnovc" b)
Current year's projected annual turnover
16. Do you require extended covtr against accidental pollution
liability -
'. FOR EXHBTONS /FARS /FETES /CRCUSES /FLM STUDOS
(NDOOR AND OUTDOOR / PA:T>A_S / TOURNAMENTS /ZOOS/
PERMANENT AMUSEMENT PARKS
13. What i the maximum seating capacity/area occupied
H. What ate the other Facilities/Games provided :
Please specify whether thy are operated and controlled by you :
c}
a)
V CNEMA HALLS/AUDTORUM/THEATRES/PUBLC HALLS/
OPEN AR THEATRES /PUBLC HALLS
13. What is tha maximum seating capacity ;
14 Wnat am the other facilities provided. Please specify whether they
are operated end controlled by you
b)
d)
15. Do you need cover against risks ss,. .'rated with food and beverage served in your establishment.
16 Specify estimated annual turnover. ( the term turnover includes
gatemoney, donor cards, income arising from other facilities listed
in Q. 14 inclusive of all taxes, duties levies, surcharges )
/we desire to effect an insurance in toims ot the public liability policy of the company against the limits
of ndemnity specified above !/WB hereby declare that all statutory provisions relating to my/our business
proposed for insurance are complied with /WB further declare that the above statements and particulars sis true,
tnd /we have not omitted, suppressed misrepresented or misstated any material fact nd l/wa agroe that ihii
declaration shall be the basis of the contract between me/us and the companv and be incorporated therein.
Date ;
Place ;

