Professional Documents
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I
Tariff Advisory Committee, Mumbai
1-1-01
THE TARIFF ADVISORY COMMITTEE (HEREINAFTER
CALLED THE COMMITTEE) HAS LAID DOWN
RULES, REGULATIONS, RATES, ADVANTAGES,
TERMS AND CONDITIONS, AS CONTAINED
HEREIN, FOR TRANSACTION OF MACHINERY
BREAKDOWN INSURANCE BUSINESS IN INDIA IN
ACCORDANCE WITH THE PROVISIONS OF PART
II B OF THE INSURANCE ACT, 1938.
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Tariff Advisory Committee, Mumbai
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MACHINERY BREAKDOWN INSURANCE POLICY
INDEX
Contents Pages
4. RATING SCHEDULE -
43
4.5. Declined list of Machines
4.6 Excess 44
6 ENDORSEMENTS - 48-57
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Tariff Advisory Committee, Mumbai
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GENERAL REGULATIONS AND INSTRUCTIONS -
Upto 05 30
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Tariff Advisory Committee, Mumbai
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Above 50 and upto 60 Nil Nil
Loading and Discount will apply for proposals in respect of risks where the
Sum insured is in excess of Rs. 10 Crores in their compounds. In case more
than one policy is issued in one compound and if their aggregate sum
insured exceeds Rs. 10 Crs., all such policies issued in the compound shall
attract the loading/discount.
For Sum Insured upto Rs. 10 Crores, there will not be any discount
applicable and full Tariff Rates are to be charged. The Proposals with the
Sum Insured less than Rs. 10 Crores already rated by TAC shall, however,
continue to be guided by the above scale of Discounts/Loading until the
Claims Experience during 5 years preceding the expiry policy warrants
neither loading nor discounting over the Tariff Rates.
Notes –
i) The loss experience discount will be decided taking into account
the claims experience during the 5 years preceding the expiring policy
period. To become eligible for earning a discount, the policy should
have run continuously for a period of 3 years. Loading if any, however,
shall become applicable from the second year onwards.
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Refund of premium for standstill period can be considered under this
Policy.
12 months 50 %
The risks will be eligible for the standstill discount only when the claims
experience under the policy for which the discount is sought is less than
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60 % and that the standstill discount will not apply during overhauling
period (including Hydraulic Testing of Boiler Tubes under BPP Policies).
Note –
a) No such refund is allowed for seasonal industries like sugar factories.
However, the rate applicable for machinery shall be 95 % of the rate for
equipments for such seasonal factories. The decision of applying 95% of
the rate for equipment in respect of seasonal factories is applicable for
policies issued on annual basis only.
b) Refund of premium for standstill period can be considered for Diesel
Generating Sets.
The order for calculating the discounts will be first discount for good
features and then discounts for higher excess
The maximum total discount on account of claims experience, higher
excess and any other reasons will not exceed 50 %.
For extending the period between successive overhauling from 32,000 hrs/
4 years to 48,000 hrs/6 years whichever is earlier, the excess shall be
revised as 25 % of the claim amount subject to a minimum of 150 % of Tariff
excess.
This concession can be allowed only, when the health of the machine is
certified by the manufacturer or any competent agency in the field.
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Whenever the MB proposals are received only during the overhauling of
the turbines and/or turbine generating sets, MB cover should not be
granted to such turbines or TG sets (either on annual or short period basis)
until overhauling is completed.
13 a) The rates given in the guide are minimum rates. The Machines to
be rated should be in worthy working condition with proper preventive
maintenance programme. Safety devices wherever provided on the
machines must be in proper operating condition.
14. The tariffs are not exhaustive, in the sense, that all possible machines
are not listed in the tariffs. Machines, whose names do not appear in
the tariff, are "Special Purpose Machines" and will have to be
individually rated looking to their Special Features by the Committee.
Items, which are not specified in this Tariff, should be rated provisionally
at minimum rate of 1.0 % and a reference should be made to TAC for
obtaining final rates, terms and conditions.
20. Cover for part of machinery and Gear Boxes under Machinery
Insurance (MI) Policy -
Turbine,
Alternator
Gear Box,
Control Panel
Cables
No further break-up of the components will be acceptable. Also
the turbines, alternator (including excitor) and gearboxes would be
rateable at 1.50 % / 1.75% as the case may be and control panel
and cable would be rateable as per Tariff for electrical items.
