Fire & Engineering Insurance

 Standard Fire & Special Peril Policy for

1. Dwellings
2. Shops, Hotels, Offices etc.
3. God owns
4. Factories
5. Utilities

 For large Corporate IAR Policy can be given

 Engineering Policies Comprises of

1. Project Policies- CAR & EAR
2. Non Project Policies- MBD,CPM,EEI,BPPI
FIRE POLICY
 Standard Fire & Special Perils Policy
( Material Damage )
1. Fire.
2. Lightning.
3. Explosion / Implosion.
4. Aircraft Damage.
5. Riot, Strike, Malicious Damage ( RSMD ).
6. Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood
& Inundation (STFI).
7. Impact Damage by Rail / Road vehicle or animal.
8. Subsidence and Landslide including Rockslide.
9. Bursting and/or overflowing of water Tanks, Apparatus and
Pipes.
10. Missile Testing Operations.
11. Leakage from Automatic Sprinklers Installations.
12. Bush Fire.
Add on covers (on additional prem.)
 A ,S and C.Engineers’ fees in excess of 3% of claim
 Removal of Debris in excess of 1% of claim
 Spontaneous Combustion
 Earthquake
 Terrorism
 DOS(Deterioration of stock) in cold storages
 Impact damage due to insured’s own vehicle
 Omission to insure additions, alterations or extensions
 Leakage and contamination
 Loss of rent
 Additional rent
 Start up expenses
Loss of Profit Policy
 Business Interruption
 Reduction in turnover or output
 Burden of Fixed Charges/ Expenses

 Need to insure :
Loss of Gross Profit
Increased Cost of Working
IAR POLICY ( PACKAGE POLICY FOR LARGE CORPORATES WITH SUM
INSURED GREATER THAN 100 CRORES)
ENGINEERING POLICIES

1. PROJECT/NON 1. NONPROJECT/
OPEARTIONAL/NON ANNUAL/OPERATIONAL
ANNUAL POLICIES: POLICIES:
2. More than 12 months 2. No installment facility
installment facility available.
3. N/3-1= no.of installment
4. 5%+ equated share of
installment= first
installment.
PROJECT POLICIES

1. CONTRACTOR ALL RISK POLICY ( CAR)

2. ERECTION ALL RISK POLICY ( EAR/)
OR MARINE CUM STORAGE CUM ERCTION
POLICY.
3. ALOP (ADVANCED LOSS OF PROFIT)
 CAR POLICY
1.This is an Insurance Policy which we offer to clients who are engaged in Civil Works OR where the value of Civil
Works is more than 50% of total Contract value.
2. Cover starts from the time of commencement of work or after the unloading of the property specified
in the schedule from any conveyance at the site specified in the schedule whichever is earlier and shall
expire on the date specified in the schedule. However, the Company’s liability expires also for parts of
the insured contract works taken over or put into service by the Principal prior to the expiry date specified
in the policy whichever shall be earlier.

EXTENSIONS AVAILABLE IN CAR POLICY

 Additional Customs Duty
 Air Freight
 Express Freight
 Escalation
 Owner’s Surrounding Property
 Third Party Liability
 Clearance and Removal of Debris: excess applicable
 Construction Plant and Machinery
 Maintenance Cover
 Extended Maintenance Cover
 Deletion of Exclusion for Breakage of Glass
 Terrorism
 Design Defect DE2 & DE 3 Cover
 CAR POLICY

 Sum insured definition: complete erected value

1) Import & indigenous Landed cost of material(inclusive freight & custom)
2) cost of civil construction
3) Permanent civil Engineering works
4) Half of the escalated value ,if escalation opted.
5) Pre operative expenses
 Premium adjustment: Allowed only for
1. custom dues and construction cost
2. freight and handling charges
3. Change in prime cost of material shall be not subject matter of premium adjustment.
 Mid term increase of S.I.: CAR rate chargeable
CAR POLICY
 Refund of premium: Double/abandonment/early

i) The period of insurance is 18 months and above;

ii) Notice for early completion being given in advance to the insurer before completion of the
project.