SECTON 41 OF THE NSURANCE ACT PROHBTON.OF REBATES
1938
932) No person shall allow or olfar to allow either directly or indirectly as an inducement to any person to
take
out or renew or continue an nsurance in respect of any kind of risk relating to lives or property in ndia any
rbte of the whole or part of th commission payable or any rebate of th premium shown in the policy nor
shall any parson taking out or renewing or continuing a policy accept any rebate except such rebate as may be
allowed in accordance with the prospectus or tables of the insurer,
933) Any person making default in complying wrth the provisions of this Sociion shall be punishable wits,
iins
which may extend to live hundred rupees
1$.1 INTRODUCTION
In the per$ious unit" #e ha$e discussed criminal and ci$il liabilities. ;arious public liabilities
are introduced to satis!y the needs o! the insured. In this unit" #e #ill discuss about other
liabilities. .ometimes it is !ound that indi$idual ha$e to pay compensation to a third party
due to ci$il #ron or damae or in?ury to third person. /or example" a person may be
liable to pay due to nelience leadin to the in?ury o! the other person.
The employer is also liable to pay compensation to his #or0man althouh the accident
caused may be due to the #or0man<s nelience.
In some ci$il litiation" an indi$idual may be !ound liable !or the actions o! another person.
This is re!erred to as $icarious liability" and it is allo#ed only in certain situations" most
notably employer,employee" principal,aent" partnerships" and" in some states" !amilies.
/or example" i! an employee accidentally damaes the property o! a customer" the customer
may claim that both the employee and the employer are liable. 3ither or both may be
!ound !inancially responsible !or the harm caused to the customer" e$en thouh it #as only
the employee<s actions that caused the damae.
No# #e #ill discuss di!!erent types o! liability policies.
1$.8 )RODUCTJS *IA"I*ITY INSURANCE
Let us learn more about product liability.
Due to recent de$elopments" India is becomin $ery popular #ith manu!acturers o! consumer
and industrial products.
The demand !or insurance protection has arisen because o! the chane in li!estyle. The use
o! a #ide $ariety o! products" i! de!ecti$e" may cause death" bodily in?ury" illness" or damae
to property. .o the trend to#ards demands !or a compensation and consumer protection
act" to see0 protection !rom claims made aainst them by third parties" contributes to the
demand o! this class o! insurance.
.cope o! co$er@
This insurance co$ers leal liability arisin out o! the de!ecti$e product #hich has been
manu!actured and has le!t the premises" as aainst public liability insurance #hich co$ers
ris0s #ithin the premises. (aximum limit o! indemnity under the policy is restricted to
Rs.C.K corers any one year and applies to liability arisin #ithin India.
Unit 15 Liability Insurance , II
This liability is restricted to@
O. 2ny bodily in?uryBdeath on account o! accidental in?ury !rom the use o! such product
to third party.
1. 2ny accidental loss or damae to property o! a third party.
Products are classi!ied into 6 roups. .ome examples are@
I Carpets" cloc0s and #atches.
U 2lcoholic" be$eraes" !ans 9domestic:" 0itchen#are
in +read" ca0es and biscuits" !or0 li!t truc0s" mil0 products" so!t drin0s.
934) 2ricultural implements and !arm machinery" motor $ehicles" toys.
935) 2ir conditionin units and ducts" chemical products" cosmetics"
Pharmaceutical
products.
;I Cast iron products" motor $ehicle tyres and tubes" #ire products 9mesh Y chain:
;% 3xplosi$es and !ire#or0s" ladders" sca!!oldin 9metal:.
Un'erCritin: c&ni'erati&n
/he proposal !orm and ris0 report ha$e to be care!ully examined in product liability. .ound
under#ritin demands a thorouh 0no#lede o! the ris0 !actors such as nature o! products"
standards o! *uality control" uses o! the product etc.
Ratin:
The rates o! premium depend upon
@
Class o! ris0
.." Turno$er
936) Limit o! indemnity
937) Ratio o! limit any one year o! indemnity.
No re$ision in limit is allo#ed durin currency o! the policy.
Compulsory E>ce
per accident. (aximum excess under the policy is restricted to Rs. 1"77"7776,.
-&l!ntary E>ce:
This is an addition to compulsory excess. The discount o! premium $aries !rom 1.K E to
1KE based on percentae o! limit s selected under the policy !rom 1 E to 17E o! any one
accident.
E>5&rt
3xport to U...2.BCanada and other countries can be co$ered #ith domestic turno$er.
3xtensions o! 3xports ;endor<s liability toether #ith Domestic Co$er@ Named@ KE
premium on limit o! indemnity ] loadin o! premium on exports turno$er. Unnamed@
17E premium on limit o! indemnity ] loadin o! premium on exports turno$er. The
loadin is di$ided in C cateories
938)U...2;Canada
939)Orani&ations !or 3conomic Co operation and de$elopment
940)Other than abo$e.
This policy is issued #ith precondition that sum insured and payment o! claims #ill be in
Indian rupees. Reser$e ban0 permission is re*uired !or settlement in !orein currency.
Retr&active Date
This is considered as the !irst incepted date under claims made policy as #ell as rene#ed
policy #ithout brea0 in insurance.
In'e3nity *i3it
(aximum #ould be per accident limit. This also includes de!ense cost incurred #ith the
permission o! this company.
Indemnity to others@ o!!icials o! the insured" temporary employees #ho are responsible !or
liability arisin !rom business operation #ould be entitled !or indemnity under this policy.
Cross Liability@ 3ach person Bparty #ill be separately entitled !or indemnity sub?ect to limit
o! indemnity under the policy.
*
E>cl!i&n
Company #ill not be liable !or any claims arisin out o! the !ollo#in@
941) Cost o! repairs" reinstatement" modi!ication o! de!ecti$e product includin
cost to
recall #hole or part o! the product.
942) Cost arisin out o! any product intended !or incorporation into structure.
943) Non,compliance o! statutory orders.
944) Loss o! ood#illBmar0et or due to any !ineBpenalty.
945) )ar and allied perils" radioacti$e contamination" nuclear !uel and other such
perils.
946) Damaes to any property be lonin to or held in trust by the insured.
947)
2ny
los
s
or
da
ma
e
pri
or
to
ret
roa
cti
$e
dat
e
ex
ce
pt
in
cas
e
o!
co
nti
nu
ous inhalation
o! material #here in?ury cannot be established in #hich case !irst consultation
o!
medical practitioner or !irst noticed date #ill be ta0en as occurrence date i.e.
damae
!irst e$ident cause un0no#n as date o! occurrence.
h: Deliberate disreard o! technicalBadministrati$e manaement.
i: 2ny contractual liability and under contract o! employment.
?: /ailure o! the product !or the purpose it #as intended.
0: Product uarantee.
Ri 9 Ae3ent
948) 2nalysis o! production scheduleBacti$ities" use thereo! sale o! the product"
manu!acture
o! the product.
949) .a!ety control proramme B Implementation thereo!.
950) %a&ard analysis.
951) DesinBmaterial used.
952) (anu!acturin process.
953) Huality control.
954) Pac0inBlabellin.
h: .alesBdistribution net#or0.
i: Details o! customer complaints.
?: Pre$ious history.
0: Other considerations li0e labour relations.
$ Activity A#
Iou ha$e read in the ne#s about a de!ect in a batch o! in?ections #hich caused in?uries to
a lare number o! people. .tate the insurance company<s liability.
1$.3 *IFT KT%IRD )ARTYE INSURANCE
Sc&5e &4 c&ver
The policy pro$ides indemnity to o#ners o! buildins in respect o! liabilities arisin out o!
the use and operation o! li!ts. The leal liabilities co$ered are in respect o!@
955) DeathBbodily in?ury o! any person 9excludin employees o! the insured:.
956) Damae to property 9excludin insured<s o#n or employee<s property:.
The premium rates depend upon the
J Limit o! indemnity.
J 2ny one person.
J 2ny one accident.
J 2ny one year.
unit 15 Liability Insurance , II
g$ Activity " :
suppose you are a ci$il contractor #ith a bi pro?ect o! an ele$en stories< buildin. .tate
he importance o! li!t insurance" ta0in into consideration the liability in$ol$ed in this case.
1$.$ )ROFESSIONA* INDEMNITIES
to!essionals in the course o! their duties may commit errors and omissions or cause
iamae BlossBhardships to their clients by #ay o! unintentional nelience and become
esponsible under common la# to pay compensation. Pro!essional indemnities are desined
o pro$ide insurance protection to pro!essional people such as doctors" solicitors" chartered
ccountants" and architects etc. aainst their leal liability to pay damaes arisin out o!
elience in the per!ormance o! their pro!essional duties.
lar0et 2reement" applies to@ DoctorBmedical
practitioners (edical establishments 3nineers"
architects and interior decorators
Chartered accountants" !inancial consultants" manaement consultants
Pro!essionals are classi!ied into t#o broad cateories@
9i: Those #here pro!essional nelience may result in bodily in?uries 9!atal or other#ise:.
Doctors" dentists" etc. !all into this cateory.
9ri: Those #hose pro!essional nelience results in !inancial loss" li0e accountants" solicitors
etc.
9Loss resultin !rom bodily in?uries is incapable o! precise measurement. 2ssessment depends
< upon a number o! !actors such as the ae o! the claimant" earnin capacity" nature and type
Q o! in?uries" mental anuish etc.
Loss in second cateory can be measured #ith more certainty as it in$ol$es the calculation
o! actual !inancial loss sustained by the client.
The policies pro$ide !or the limits o! indemnity in any one year and in any one claim.
The o$erall structure o! these policies is the same as under industrial ris0s P.L. Policy #ith
many clauses" exclusions" conditions bein in common. %o#e$er" there are additional
exclusions #hich are speci!ic to each type o! pro!ession !or example" Doctor<s policy
exclude liability relatin to 2ID." cosmetic surery etc.
Activity C :
List at least !i$e incidents #hich lead to product.
)ROFESSIONA* INDEMNITY KDOCTORJS INDEMNITYE
The policy #ill indemni!y any act committed by the insured" #ho shall be reistered medical
practitioner" i$in rise to any leal liability to third parties. The insured includes policy
holder and his *uali!ied assistants or employees named in the proposal. The act has to be
committed durin the period o! insurance commencin !rom the retroacti$e date.
The rates are to be chared on 42ny one Iear4 limit and limit o! indemnity !or 2ny one
2ccident B2ny one Iear can be chosen in the ratio o! 1@1" 1@1 " 1@C and 1@5. and are
prescribed separately !or
957) 8eneral Physicians #ith B#ithout dispensin !acilities" 8eneral Radioloists B patholoists
958) .pecialist , Consultin Physician 9Non,.urical:
959) .ureons 9excludin specialists in plastic surery: lithotripsy" dentists and similar extra
corporal method o! treatment #ould !all in this cateory.
960) .ureons 9plastic surery: and anesthetists.
Un*uali!ied sta!! may be co$ered by charin extra premium on actual premium as applicable
by tari!!.
/or indemnity" any one accident limit #ould be 1KE o! any one year limit.
The schedule to the policy to sho# only 2OI limit e.. indemnity limit any one year.
JS$ Activity D:
8i$e reasons as to #hy the doctor<s indemnity policy became $ery popular.