If the risk is insured under short period scale, refund may be calculated at
pro-rata of the short period scale premium provided such cancellation is
followed by an annual policy for sum insured not less than the sum insured
under cancelled policy. Otherwise, retention of premium shall be on short
period scale.
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For the sum insured not replaced in the renewed policy after
cancellation, refund must be calculated after charging premium on such
sum for the time insurance was in force on short period scale subject to
retention of minimum premium by the Insurer.
b) If the policy is renewed thereafter for 12 months for an amount not less
than the increased sum insured, the difference of premium between
short period scale of rate and pro-rata rate may be refunded.
Short period scale of rates shall apply on the reduced Sum Insured.
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**********
STANDARD POLICY FORM
GENERAL EXCEPTIONS –
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water containing apparatus, flood, inundation, storm, tempest,
earthquake, volcanic eruption or other Acts of God, impact of land
borne or waterborne or airborne craft or other aerial devices
and/or articles dropped therefrom.
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7 Liability assumed by the insured by agreement unless such liability
would have attached to the insured notwithstanding such
agreement.
SPECIAL EXCLUSIONS –
PROVISIONS -
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1. SUM INSURED –
2. BASIS OF INDEMNITY –
The Company will make payments only after being satisfied, with
the necessary bills and documents that the repairs have been
effected or replacements have taken place, as the case may be.
The Company may, however, not insist for bills and documents in
case of total loss where the Insured is unable to replace the
damaged equipments for reasons beyond their control. In such
cases claims can be settled on „Indemnity Basis‟.
All Mechanical and Electrical parts of any steam turbine, gas turbine
or generator upto 30,000 KW shall be inspected and overhauled
thoroughly under the supervision of Maker's representatives, in a
completely opened up state at least every two years: for turbines or
generators exceeding 30,000 KW such inspection and overhaul shall
take place after 32,000 hours of operation or every four years. The
cost of inspection and overhauling shall be borne by the Insured and
a copy of the Report issued by the Maker's representative on such
inspection and overhauling shall be furnished to the Company
immediately after the work has been carried out.
The Insured shall arrange for these regular inspections in such a way
as to enable the company's representative to be present at the
inspection at their own expenses. The Company shall be notified at
least seven days in advance of the commencement of any
overhauling necessary according to expert opinion.
If the insured fails to comply with the requirements of his condition, the
Company shall be free from all liability for loss or damage caused by
any circumstances, whatsoever.
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The insured may apply for an extension of the period between any
two regular inspections, and such extension may be considered if in
the opinion of the Company the risk is not aggravated thereby.
4. CONDITIONS –
a) The Insured shall take all reasonable steps to maintain the insured
property in efficient working order and to ensure that no item is
habitually or intentionally over loaded. The Insured shall fully
observe the manufacturer's instructions for operating, inspection
and overhaul, as well as government, statutory municipal and all
other binding regulations in force concerning the operation and
maintenance of the insured plant and machinery;
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b) The Company‟s Officials shall at all reasonable times have the
right to inspect and examine any property insured hereunder and
the Insured shall provide the Officials of the Company with all
details and information necessary for the assessment of the risk.
The Company shall provide the Insured with a copy of the
inspecting Official‟s report; which shall however be treated as
strictly confidential both by the Insured and the Company.
In the event of any occurrence which might give rise to a claim under
this Policy the Insured shall -
The Company shall not be liable for any loss or damage of which no
notice and completed claim form have been received by the
Company within Fourteen days of its occurrence.
The liability of the Company under this Policy in respect of any item of
property sustaining damage, for which indemnity is provided, shall
cease if the said item is kept in operation without being repaired to
the satisfaction of the Company.
7. OTHER INSURANCE –
If at the time any claim arises under this Policy there is any other
insurance covering the same loss damage or liability the Company
shall not be liable to pay or contribute more than its rateable
proportion of such loss damage or liability.
b) As from the day of loss the Sum Insured for the remainder of the
period of insurance is reduced by the amount of the
compensation. To prevent under insurance during the remainder
of the current period of insurance the amount insured must be
reinstated. The premium will be calculated pro-rata from the day
repaired item is again put to work. For subsequent period of
insurance the original indemnity and premium are again in force
unless circumstances justify an alteration.