iii) claims experience under the policy being less then 60

iv) The original policy period is not exceeding the contract period as per contractual clause. In the
absence of the existence of the contract, the scheduled project period as per original bar
chart should be the policy period.
The minimum period for which refund can be claimed shall be 3 months.
 ERECTION ALL RISK POLICY
 Basic concept of EAR Insurance is to offer comprehensive and adequate protection against all the site risks involved in the erection of plant and machinery.
 It covers Storage, Erection And Testing of all kinds of Individual machines such as turbines, generators, boilers, compressors, transformers etc. Complete
projects such as power stations, fertilizer factories, chemical plants, paper plants, cement mills etc.
 It provides combined and continuous cover.
 It takes care of the risks exposure of all the parties to the contract.
 It eliminates gaps in cover.
 Cover commences from the time any plant equipment / machinery leaves the manufacturers’ / suppliers’ warehouse for transit;
 Continues during transit until arrival at erection site;
 During storage and erection operations till testing and commissioning for commercial operations.
Additional Covers
 Earthquake (Fire & Shock).
 Clearance & Removal of Debris.
 Third Party Liability. Upto 10% of S.I. Or 10 cr whichever is lower.
 Cross Liability.
 Surrounding Property of the Insured.
 Escalation.
 Express freight (Air Freight Excluded), Holiday & Overtime Rates of Wages .
 Air Freight.
 Additional Customs Duty.
 Design defect cover 'DE4' as per Munich Re wording
 Maintenance visits Cover & Extended Maintenance Cover.
 Terrorism Cover.
 Dismantling Cover on 60% of SCE rate and if testing also to be covered then Rs.0.50%0 per month.
 Storage Risk at Fabricators Premises / Workshop.
 Construction Plant & Machinery. *
* For SI up to 5% of EAR/SCE SI or Rs.25 lacs whichever is lower can be covered under EAR/SCE policy at rates & excess as per
CPM tariff.

For SI exceeding 5% of EAR/SCE SI or Rs.25 lacs whichever is lower, the same has to be separately covered under CPM policy.
ERECTION ALL RISK POLICY
Sum insured definition: complete erected value
1) Import & indigenous Landed cost of machines(inclusive freight & custom)
2)Cost of Erection (exclusive of preoperative expenses but inclusive of cost of visits of specialists
and supervision charges).
3) Permanent civil Engineering works
4) Half of the escalated value ,if escalation opted.

Premium adjustment: Allowed only for

1. custom dues and erection cost
2. freight and handling charges
3. Change in prime cost of plant & equipments shall not be not subject matter of premium
adjustment.
Mid term increase of S.I.: EAR/SCE rate chargeable
ERECTION ALL RISK POLICY

1. Test run for thermal power plant:

The entire Power Station machinery are deemed to have commenced their first test operation or
test loading from the date of synchronisation of the Turbo Generator set with the grid
system/bus bar provided the date of synchronisation is within 72 hours from the date of
introduction of steam into turbine and shall continue till the Turbo Generator Set is operated
at full load for a continuous period of 72 hours or until expiry of testing period granted under
the policy whichever is earlier. If, however, the date of synchronisation exceeds 72 hours from
the date of introduction of steam of the first trial operation test loading is deemed to have
commenced from the date of introduction of steam into the turbine of the Turbo Generator set.
2. Test run ofr other plants:Testing period available under the policy shall cease to operate
with the commencement of the commercial production or with the handing over of the plant to
the principal whichever is earlier .
ERECTION ALL RISK POLICY
 Suspension of testing period: suspension period in excess 7days .
 Catelyst cover : A.) SCE rate applicable if included in S.I.
B) During hot testing it is covered with Rs.20 & separate excess is applied.