1$.; MEDICA* ESTA"*IS%MENT )ROFESSIONA* NEG*IGENCE

93rrors and Commission Insurance Policy:
ITiis policy is desined !or hospital" nursin homes" dianostic center" patholoy laboratories
@tc.
The policy #ill indemni!y the insured in respect o! any act committed by the
pro!essional or *uali!ied assistants< names in the proposal enaed by the medical
establishment #hich i$es rise to any third party leal liability. .uch acti$ities #ill be part
o! the declared medical acti$ities o! the establishment.
Ratin:
Policy schedule to sho# only annual limit claim in respect o! any one person is limited
to 1K per cent o! 2OI limits.
Rate@ It depends on 2O2 to 2OI limit plus : Rs.KB, per each
in patient plus Re. IB, per out patient.
961)
Un*ual
i!i
ed
nursesBpara medical sta!!Btechnical sta!! additional 6.KE o! indemnity
premium.
962) Radioacti$e treatment 9other than U ray: additional premium o! 1KE on total
premium.
E>ce
7.1KE o! the 2OIlimit sub?ect to minimum o! Rs. 1777B, and a maximum o! Rs. 1"77"7776,.
-&l!ntary e>ce: Discount in premium is permissible as pro$ided !or in the 8eneral
Rules and Reulations.
.hort period policies are not permitted. In case insured desired cancellation" short period
scale rates as pro$ided !or #ill be applicable.
In the normal course" all claims !or compensation ha$e to be leally established in a court
o! la#. %o#e$er" insurers may arri$e a compromised settlement i! prima,!acie liability
exists under the policy.
Gr&!5 'ic&!nt
It is allo#ed to all policies under Pro!essional Indemnity Insurance. (ar0et 2reement
dependin upon the number o! members co$ered in the policy as per the slabs i$en
belo#@
No Discount KE 17E 1KE 17E
Activity E# )rite do#n t#o incidents in #hich pro!essional
liability is in$ol$ed.
386
Upto 177 (embers 171
to 1777 members 1771
to K777 members K771
to 17777 members
2bo$e 17777 members
g$ Activity F#
(r. Nene #as operated on !or cataract by Dr. =ale. +ut due to uncontrolled diabetes" he
became blind a!ter a !e# days. %e loded a complaint aainst the doctor reardin
carelessness durin the operation. .tate your opinion" ta0in into consideration the liability
insurance.
1$.( EM)*OYERJS *IA"I*ITY )O*ICY
This is also 0no#n as the #or0men<s compensation insurance. )hen accidents are caused
to the employees out o! and in the course o! employment" the policy protects the employers
aainst their leal liability !or payment o! compensation arisin as a result o! !ollo#in@
963) Death
964) Permanent or total disablement
i: Permanent or partial disablement O:
Temporary disablement
TaFle JAJc&ver: Pro$ides indemnity aainst the employer<s leal liability to his 3mployees
nder the Indian )or0men<s Compensation 2ct o! 1A=3, /atal 2ccidents 2ct o! 1NKK
and common la#. This may be issued !or only those employees #ho come #ithin the
de!inition o! <#or0men< under the )or0men<s Compensation 2ct. This insurance does
not co$er any interest and B or penalty #hich may be imposed on as insured on account o!
.O !ailure to comply #ith the re*uirements o! the said )or0men<s Compensation 2ct" 1P1C"
I as amended.
= TaFle J"J c&ver: Pro$ides indemnity aainst the employer<s leal liability to his employees I
under the Indian /atal 2ccidents 2ct" 1NKK" and common la#. This may be issued to i
co$er only those employees #ho are not <#or0men< #ithin the meanin o! that term under i
the )or0men<s Compensation 2ct.
? The policy does not speci!y any sum insured because the amounts o! compensation stipulated
i >in the 2cts or a#arded by a court o! la# determine the limits o! liability o! the insurers.
)or0men<s Compensation Insurance Tari!! has rouped the $arious trades accordin to
the ha&ard in$ol$ed" and has prescribed di!!erent rates o! premium !or di!!erent roups o!
trades. 8enerally" the rate is chared as a rate per mile o! the total earnins o! the employees.
The total earnins o! the employees cannot be accurately computed at the commencement
o! the policy. 2n estimate o! the total earnins is made and premium is chared thereon at
the commencement o! the policy. The premium is !inally ad?usted a!ter the expiry o! the.
policy" on the basis o! the actual total earnins o! the employees durin the period.
(edical expenses can be co$ered by charin extra premium.
The maximum compensation payable 9as per ).C. 2ct" 1PN5 o! Dec 1777:
965) Death resulted
966)Permanent total
967)Permanent partial as per E
o! loss o! earnin capacity.
968)Temporary disablement an
amount e*ual to K7E o!
monthly
M Temp disablement is payable only a!ter C days. Activity G:
<To a o$ernment contractor" )or0men Compensation Insurance is compulsory.4 )rite
do#n your $ie#s" 0eepin in mind the consideration liability in$ol$ed in the contract.
Notes@
1 The term earnins includes reular salaryB#aes" o$ertime" $alue o! boardin B lodin"
housin accommodation" bonus and all per*uisites" pri$ilees and bene!its in cash or
0ind.
(aximum
Compensation
Rs. 5"K6"7N76, !rom in?ury.
Rs. K"5N"5PL6,Disability
(inimum
Compensation
Rs. N7"7776,
Rs. P7"7776,
It $aries !rom 1 E to P7E
969) )aes ad?ustment statement should be obtained !rom the insured at the
rene#als
and premium to be ad?usted accordinly.
970) 2ctual earnin details should be submitted to company #ithin one month o! the
expire
o! the policy.
971) 2ll people should be included in the policy. .election o! only some people is
prohibited.
972) The pro$ision !or !uneral expenses to be deposited by the 3mployer #ith
).C.
Commissioner is Rs. 1"K77B,.
973) 2ll policies are to be issued !or 11 months except that@ Policies may be
issued !or a
period in excess o! 11 months #here an additional odd period is re*uired to ma0e a
policy rene#able on a particular date to meet the con$enience o! the Insured.
974) Policies may be issued !or a period less than 11 months in cases o! speci!ic
contacts
or #or0 #hich #ill be completed in less than 11 months pro$ided policies be #ritten
!or the !ull period in$ol$ed.
" E>cl!i&n:
i:
ii:
iii
:

