ENGINEERING INSURANCE

Engineering Insurance - STATUTES AND

REGULATIONS in India
General -
 Indian Contract Act 1872
 Insurance Rules 1939
 Indian Stamp Act, 1899-
 Insurance Act 1938
 The Insurance Regulatory and Development Authority
Act 1999
Specific -
 Indian Factories Act 1948
 Safety Rules of Plant & Machinery
 The Indian Boiler Act 1923
 The Indian Mines Act 1952
PROJECT INSURANCE /
CONSTRUCTION STAGE:
1. CONTRACTOR’S ALL RISK INSURANCE ( CAR )

2. ERECTION ALL RISK INSURANCE (EAR/SCE)

3. MARINE-CUM-ERECTION INSURANCE (MCE )

4.ADVANCE LOSS OF PROFIT (ALOP )

5. DELAY IN START UP INSURANCE (DSU )

OPERATIONAL PHASE :
1. MACHINERY BREAKDOWN INSURANCE (MB )

2. ELECTRONIC EQUIPMENT INSURANCE (EEI)

3. BOILER & PRESSURE PLANT INSURANCE (BPP)

4. CONTRACTORS PLANT & MACHINERY (CPM )

5.DETERIORATION OF STOCKS INSURANCE(DOS)

6. MACHINERY ,LOSS OF PROFIT INSURANCE (MLOP)

CONSTRUCTION PHASE
ASSUME A PROJECT OF THERMAL POWER
PLANT - THE STEPS INVOLVED ARE :

• FINALIZATION OF LAND/ SITE

• CLEARING THE SITE / CLEANING THE SITE (PRE –
OPERATIVE EXPENSES)
• PURCHASE OF MACHINERY (IMPORT /
INDIGENOUS)
• CONSTRUCTION OF BUILDING
• ERECTION OF MACHINERY
• TESTING
• COMMERCIAL PRODUCTION
 TO
GRID

C
T
2

T
1
B
A

HEAT

A – ALTERNATOR T 1 – TURBINE
B – BOILER T 2 – TRANSFORMER (STEP UP)
C - CONDENSOR
POLICIES RECOMMENDED ARE

1. EAR / SCE + MARINE

OR
2 . MCE

EAR / CAR – All risk policy

CAR – When civil work > 50%
 EAR CAR
ALL RISK Yes Yes
COVERAGE
ERECTION Yes Yes
COVERAGE

TESTING Yes No
COVERAGE
MINIMUM POLICY 1E +1T months 3 months
PERIOD

PERIOD FROM Date of arrival of first Date of arrival of first

consignment at consignment at
sitesite/starting of any site/starting of any
work related to the work related to the
project at site project at site

PERIOD TO DOE / Date of DOE / Date of handing

Commercial production over to principal
ERECTION ALL RISK
(EAR/SCE)
• CONCERNED WITH ERECTION OF PLANT AND
MACHINERY.

PARTIES INVOLVED IN A PROJECT:

• PRINCIPAL
• ENGINEERING CONSULTANT
• CONTRACTOR
• SUB - CONTRACTOR
• MANUFACTURER
• FINANCIER
CONTRACTORS ALL RISK (CAR )

CONCERNED WITH CIVIL WORK

CIVIL ENGINEERING PROJECTS LIKE DWELLINGS, FACTORIES,

DAMS, ROADS, ETC.

POLICY MAY BE ISSUED TO (PARTIES INVOLVED IN A PROJECT)

• PRINCIPAL
• ENGINEERING CONSULTANT
• CONTRACTOR
• SUB - CONTRACTOR
• MANUFACTURER
• FINANCIER
ERECTION ALL RISK
(EAR/SCE/CAR)

SCOPE OF COVER:
• LOCATION RISKS: FIRE, THEFT, BURGLARY,
• HANDLING RISKS: IMPACT
• TESTING & COMMISSIONING RISKS: LEAKAGE
OF ELECTRICITY, EXPLOSION
• RISK OF HUMAN:CARELESSNESS,STRIKE,RIOT,
FAULT IN ERECTION
• A.O.G.: STORM,TEMPEST,FLOOD, EARTHQUAKE.