9. TRANSFER OF INTEREST –
10.TERMINATION OF INSURANCE –
11.RECOURSE –
The Insured shall at the expense of the Company do and concur in
doing and permit to be done all such acts and things as may be
necessary or required by the Company in enforcing any right or
remedies of obtaining relief or indemnity from parties (other than
those insured under this Policy) to which the Company shall be or
would become entitled or subrogated upon their paying for or
making goods of any loss damage under this policy, whether such
acts and things shall be or become necessary or required before or
after the Insured's indemnification by the Company.
12.ARBITRATION –
If any dispute or difference shall arise as to the quantum to be paid
under the policy (liability being otherwise admitted) such difference
shall independently of all other questions be referred to the decision of
a sole arbitrator to be appointed in writing by the parties to or if they
cannot agree upon a single arbitrator within 30 days of any party
invoking arbitration the same shall be referred to a panel of three
arbitrators, comprising of two arbitrators, one to be appointed by each
of the parties to the dispute/ difference and the third arbitrator to be
appointed by such two arbitrators and arbitration shall be conducted
under and in accordance with the provisions of The Arbitration and
Conciliation Act, 1996.
It is clearly agreed and understood that no difference or dispute shall
be referable to arbitrations as herein before provided, if the Company
has disputed or not accepted liability under or in respect of this policy.
It is hereby expressly stipulated and declared that it shall be a
condition precedent to any right of action or suit upon this policy that
award by such arbitrator/ arbitrators of the amount of the loss or
damage shall be first obtained.
********* **
SCHEDULE
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Tariff Advisory Committee, Mumbai
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Premises/Works Address ____________________________________________________
(Site of the property to be insured)
Period of Insurance -
Examined _______________
Entered________________
Duly Constituted Attorney (s)
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_______________________________________________________________ Co. Ltd.
(The liability of the Company does not commence until this proposal has
been accepted by the Company and premium paid).
b) Proposer's Trade or
Business _______________________________________
a) Nearest Railway
station and distance
b) required an increased
premium or imposed special Yes No
conditions?
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b) If so, give details thereof b) ___________________________________
7. On payment of additional
premium do you wish to cover If yes, provide limits of indemnity
the following?
Or %age ________
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SCHEDULE OF MACHINERY TO BE INSURED –
I/We, the undersigned hereby declare that the above statements and
particulars are true and complete and I/We declare and agree that this
declaration and the answers given above shall be held to be promissory
and shall be the basis of the contract between me/us and the Company.
Place __________________
PROHIBITION OF REBATES –
ii) Any person making default in complying with the provisions of this
Section shall be punishable with fine, which may extend to five
hundred rupees.
****** ***
RATE SCHEDULE
Group I
Electrical Machinery installed in Plants other than Cold Storages and Ice
Plants –
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100816 (ii) 1. Power and Distribution
Transformers. 1.25 *
Ir-respective of whether
they
have OLTC (On Load Tap
Changer) or not.
2 % of Sum Insured
101419 2. Furnace Transformers 2.00
subject to a minimum
of Rs. 250/-
3. Rectifiers -
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102319 iii) Where only
engine of 2.00
the D.G. set is to be
covered
Notes –
i) For claims on Diesel Generator Sets necessitating
replacement of crankshaft, 20 % of the cost of crankshaft
replacement will be borne by the insured in addition to the
Excess stipulated above.
ii) In respect of Items No. 2 (b) & (c) above the prescribed rates
will apply ir-respective of whether the Turbine/Generator are
covered separately or together.
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Group II
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201107 Bending Machines 0.60
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202703 Condensers, Chillers,
Evaporators and Pre- 0.40
heaters.
Composing Machine -
203308 i) Computerised 0.65
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Dairy & food Processing
204405 Machines not otherwise 0.50
specifically provided for
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206307 Ejector System 0.60
Furnaces -
206513 i) Arc Furnaces 1.00
with Roof Lifting &
Tilting Mechanism
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209410 Hammer Mills 0.75
Lifts/Lifting Tackles -
Endorsements for Ropes
211008 i) Chain Pulley 0.65 in lifts, cranes & Rope
Blocks Ways.
Notes -
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i) Equipments/Instruments made of glass will be rated as per item
„Glass lined Vessels‟.
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223212 Nitrogen Plant (modular) Rated under item "Gas
(with loss or damage to Generator"
molecular sieve being
excluded).
PRESSES -
216603 Hand Presses 0.40
Pumps -
Note: If a single value is given for the entire pump-set the higher rate
of the Drives should be applied overall.