T
h
e
p
ol
ic
y
d
o
e
s
n
ot
c
o
$er #ar and allied perils" Liability to employees o! contractor 9unless
speci!ically co$ered: 2ny employee #ho is not a #or0man #ithin the
meanin o! the la#s. 2ny contractual liability and such other as per
tari!!.
/or any in?ury not resultin in death caused by accident directly attributable to
)or0man under the in!luence o! drin0s o! drus.
)ill!ul disobedience o! the #or0man to an order expressly i$en or to a rule
expressly !ramed !or the purpose o! securin the sa!ety o! the #or0man.
c : )ill!ul remo$al or disreard by the #or0man o! any sa!ety uard Or other
de$ise #hich he 0ne# to ha$e been pro$ided !or the purpose o! securin his
sa!ety.
O It is important to note that i! a #or0man institutes a claim be!ore the
)or0men<s Compensation Commissioner !or damaes in respect o! his
in?ury" he cannot subse*uently !ile a ci$il suit
aainst his employer. On the other hand" i! he institutes a claim under Common La#"
he cannot subse*uently claim compensation under the )or0men<s Compensation
2ct. The #or0man cannot ta0e #ith both hands. %e has to choose his !orm o!
redressal.
a:
Fatal clai3
/ollo#in documents are re*uired to settlement the !atal claim@
2lon #ith claim !orm" death certi!icate" post mortem report" panchanama made by police
authorities" birth date certi!icate" #ae reister to certi!y #aes o! the deceased.
2s per act the compensation is calculated ta0in into consideration completed ae o! the
deceased at the time o! accident and monthly a$erae aes.
The compensation has to deposit #ith the Commissioner !or )or0men<s Compensation
and receipt o! commissioner is a su!!icient dischare !or the compensation payable under
the act.
)er3anent t&tal an' 5artial 'iaFle3ent:
In the ).C. 2ct" a list o! in?uries is pro$ided #hich result into permanent total and partial
disability. Loss o! earnin capacity in the !orm o! percentae is stated in the act and
accordinly compensation is calculated.
/or example@ Loss o! both hands is deemed to be permanent total disability resultin in
a 177E loss o! earnin capacity.
Loss o! thumb is permanent partial disability results into C7E loss o! earnin.
In case o! unscheduled in?uries" the loss o! earnin capacity is decided as per medical
certi!icate or ci$il sureon<s certi!icate.
The amount o! compensation is paid to the commissioner o! the #or0men<s compensation
or directly or the in?ured person.
I! the amount is deposited #ith the commissioner" then it has to be reistered alon #ith
#aes statement and medical certi!icate.
Te35&rary DiaFle3ent
The compensation payable is hal! the monthly salary speci!ied in the act i! in?ury results in
temporary disability.
I! the disablement is more than 1N days or more" then the compensation is payable !rom
the date o! disablement and i! it is less than 1N days" compensation is payable a!ter C days
#aitin period !rom the date o! disablement.
The compensation is paid hal! monthly durin the period o! disablement or K years" #hich
is shorter. The disability period is depends on the medical certi!icate.
& Activity %:
2 #or0man o$erloo0s instructions and remo$es the machine uards desined to pre$ent
accidents. 2s a result" he loses t#o !iners. Comment on the liability o! the employer.
1$.+ SUMMARY
In this unit" #e ha$e discussed about $arious types o! liability insurances. In product liability
insurance" the liability arises due to the use o! de!ecti$e products. In the last !e# years"
product liability la#suits ha$e increased.
In the chanin en$ironment" heihtened consciousness o! rihts" increasin demands o!
compensation and pro!essional indemnities are essential co$ers.
)e ha$e also discussed the employers liability #hich co$ers the liability arisin durin the
course o! employment.
In nutshell" liability insurance comes in handy in sa!euardin your li!e" liberty and property
aainst un!oreseen ris0s in a modern economy.
1$., 0EY1ORDS
2ccident arisin out o! and in the course o! employment.
This is a prime condition to et compensation under the employer<s liability policy.
In'e3nity )eri&'
)r&'!ct *iaFility In!rance
The period" beinnin #ith the date o! the damae"
durin #hich the turno$er o! the business is a!!ected
by that damae. It lasts until the turno$er reco$ers
and reaches the point at #hich it #ould ha$e been"
had the loss not occurred" or till the expiry o! the
maximum indemnity period , the number o! months
selected by the insured , #hiche$er occurs !irst.
Protection aainst !inancial loss arisin out o! the
leal liability incurred by a manu!acturer" merchant"
or distributor because o! in?ury or damae resultin
!rom the use o! a co$ered product.
@ It is a co$er ranted to pro!essionals li0e doctors"
co$erin their leal liability !or any claims arisin out
o! pro!essional misconduct.
@ The !irst date !or #hich claims #ill be paid under a
claims,made policy o! liability insurance.
@ 2 system o! pro$idin !or the cost o! medical care
and #ee0ly payments to in?ured employees or to
dependants o! those 0illed in the course o! or arisin
out o! their employment in industry in #hich absolute
liability is imposed on the employer" re*uirin him
or her to pay bene!its as prescribed by la#.
)e ha$e enclosed $arious proposal and claim !orms in the annexure !or your ready re!erence.
1$.. SE*F6ASSESSMENT 7UESTIONS ________________________________
Hl. De!ine product liability.
H1. Discuss the liability arisin in li!t insurance.
HC. 3numerate the salient !eatures o! the 3mployer<s Liability Insurance. %o# does it
di!!er !rom other normal policies'
H5. De!ine the use o! doctor< s
indemnity insurance. HK (atch
the !ollo#in@
975) .tate 8o$t 9a:
976) Third Party 9b:
977)Pro!essional Indemnity 9c:
978).0in Reaction 9d:
979).ue 9e:
)r&4ei&nal In'e3nity
Retr&5ective Date
1&r9erJ C&35enati&n
Doctor
Criminal Liability
Product Liability
(otor Insurance
Draed into Court
1$.1/ 2NN3UUR3