 REFUND OF PREMIUM FOR EARLY COMPLETION OF THE PROJECT -

Refund of premium for completion of the project earlier than the period mentioned allowed subject
to-
a) The period of insurance is 18 months and above.
b) Notice for early completion being given in advance to the insurer i.e. before commencement of
testing or in any case not later than 7 days after commencement of testing.
c) Claims Experience under the policy being less than 60 %.
d) The minimum period for which refund can be claimed shall be 3 months.
DESIGN DEFECT COVER
Clause Paid Not Paid

All damges are

DE-5 Improvement in design not paid
paid
Other property
DE-4 Damaged defective component
damages
Other property
DE-3 Damaged defective Property
damages
Other property Damaged defective property and
DE-2
damages defective support
Other than
All losses caused due to design
DE-1 design defect
defect
loss
ADVANCE LOSS OF PROFIT(ALOP)

 Who can take: Only principal

 What is covered : Gross profit(projected)
 Standing expenses plus net profit
 Increase cost of working
 Risk covered: Any accidental damage covered under CAR and
EAR policy.
 Instead of monetary excess time excess is applicable
 30 days for first 12 month+1 days for each month for normal risk.
 45 days for first 12 month+1 days for each erection month for specialized .
 Excess Limited to 60 days and 75 days max for normal & spl.
PROJECT INSURANCE FABRICATOR
- MARINE & LOCAL
STORAGE CUM SUPPLIER
INTERMEDIATE
- ERECTION STORAGE

CIVIL CONST
SITE STORAGE
ERECTION
TESTING
COMMN.
FOREIGN
SUPPLIER PORT

CONSTRUCTION OPERATION
MCE FIRE
INTERMEDIATE
TRANSPORT EAR (SCE) FLOP
OFFSITE OR
MARINE (IMPORTS) CAR MB
STORAGE
MARINE (LOCAL)
MARINE LOP
ADDITIONAL
TRANSIT
TPL
CPM MLOP IAR
BOILER

ALOP EEI
NON PROJECT POLICIES

1. MBD POLICY
2. CPM POLICY
3. EEI POLICY
4. BPPI POLICY
5. CECR
6. DOS
7. MBLOP
 MACHINERY BREAKDOWN POLICY( MBD POLICY)
 SUBJECT MATTER OF INSURANCE
ALL TYPE OF MACHINERIES USED FOR PRODUCTION ( SMALL, BIG, MEDIUM, HIGH SPEED/LOW
SPEED,OLD MACHINERY).
 SCOPE OF COVER
Electrical / Mechanical Breakdown of Machineries.
MBD
 Can not be issued on agreed value basis.
 Refund for standstill machine can be allowed if standstill is more than 3
months.(due to major loss or shortage)
 Prohibition to insure EEI equipment such as
audio/visual/medical/computer equipments in MB policy.
 CNC like machines can covered either in EEI or MB.
 Minimum premium Rs.100/-
 Cancellation: On insured request: Short period retention
On insurer option: prorata refund.
 Mid term increase of S.I.: short period on increased amount ,if renewed
then difference of prorata & short period can be refunded.
MBD
 Decrease in S.I.: Short period rates applied on reduced S.I.
 Standby spares /equipment :can be covered on 50% policy rat except DG sets.
 Transfer of interest: By will or operation of law & must be endorsed.
 Termination of insurance: can be done any time by insured Premium will be kept on short
period,
 Insurer can terminate by giving 15 days notice to insured by stating reason and refund will
be on prorata.
 Escalation: Upto 25% increase on regular basis ,rate 50% of policy rate.
 CONTRACTOR PLANT & MACHINERY
 SUBJECT MATTER OF INSURANCE
Any Machinery/Equipment used for material handling purposes; under writing of which otherwise are restricted
under MBD Cover. Whether registered with RTO or NOT.
Example are Fork Lift Trucks, Tunnel Boring Machines, Cranes, Conveyor belts, Bulldozers, Road Rollers
,excavators, loaders, dumpers, diving equipments, hauling equipments, to name a few.

 Risks Covered
Accidental external Damage, Sudden & Unforeseen, Lossess caused during cleaning, overhauling and re
erection after commissioning.
 RISKS NOT COVERED
Electrical/Mechanical Breakdown material damage or Consequential loss.
 Loss during transit from one site of construction to other.
 Loss during test run

 Sum insured
Present day replacement value of mobile/ material handling machine, including there in all incidental expenses like
freight, duty, taxes, labor charges, etc.