Pressure/Reaction Vessels -
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i) Glass/graphite As per Item „Glass & Graphite‟
lined
PLASTICS MFG.-
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218113 Rolling Mill (hot) 1.00
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218816 Steam Turbines 1.50
Textile Mills -
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220503 vii) Other Machines 0.40
Please refer item „Steam/Gas Turbines‟
Turbines -
220603 Thermic Fluid 0.40
Heaters
220705 Tabletting and Capsuling 0.50
Machines
Sum Insured - Single Valuation for Wind Mill inclusive of Tower, Wind
Turbine Generator, Controller, Wind Turbine Generator, Yaw motor,
Hydraulic Motor, Capacitor, Lightning arrestor wind mill Blades and
Power Cables.
The Transformers and associated electrical switchgears in the Sub-
Station/yard would be rateable differentially
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Group III
Machinery in Cold Storages and Ice Plants
Risk Sr. No Item Rate (%) Excess Remarks
Code
Power Machines -
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Ancillary Machines -
GROUP IV
Fertilizer Plants/Petrochemical Plants/Refineries
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400614 d) ID/FD
fans with 1.25
drive
Drives -
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EXCLUDED UNDER MB POLICY
(DECLINED LIST OF MACHINES)
a) Stone Crushers
b) Rolling Mill-Stands, Pedestal bearing etc.
Raymond Mill
c) PVC lined, Rubber lined and such other lined vessels
d) Radios, Tape Recorders, TV Sets and Electric and Electrical measuring
instruments
e) Any Imported Machinery which cannot be repaired in the country
f) Cupolas and Oil fired furnaces
g) Pumps-with glass, graphite, rubber impellers
h) Pipe lines
i) Computers and other Electronic Equipments (To underwrite under
Electronic Equipment Insurance Policy)
j) Portable and Mobile Equipments
k) Urea Scrubber, )
LP Scrubber, )
Ammonia Scrubber, ) in Fertilizer- appearing in group IV
Ammonia Storage Tanks )
************
EXCESS (APPLICABLE TO ALL MACHINERY)
1. NORMAL EXCESS - Unless and otherwise specifically mentioned the
following Excess will apply -
Equipment Excess against each claim
a) Excess applicable for Glass Lined Vessels, Glass & Graphite equipments -
Excess shall be 10 % of Sum
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Insured for each claim.
b) For other items -
i) Furnace Transformers Excess shall be 2% of Sum
Insured subject to minimum of
Rs. 250/-.
ESCALATION PROVISION -
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additional premium to be paid in advance. The terms and conditions
for this extension shall be as follows -
ADDITIONAL RATES -
The rate and excess as under shall be charged exclusively for items of
air freight only and subject to the limit selected by the Insured for
indemnity against air freight only.
The cover for Additional Custom Duty will be subject to the following
rates, terms and conditions -
a) the cover for Additional Custom Duty will be on first Loss Basis,
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Rate 2 % to be charged on the Additional Custom Duty amount
selected
ENDORSEMENTS -
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1. ESCALATION CLAUSE –
Unless specifically agreed to the contrary the provisions of the Clause shall
only apply to the sums insured in force at the commencement of each
period of insurance.
(i) the Sums to be Insured under each item above, but in the absence of
such instructions the Sums Insured by the above items shall be those
stated on the policy (as amended by any endorsement effective prior to
the aforesaid renewal date) to which shall be added the increases which
have accrued under this Clause during the period of Insurance upto that
renewal date, and
All the conditions of the policy in so far as they may be hereby expressly
varied shall apply as if they had been incorporated herein.
2. EXPRESS FREIGHT –
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Provided always that such extra charges are incurred in connection with
any loss of or damage to the insured items recoverable under the policy.
If the sum(s) insured of the demand item(s) is/are less than the
amount(s) required to be insured the amount payable under this
endorsement for such extra charges shall be reduced in the same
proportion.
3. AIR FREIGHT –
It is hereby declared and agreed that the Policy shall also indemnify
towards Air Freight incurred by the Insured in connection with the
indemnifiable loss under the Policy.
The Company will pay to the insured the value of the damaged property
at the time of accident or at its option reinstate or replace such damaged
property or any part thereof provided that -
The liability of the Company shall in no case exceed Rs.____ for any
one accident or series of accidents arising out of any one event and in
the whole the total indemnity of Rs.____ during the currency of the
Policy.