The Ne0 I#'i* I#"!r*#e Co8(*#$ Li8i+e'
, 87, MlSltfl TTO ttft, we 3^5 ?00 001.
Hegd. & Head Office New ndia Assurance Bldg., 87, M. 6. Road, Fort, Mumbai - 400 001
$ftW Wlfefl : WW ^HT, 'H fdft, faf ite, yf W. 3BT. 411 004 Regional Office :
Slwda Centre, 2nd floor, Off Karve Road, Pune - 411 004.
PROPOSAL FORM FOR DOCTORS AND MEDICAL PRACTITIONERS PROFESSIONAL INDEMNITY
This proposal must be signed. All questions must be answered. The completion and signature of this proposal does not
bind the proposer or insurer to complete a contract of nsurance.
f there is insufficient space to answer questions, please use additional sheets and attach it to this form. The Company
doss not assume any liabilities until the proposal has been accepted and premium paid,
980) Name of Proposer
981) a) Residential
Address
b) Clinic Address
982) a) Professional Qualifications and the yearof such
qualifications
b) n which branch of medicine viz. Allopathy/
Homeopathy / Ayurvedic /Any other please
specify.
4) a) Medical Registration No.
983)Year of Registration
984)How long have you been practicing
,.' Are you a member of any Medica! Association/
council
f so please state Name and Address of such
Association/Council with membership No.
B) Ate you
985)General Practitioner/ General Physician
986) ' 'ogist
.?! .. .. ,5 . '
d) naestnet(St/Plastic Surgeon
Note: if speciaiist, please specify your line of
specification,
a) Specify facilities such as dispensing facility,
X-ray, radiation, therapy, scanning EGG,
Sonography, MR,etc..available/operatedby
you or under your control. b; Are these facilities
being maintained through
regular service contracts with the manufacturers/
specialised servicing Agencies ?
987)f these facilities are operated by the employees,
Please state their () Name (ii) Technical
Qualification (iii) experience and (!>/) Name of
the facility operated, (please use separate sheet)
988) Please
indicate whether you v.-
J
1he
policy cover, out of the above .who
are qualified to operate the facmty mentioned
against their names.
9] a) i) Are you attach to /or attending as a visiting
Physician/Surgeon in any Hospital/Nursing
Home / Clinic etc. if yes please give details
ii) Are you in service with any organisation ? f yes,
please give name and address of the same
b) Are they cover under a Medical Establishment
-Errors & Omission Policy.
989)State the average number of patients you are
attend ing per day.
990)Have any cl ai m made upon you or l egal
proceedings instituted or likely to be nstituted
against you by patients in respect of your treatment
etc., if so please give details.
991)Have you been previously insured for the subject
risk ?
f so, give full particulars,
13) Has any Company
992) declined your proposal.
993) required an increased premium.
994) refused to renew your policy
995) cancelled such a policy.
14) State the limits of indemnity required
996) Any one Act
997) Any one limit -Rs.
N. B. Please note that Limit of ndemnity for Any
One Accident/Any One year can be chosen
in the ratio of 1:1, 1:2, 1:3 & 1:4
15) Period of nsurance -from To,
/ We do hereby declare that the above statements and answers are true and that / We have not withheld any
.information whatsoever regarding the proposal. / We hereby declare that all statutory provision relating to rny / our
business proposed for insurance are complied with i / We agree that this proposal and declaration shall be the basis of
the contract between me / us and.................................Co. Ltd..whose policy for the insurance proposed is acceptable
to me / us. / We undertake to exercise all ordinary and reasonable precautions for safety of the property as if it were
uninsured.
Date: Place:
SIGNATURE OF PROPOSEJ