 EXTENSION/ADD ON COVER
THIRD PARTY LIABILITY
OWNER’S SURROUNDING PROPERTY BELONGING TO INSURED OPERATING AT CONSTRUCTION
SITE
LIFTED OBJECT IN THE HOOK OF CRANE
Contractor Plant & Machinery
 Floater policy can be provide on 10% loading for specified location.
 Dismantling and re-erection of machine: On extra premium of Rs.0.20%.
 Escalation: upto 25% and on 50% of policy rate
 Cancellation of insurance: Prorata and short period
 Increase of S.I.: Short period on increase amount.
 Transfer of interest: By will and operation of law
 Termination of insurance: Insured: Short period,Insurer: prorata.
 Basis of settlement:
 A) In case of repair all cost payable including dismantling ,re erection freight,
custom upto the extent they were included in S.I.
 B) In case of total loss depreciation will be deducted from replacement cost.
 ELECTRONIC EQUIPMENT INSURANCE (EEI POLICY)
 SUBJECT MATTER OF INSURANCE
ELECTRONIC DATA PROCESSING M/C
COMMUNICATION EQP.
TRANSMITTING & RECEIVING EQP.
ELECTRO-MEDICAL EQP.
SIGNAL & TRANSMITTING EQP.
CONTROL & SUPERVISORY SYS.
OFFICE EQUIPMENT (AGE : - NOT MORE THAN 10 YEARS )
 COVER
SUDDEN & UNFORSEEN PHYSICAL LOSS/ ALL RISKS
 EXCLUSIONS
WEAR & TEAR CORROSION
FAULT FOR WHICH THIRD PARTY RESPONSIBLE
AESTHETIC DAMAGE
INTERNAL BREAKDOWN
PROVISIONAL REPAIR
MODIFICAION RECTIFICATION
FAILURE DUE TO INTERUPTION POWER GAS WATER
P C B NON FUNCTIONAL
BULBS, VALUES, RIBBONS, FUSES,
GLASS, CERAMICS, PORCELEIN
EEI POLICY

Policy covers:
I) Equipment ii) Data Media iii) ICOW

If AMC waived of then load 50% & 100%

Fire & allied perils can be deleted by allowing 10% &
5% discount of tariff.

Cancellation of insurance: Prorata and short period.

Mid term increase of S.I.: short period on increased amount ,if renewed
then difference of prorata & short period can be refunded.
EEI POLICY
DUTIES FOLLOWING AN ACCIDENT-
In the event of any occurrence which might give rise to a claim under this
Policy, the Insured shall-
a) immediately notify
b) take all steps within his power to minimise the extent of the loss or
damage;
c) preserve the parts affected and make them available for inspection
d) furnish all such information
e) inform the police authorities in case of loss or damage due to theft or
burglary .

The Company shall not in any case be liable for loss, damage or liability of
which no notice has been received by the Company within 14 days of its
occurrence.
 BOILER & PRESSURE PLANT INSURANCE ( BPPI)
 SUBJECT MATTER OF INSURANCE
STEAM BOILERS.
WASTE HEAT BOILERS.
PRESSURE VESSELS ( FIRED & UNFIRED)

 SCOPE OF COVER
EXPLOSION
COLLAPSE
FLUE GAS EXPLOSION

 EXCLUSIONS
FIRE & ALLED PERILS.
OVER LOAD TEST.
CHEMICAL EXPLOSION.
INDIVIDUAL TUBE
GRADUAL WEAR & TEAR LEAKAGE, CORROSION CRACKS,
BLISTER, BULGING LAMINATION, FRACTURES

 WARRANTIES
QUALIFIED PERMISSION.
OPERATOR CERTIFIED.
INDIAN BOILER REGULATION (IBR)
 EXTENSIONS
THIRD PARTY LIABILITY
OWNERS SURROUNDING PROPERTY.
BOILER & PRESSURE PLANT INSURANCE ( BPPI)


Policy can not be issued o first loss basis

Policy can not be issued on agreed value basis.

Escalation add on not available.

Refund of premium allowed for standstill for more than
3months due to shortage or major loss.

MID-TERM INCREASE IN SUM INSURED -

If the Sum Insured is increased during the currency of the policy.
Short period scale of rates shall apply to increased amounts.