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The insured shall bare the same excess as mentioned in the schedule
of the policy.
a) against legal liability for the accidental loss or damage caused to the
property of other persons.
The Company will not indemnify the insured, under this extension in
respect of -
a) The first amount of policy excess of each claim for any one
occurrence related to property damage.
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ii) loss of or damage to property belonging to or held in trust by
or under custody of the owner of the works/site/ premises/ location
of any other firms/contractors or an employee/workmen/family
members of any of the aforesaid.
iii) any accident caused by vehicles licensed for general road use
or by waterborne vessels or by aircraft.
Each and every claim payable under the extension shall be subject to an
Excess of 5 % of the admissible Additional Customs Duty incurred and will
be in addition to the Excess amount applicable for the affected item under
the Policy.
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The Indemnity for such Additional Customs Duty will stand reduced after
occurrence of the claim unless reinstated by payment of an additional
premium prescribed by the Company.
8. FURNACE ENDORSEMENT –
a) INDUCTION FURNACE -
‘It is hereby declared and agreed that the damage to the refractory
lining due to any cause is specifically excluded’.
b) ELECTRICAL FURNACES -
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iii) Warranted that the refractory linings are examined each time
the furnace is recharged and linings renewed, if any defects are
apparent. Further, the linings are, in any event, replaced
periodically in accordance with the Maker's recommendations.
‘It hereby declared that any loss or damage payable under the
policy to the cylinder head, liner and piston of the Diesel/oil
engines insured here will be indemnified subject to –
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13. PLASTIC EXTRUDERS/INJECTION MOULDING MACHINES –
It is hereby understood and agreed that the Insurance by this policy does
not cover any loss or damage to the dies, moulds and heating elements
used on the Plastic Extruder/Injection Moulding Machines.
Subject otherwise to the terms, conditions and exceptions of the policy.
Warranted by the Insured that except when the load is being transferred
from one machine to another the No. ____ etc. insured under this policy
shall only work alternately with No. ____ etc. Insured under this policy.
The plant may be turned over periodically for maintenance purpose only.
If the plant is to be used otherwise than as above the Insured shall forthwith
notify the Insurer and pay such additional premium as may be required by
the Insurer failing which the Insurer’s liability thereon shall cease.
Provided always that if the standby machine shall be used otherwise than
as above the Insured shall forthwith notify the insurer and pay such
additional premium as may be required by the Insurer failing which the
Insurer's liability thereon shall cease.
16. BAKERIES –
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The indemnity provided by the policy does not extend to include cost
incurred/time involved in the movement of machinery and/or any other
property insured hereunder and/or personnel outside the territorial limits of
India other than the cost of delivery or replacements for machinery lost or
damaged.
It is hereby declared and agreed that the indemnity granted by this policy
in respect of glass lined production plant described in the Schedule is
restricted to cover losses due to accidental damage or external impact
and not any loss or damage arising out of wear and tear, general usage
and/or cracking of the glass lining due to continuous working and/or
fatigue subject otherwise to the terms, exceptions, conditions and
limitations of the Policy.
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21. WIND MILLS ENDORSEMENT –
The Insured may apply for an extension of the period between overhauls.
Such extension shall be granted if in the opinion of the Insurers the risk is
not aggravated thereby.
If the Insured fails to comply with the requirements of this Endorsement, the
Insurers shall be free from all liability for loss or damage caused by any
circumstance which could have been detected had an overhaul taken
place.
The Insured shall arrange at his own expense an overhaul (the Insured
shall inform the Insurer of such an overhaul in good time so that the
Insurers' representatives may be present during the overhaul at the
Insurers' expense) in a completely opened-up state after 8,000 hours of
operation or after 500 start-ups or at least after two years following the last
overhaul.
New electric motors shall be overhauled after 2,000 hours or at least after
one year of operation. The insured shall supply the Insurers with reports on
this overhaul. These provisions shall apply regardless of the
commencement date of the insurance cover.
The Insured may apply for an extension of the period between overhauls.
Such extension shall be granted if in the opinion of the Insurers the risk is
not aggravated thereby.
If the Insured fails to comply with the requirements of this Endorsement, the
Insurers shall be free from all liability for loss or damage caused by any
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circumstance, which could have been detected, had an overhaul taken
place.
*********
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