De;elo(8e#+ OffierD" Re(or+ >
The Proposer is known to me / my Agent for
Date@
Place@
years and i recommended acceptance of this proposal.
SGNATURE OF DEVELOPMENT OFFCER
NAME AND CODE NO. OF DEVELOPMENT OFFCER
Note : 1) The liability of the company does not commence until proposal has been accepted by the Company
and premium paid 2) Premium will be
quoted on application.
SECTION ,- OF THE INSURANCE ACT, -<=:
PROHI7ITION OF RE7ATES
1 No person shall allow or offer to allow either directly or indirectly as an inducement to any person to take out or
renew or continue an insurance in respect of any kind risk relating to lives of property in ndia any rebate of the
whole or part of the commission payable or any rebate of the premium shown on the policy nor shall any person
taking out or continuing a policy accept any rebate except such rebate as may be allowed in accordance with the
prospectus or tables of the nsurer.
2. Any person making default in complying with the provisions of this Section shall be punishable with fine which
may extend to Rs. 500/-
Unit 1$ *iaFility In!rance 6 II
TH*. N&W IMPIA ASSUKANCc" CO'PAN& LIMIfiSD
Regd & Head ftf fice i New India Assurance Building,
87, Ma!at"a #and!i R$ctd
f
B$"%a& ' ()) ))*
LIAB
Oi< T%I. /OR( I. NOT TO .ii I;$=.N F.
NO"
MuA(I..ION O/
+!e c$",leti$n and return $f t!is t$$n t$ t!e -$",an& s!$uld n$t
%e dela&ed if an& of t!e ,articulars re.uired cann$t %e i""ediatel&
gi/en +!e& "a& %e f$rwarded t$ t!e -$",an& afterwards as s$$n as
,$ssi%le 0If s,ace fauna insufficient ,lease attac! se,arate
s!eet1
*2 0a1 Na"e of Insured
0%1 Address
()E* +ual,-,cat,.n
998) P.l,c/ Nu0ber
999) Per,.1 .- P.l,c/
1000) Li"its $f Inde"nit& under t!e P$lic&
2.
Part,culars .- Inc,1ent
(a* $ate .- Occurance (b*
Place .- Occurance
(c* W3. ,s 1,rectl/ res4
5 5 - ' .
5 6 . 78
, 49 :7::7"
;.ns,ble f$r t!e
,n<ur/l.ss =
#i/e details of
treat"ent
3 0a1 W!$ !as "aae t!e clai" $n &$u 45
0If clai" !as %een "ade in writing2
attac! a c$,& $f t!e de"and6legal
n$tice recei/ed and $f t!e %ill, if
an&, su%"itted1,
(b* Na0e an1 a11ress .- t3e Pat,ent5
1001) His age and $ccu,ati$n
1002) W!en dia !e first c$nsult
1003) His general ,!&sical c$$aiti$n
1004) #i/e full ,articulars $f an&
$t!er
rele/ant as,ects2
Registrati$n N$
(1*
(7 A"$unt8 clai"ed as da"age fr$" &$u t
97 0a1 #i/e t!e na"es and addresses $f t
Pers$ns >3. witnessed t3e incident:
0%1 Has t!e incident %een re,$rted ;
t$ IM- $r an& $t!er aut!$rit& 5
If s$, state t$ w!$" and attac!
a c$,& $f t!e re,$rt su%"itted
le1 W!at acti$n, if an&2 !as %een ta<en
%& t!e aut!$rit& =
>2 #i/e ,articulars $f $t!er insurance t
if an& In res,ect $f t!e sa"e ris<
72 Has an& clai" %een "ade u,$n &$u %ef$re
I6We t!e a%$/e na"ed, d$ !ere%&, t$ t!e %ast $f ra&6$ur <n$wledge a
%elief, warrant t!e trut! $f t!e f$reg$ing state"ents in e/er&
res,ect: and I6We agree?t!at if I6We !a/e "ade, $r in an& furt!er
declarati$n t!e -$",an& "a& re.uire in res,ect $f t!e said acciden
s!all "a<e an& false $r fraudulent state"ent, $r an& su,,ressi$n
$r c$nceal"ent8 a&6$ur clai" s!all %e a%s$lutel& f$rfeited, and t!e
P$lic&, s!all %e null and /$id
W,tness t Signature Na"e
Address
Insured2s Signature uate