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.
MID-TERM DECREASE IN SUM INSURED -
If the Sum Insured is decreased during the currency of the policy,Short period
scale of rates shall apply on the reduced Sum Insured.
BPPI
DEFINITIONS --

‘Boiler’ shall mean any fired closed vessel or a combined container piping system
in which steam is generated under pressure.

‘Pressure Plant’ shall mean any unfired closed container under steam gas or
fluid pressure.

‘Explosion’ shall mean the sudden and violent rending or tearing apart of the
permanent structure of a Boiler or Pressure Plant or any part or parts thereof
by force of internal steam gas or fluid pressure causing bodily displacement of
the said structure and accompanied by the forcible ejectment of its contents.

‘Collapse’ shall mean the sudden and dangerous distortion of any part of Boiler
or Pressure Plant by bending or crushing caused by Steam Gas or Fluid Pressure
whether attended by rupture or not. It shall not mean any slowly developing
deformation due to any cause.

‘Flue Gas Explosion’ shall mean an explosion of ignited gases in the furnaces or
flues of the boilers, economisers and super heaters.

‘Chemical Explosion’ shall mean an explosion arising out of chemical reaction in
any plant.
Civil Engineering completed Risk(CECR)

Subject matter of insurance : The following civil structures can
be covered under CECR:
Bridges,Dry docks,Harbours,Jetties,Railway lines,Rock Filled dams,Concrete
dams,Earthen,dams,Canals,Irrigation system,Tunnels,Water
reservoirs,Weirs,Runways,Water pipelines.

Scope of cover:

Fire.

Lightning.

Explosion/Implosion.

Riot, Strike, Malicious Damage and Terrorism as per Riot, Strike and
Malicious damage clause.

Impact by any Rail/Road or water borne vehicle or animal.

Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and
Inundation, Wave action of water.

Subsidence and Landslide (Including Rockslide) damage.

Earthquake Fire and Shock (Including flood due to earthquake), Tsunami

Frost, avalanche, ice
Civil Engineering completed Risk(CECR)

Like fire it is named peril policy.

Clearance of debris covered for selected S.I.

S.I. Must be replacement value of the damaged property
including overhead charges.

Cancellation of policy: Insurer: Prorata,insured:short peri

Increase of S.I.: short period for increased amount

Decrease in S.I.: Short period rates on reduced s.i.

Policy does not covers: war,nuclear ,burning by govt.,sub terrain
fire,loss by theft except RSMTD,willful act, gross negligence ,wear &
tear ,consequential loss,first 15 days from policy start but continuous
renewal then this is not applicable.
Deterioration of stocks(DOS)

Scope of cover: Damage to Materials inside the cold storage due to
sudden & unforeseen failure of refrigeration plant.

Subject matter of insurance: Fish,potatoes,vegetables etc.It is
consequential cover i.e. loss first must be admitted in MB.

Type of cold storage:
New cold storage:First time/break in insurance will be treated new
Existing cold storage:Already insured.

Declaration facility: For S.I. Rs.50lakhs and above & 12 Month Period

Failure of stand by DG set is covered only with FOES extension.

MB cover must be there and from same office to admit DOS loss.

FOES cover given in DOS only is 16 hour electricity supply is there.

DOS cover with FOES cover can not be given if stand DG set is not there
Deterioration of stocks(DOS)

Minimum premium Rs.1500/- or 60% of total premium.

Refund of premium on 120% of rate & min.for 7 months.

NOT COVERED:

Collapse of racks is not covered

Explosion is not covered as it is covered in fire .

Damaged due to fire and allied perils is not covered.

Damage at public electricity supply due to fire and allied
perils,war,nuclear,radioactivity is not covered.

First 8 hours not covered.

Failure of parts,non operation of fuses & safety parts,escape of
refrigerant from chamber.
Machinery loss of profit

Scope of cover: Turnover out put basis loss of
Gross profit : standing charges+net profit
Increased cost of working

Indemnity period : 3 months to 36 month

Rate of Gross Profit:
Rate of Gross Profit per unit earned on the output during the financial year immediately before
the date of damage.

Standard Output:
Output during that period in 12 months immediately before the date of damage which
correspond to indemnity period.

Annual Output:
The output during 12 months immediately before the date of damage.
Q
THANK YOU