POLICY PERIOD :
FROM: DT. OF ARRIVAL OF MATERIAL AT SITE
ERECTION ALL RISK (EAR/SCE/CAR)

SUM INSURED= PROJECT COST

• BASIC COST OF IMPORTED ITEMS

• BASIC COST OF INDIGENOUS ITEMS
• CUSTOM DUTY
• INCIDENTAL EXPENSES
• ERECTION COST
• ESCALATION(half of escalation amount)
• SUM INSURED is adjustable on completion of
construction on the basis of actual values in respect of
construction cost,freight custom duties and handling
charges (increase/decrease in prime cost of material not
to be taken into account)
ERECTION ALL RISK (EAR/SCE/CAR)

EXTENSIONS:
• Expediting cost including express freight, air freight
• Additional custom duty
• Owners surrounding property
• C.P.M.
• Maintenance covers (Maintenance visit cover & Extended
maintenance cover)
• Earthquake
• Clearance & removal of debris
• Third party liability with cross liability
• Loss minimisation expenses
• Professional fees
• Offsite storage & fabrication
• Escalation
• Design defect cover-as per DE2 & DE3 wording(for CAR ) &
DE4 wording (for EAR)
 PREMIUM RATING
CAR TARIFF RATES VARY ACCORDING TO TYPES OF
CONTRACT WORK. e.g.

• RESIDENTIAL, COMMERCIAL BUILDING

• THEATRES, AUDITORIAMS .
• FACTORIES
• ROAD BRIDGES.
• DAMS
RATING ALSO DEPENDS ON PROJECT PERIOD

EAR TARIFF RATES VARY ACCORDING TO TYPES OF

PLANT/MACHINER BEING ERECTED SUCH AS
• TEXTILE M/C
• TG SETS
• COMPRESSORS
• PAPER MILL
RATING ALSO DEPENDS ON ERECTION PERIOD &
TESTING PERIOD
ERECTION ALL RISK (EAR/SCE/CAR)

REFUND OF PREMIUM ALLOWED FOR EARLY

COMPLETION SUBJECT TO
TERMS/CONDITIONS
 To qualify Refund for early completion under project
insurance
 a)Period of insurance should be more than 18 months
 b)Claims experience should be less than 60 %
 c)Minimum period for claiming refund is for 3 months
ERECTION ALL RISK (EAR/SCE) EXCLUSION:

GENERAL
• WAR,& WARLIKE OPERATION
• NUCLEAR REACTION
• WILFUL NEGLIGENCE OF INSURED
• CESSATION OF WORK (TOTAL/PARTIAL)

MATERIAL DAMAGE
• EXCESS
• LOSS WHILE TAKING INVENTORY
• NORMAL WEAR & TEAR
• FAULTY DESIGN, DEFECTIVE
MATERIAL/DEFECTIVE WORKMANSHIP
• PACKING MATERIAL
CONTRACTORS ALL RISK (CAR )
EXCLUSION:
GENERAL
• WAR,& WARLIKE OPERATION
• NUCLEAR REACTION
• WILFUL NEGLIGENCE OF INSURED
• CESSATION OF WORK (TOTAL/PARTIAL)

MATERIAL DAMAGE

• EXCESS
• NORMAL WEAR AND TEAR
• FAULTY DESIGN.
• LOSS DISCOVERED AT TIME OF INVENTORY.
• FILES, DRAWINGS, ,CHEQUES ETC.
• PACKING MATERIAL.
• VEHICLES LICENSED FOR ROAD USE
• PENALTIES UNDER CONTRACT
• BREAKAGE OF GLASS
EXCESS
Excess is applicable per incident
Separate Incident – Freedom from perils for 7
consecutive days(Projects up to 100cr)
MAJOR PERIL=AOG+COLLAPSE+WET RISK
CAR EAR
STORAGE & CONSTRUCTION STORAGE & ERECTION
CLAIMS CLAIMS

MAJOR PERILS AOG /MAJOR PERILS

FIRE/EXPLOSION
MAINTENANCE PERIOD TESTING &MAINTENANCE
CLAIMS PERIOD CLAIMS
 EXCESS
STORAGE 10% of claim amount subject to a
minimum of testing period excess
for AOG/Fire/Explosion claim.
Rs 5000 for other perils

MAJOR PERILS/ AOG PERILS (Earth 10% of claim amount subject to a

quake, STFI, Landslide , Road slide, minimum of Testing period excess
Subsidence, Lightning) with an upper limit of Rs.5 Crore.

FOR FIRE UNPROTECTED SITES

Having SI < 50 Crores 10% of claim amount subject to a
minimum of testing period excess
with an upper limit of 2 crore.

Having SI > 50 Crores 20% of claim amount subject to a

minimum of testing period excess
with an upper limit of 3 Crore.
EARTH QUAKE
 EQ RATES BASED ON ZONES.
 NO MID TERM COVER.
 EQ RATES APPLIED ON PRO RATA BASIS AS PER
PERIOD OF POLICY.
 HIGHER EXCESS DISCOUNT APPLICABLE
 COVER MAY BE GRANTED ON FIRST LOSS
BASIS.