@RA6nu
*B*)B=
Date
Form No, AC-SOfHj
Regl, Offie : Sharda Centre, 2nd Fir, Nal Stop, Karve Rd., Pune - 41 1004,
He*' Offie : New ndia Assurance Bldg. 87, M.G.Road, Fort. Mumbai 1 .
HPROPOSATTFROM TOfl55OR6MENDS COMPENSATION INSiCRANCE
Details o! in Cover
THE NDAN WORKMEN'S COMPENSATON ACT 1923 : The Act provides for the payment of compensation by the Employer to his f*rtp!oyse? (for
their dependants in the event of fatai accidents} if personal injury is caused to them by accidents arising out of and tn the ;:ouf>6 of their employment
the compensation payable under the Act depends upon the age factor and average monthly wages of the workman (as per WC.
Afiu-ndrr-enr Act, 1984), The maximum compensation payable for the following injuries is as follows ;
Fatal injury Rs. 4.67.0BO/'-
Permanent total disablement Rs, 5.48.496A
' -' ..............-.-....< ,,...,,.,. i-Jing to incapacity caused,
;r partial A half monthly payment of the- sum equivalent to 25% of monthly wages of the
(*. - us payable on me 16 th day.
. ,-..,., ,,-^ ,;.:,,- ui j.^du'cincMi wti( such disablement lasts tor a period of 28 days or more or
;\ After the expiry of a waiting period of 3 days from the date of disablement where such disablement where such lasts for a penod of iess than
28 @ays, and thereafter half monthly during th disablement or during s period of five years whichever period is shorter
THE COMMON FATAL ACCDENTS ACT. 1855 ;Thfs Act enables claims for damages upto an unlimited amount to be maintained against a person who
by his wrongful act negiact or default causes the death of another.
THE COMMON LAW :The Common Law gives a person the right to claim from another, damages upto an unlimited amount for injury or toss
sustained on account of the negligence of such other person or of his Servants acting tn the scope of their Employment
NSURANCE : The responsibility of the Employer s therefore serious and one that might involve him in a heavy financsa* ioss if nol protected by
nsurance.
The New ndia issues policies that give the Employer any of the following three forms of cover;
TABLE A - indemnity against the Employer's legal liability to his Employees under the ndian Workmen's Compensation Act, 1923 and subsequent
Amendments of the said Act prior to the date of issue of the policy under the ndian Fatal Accidents Act, 1855 , and ai commor! Law,
c,'-f!ijfi! aot taifure to Company v, , <msrVs Compensation Act T923 as arnenaed.
IN ADDITION THE COMPANY 7EARSTHE COSTS AND EFPENSES INCURRED WITH ITS
WRITTEN CONSENT INTHE SETTLEMENT OF CLAIMS
Proposer's Name in Full ______~
Propser's Business Address ___.
Proposer's Trade or Occupation^.
Particular of Work_____________
SCHEDULE (Alt persons Employed meal he Covered)
OesaipUOfi of Employees Number of
Estimated Annual Wages. Salaries and otfler
Earwigs nsurance f-f O hceusoooiyi
, (4)
(if any)" (*)
(5)
'A' or 'B'oi
pfospectus (6!
per rriiiie
Wodk T 6, i iw j f t vd c i j. Ai
Or
11 1 * 1
J T 13
fts.
-~ Rs
^
M. J i- ig ivto 10
j M
r j t, j
AfT ounl
p, Rs.
(*-,* HS
^ ^ --------------
^
: : : :
- ......... . . TOTAL 8s
Rs. !
The total amount of wages, salaries and other earnings (*i' &$ me/us during me past twelve months was Rs._______,
Do you wish to insure your liability under ndian Wof kmen's's Compensation Act, 1923 and subsequent amendments of
i.e. of "Contractors'" as defined in the Act See note')
tone ot Fjti'Jstaiisofworh n case for which ihe n case for which the Ra?e Premium
ContriJCW subject {specify exact coniract is for labcw^r contract is tor labour and per
nature o! wjfk) oniy,siate total materials, stats total mater:-.- . , -grit, cent
amount of coniraci of amount of coniracs of siatu total amount of
wages paid wages paid contracf or wages paid
Rs. ____., Rs ___ ,_, ______ ....... Rs. ... ....... __________ Rv _ __
Rs Rs, Rs.
TOTAL PREMUM
o-
)r&5erty P *iaFility Insurance
NOTE : the Workmen's Compensation Act, 1923, states thai where any person (the "Principal") in the
course of or for the purposes of his trade or business contracts with any other person (the "contractor
1
') for
the execution by or under the contractor of the whole or any part of work which is ordinarily part of the trade
or business or the principal the later is a liable in respect of accident to the Contractor's workmen happening
or in or about the premises on which the Principal has undertaken or usually undertakes to execute the work
or which are otherwise under his control or management. n such cases the Principal is entitled to be
indemnified by the Conratractor.
1.
Does the above Schedule include : (a)
Ail persons in your service ? (b) All your
Contractors?
(a) (b)
2. Are your premises a Factory within meaning of Factory - Acts,?
3.
(a) Have you any circular saws or other machinery driven by steam gas,
water, electricity or other mechanical power ? f so, give full particulars.
(rjj Are your machinery plan! and ways property fenced and guarded and
otherwise in good order and condition ?
(a)
{b}
4.
(a) s your boiler registered under the ndian Boiler Act, 1923? (b) !f
not. under what conditions it is exempted from such registration ?
(a) (b)
5,
State what acids, gases, chemicals or explosives will be used and to what
extent ?
6,
Are you ai present insured or have you ever proposed for an insurance in
respect of your liability to your Employees ?
f so. please give the name/s of the Company or Companies.
7,
Has any proposal for an insurance in respect of your liability to your
employees or renewal there of ever been declined or withdrawn ?
(a) Declined (b)
Withdrawn
8. State the total wages paid and particulars of accidents to your Employees during the past three yeais :
Year
Total Wages (Salaries
and other earning)
Fatal
Number Cost
Settled
Permanent Disablement
Number Cos!
Settled
Temporary Disablemnt
only-Number
Cost Settled
19 Rs Rs Rs. . .. Rs
19 Rs Hs. Rs._ ................. Rs
R-^ Rs Rs
Claims Still Unsettled
Number, Estimated Cost
Rs.
Claims Still Unsettled
Number, Estimated Cost
._........... Rs.
Claims SWi Unsettled
Number. Estimated Cosl
Rs.
9 Porinrt n inenranro roniurnrf Fmm To
1005) Do you wish to extend the policy to include medical expenses ? f so, please indicate the limit
per case-required.
1006) Tha nsurance under Table A may be extended on the following scale to provide for the
payment of medical,
surgical and hospital expenses (including cost of transport to hospitals) incurred by the insured :
1007) Limit Rs. 80/- per case 12 1/2 %
Additional Premium
Limit Rs. 12Q/- per case ^5% Additional Premium
Limit Rs. 16G/- per case 17 1/2% Additional Premium
Limit Rs, 40G/- per case 20% Additional Premium
Limit Rs. SOOA per case 25% Additional Premium
limit Re. 1600A per case 35% Additional Premium
Limit Ra, 24QO/- per case 45% Additional Premium
1008)_________________Limit per case Rs.
/We thfs undersigned. ihis nay ot
20 desife to eifec: an insurance in terms of me policy to be issued by the Company
iiabfirtyasabove mentioned /We agree to remissat (he end of each period o! insurance, a slate-mans 5% (he torm
.
:
>lfy paid ano to pay premium on any wages paid \r, excess of ine amount estimated above /we hereby
declare "s which i/We have read over and Kf>ecke<j are taie, ihat !/We ftavo not suppressed misreprsseniad or
misstated j;d my/our loisi wages end salaries expenditure, and /We agree ttiat ttus declaration shall be the
b^sis of the Assurance Company Limited.
Signature of Proposer
ProposaHofm ompiered by
Proposa! introduced by
Name and signature of Agent / inspector
PROHBTON OF REBATES
The foiiowng is the copy of Section 41 of the insurance Act, 1938 :
{1} "No person shall aiiow of offer to allow, either directly or indirectly as an inducement to any person to lake out or renew
or confi r m .. yectof any kind of risk relating to lives or propery in ndia, any redate of the whole or part
C:

;
-
>e

{
-
f v
'
f
^bate of the premium shown, on the Policy, nor shall any person taking (Bt or renewing
or
--ants!.,....................- , ., .-,ny rebate except such rebates as may be aliwoed in accordance with the published
parson making defauit m complying wilh the provision of this section shall be punishable v fi hundred rupees."
fin fine which may extend
Anil Apporv - 10/2003 < 10,000 Forms
1009) Insurance Practice by 8.C.2. Dic0son" The Chartered Insurance Institute.
1010) Insurance Principles and Practice by (.N. (ishra" .. Chand Y Co." Ne#
Delhi.
TGe 4&ll&Cin: )!Flicati&n &4 In!rance &4 Intit!te &4 In'ia
J Principle o! 8eneral Insurance.
J Practice o! 8eneral Insurance.
J Insurance +usiness 3n$ironment.
J /ire Insurance Under#ritin.
J /ire Insurance Claims.
J (arine Under#ritin.
J (arine Insurance Claims.
J 2ricultural Insurance.
J (otor Insurance.
J Personal 2ccident" .ic0ness and (iscellaneous Insurance.
J Liability Insurance.
J 3nineerin Insurance.
J 2$iation Insurance.
J (iscellaneous 2ccident Insurance.
22O
2O
2sst.
+(
+O
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Property and Liability Insurance

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Property and Liability Insurance

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Property and Liability Insurance

The liabilities #hich re*uire compulsory insurance are as under,

Property and Liability Insurance

Lakshmj 2000 7-S2

1$.; MEDICA* ESTA"IS%MENT )ROFESSIONA NEG*IGENCE

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