SUM INSURED % OF TARIFF RATE

20% 50%

10% 40%
THIRD PARTY LIABILITY
FOR POLICIES WORTH TPL SI

SI <= 10 CRORE UPTO 1 CRORE

SI > 10 CRORE 10% of completely erected value or Rs 10

crore whichever is lower

 TPL COVER CANNOT BE REINSTATED.

 CANNOT BE GRANTED DURING EXTENDED

MAINTENANCE.
EXPRESS FREIGHT (Holiday and Overtime
rates of wages)
Reinstatement of SI after occurrence of loss is
possible.

AIR FREIGHT
Reinstatement of SI after loss is possible.
Additional Excess – 5% Air Freight incurred.

ADDITIONAL CUSTOMS DUTIES

Reinstatement of SI after loss not possible.
Additional excess – 5% of ACD.
MAINTENANCE VISITS COVER AND
EXTENDED MAINTAINANCE COVER
CAN BE GRANTED ONLY AT INCEPTION

MAINTENANCE Damages caused by

VISITS COVER Contractors, Employee
negligence

EXTENDED As above + Damage

MAINTENANCE occurring during
maintenance period
provided such
loss/damages was caused
during Erection Period.
TEST RUN DEFINITIONS OF
THERMAL POWER PLANT

STARTING OF TESTING PERIOD

Date of synchronization of TG set with the grid
system provided date of synchronization is
within 72 hours from the date of introduction of
steam.
ELSE
Date of introduction of steam
TEST RUN DEFINITIONS OF
THERMAL POWER PLANT
END OF TESTING PERIOD
TG set is operated at full load for a continuous
period of 72 hours/ DOE of testing period in the
policy whichever is earlier.
MAXIMUM TESTING PERIOD ALLOWED
6 months
FOR OTHER PROJECTS
12 months
A CLAIM IS TO BE REPORTED WITHIN 14 DAYS OF ITS
DETECTION.

INSURED MAY CARRY OUT REPAIRS/ REPLACEMENT OF ANY

MINOR DAMAGE UP TO RS 7500/-

CANCELLATION OF POLICY AT THE REQUEST OF THE

INSURED IS SUBJECT TO THE FOLLOWING CONDITIONS.
a) CLAIMS EXPERIENCE AS ON DATE OF CANCELLATION
SHOULD BE LESS THAN 60% OF REWORKED PREMIUM.
b) THE UNEXPIRED PERIOD IS NOT LESS THAN
3 MONTHS OR 25% OF POLICY PERIOD WHICHEVER IS
LESS.
c) TESTING PERIOD SHOULD NOT HAVE COMMENCED.
 PREMIUM ADJUSTMENT AFTER
COMPLETION OF PROJECT
PREMIUM ADJUSTMENT AFTER EXPIRY OF THE
POLICY IS POSSIBLE FOR
 FREIGHT
 CD
 HANDLING CHARGES
 COST OF ERECTION

IT IS NOT POSSIBLE TO HAVE PREMIUM

ADJUSTMENT FOR
 PRIME COST OF P&M
 ESCALATION PREMIUM COLLECTED
INSTALLMENT FACILITY

Period (T)>12 months

First installment(I1 shall be 5% more
compared to other equal
installments(I2,I3……In).
Minimum interval between installments-
3months
Last installment shall be collected 6
months before expiry of the policy.
No. of Installments(n)={(T-6)/3} +1
1st Installment I1 = P*0.05+{P*0.95/n)
I2,I3……In = P*0.95/n
DESIGN DEFECT
 CAR
EXCLUSIONS TO SECTION - I

d) loss or damage due to faulty design;

e) the cost of replacement, repair or rectification of

defective material and/or workmanship, but this exclusion
shall be limited to the items immediately affected and shall
not be deemed to exclude loss of or damage to correctly
executed items resulting from an accident due to such
defective material and/ or workmanship;
 EAR
EXCLUSIONS TO SECTION - I

d.loss or damage due to faulty design, defective material

or casting, bad workmanship other than faults in
erection.
This exclusion shall be limited to the items immediately
affected and shall not be deemed to exclude loss or
damage to other insured items resulting from such
excluded perils;
 DESIGN
Defective Material

Defective workmanship

DEFECT Defective design

Defective workmanship at manufactures premises and not on

site. Defective workmanship at site is always covered under
EAR/CAR policy
 DESIGN DEFECT COVERAGE IN EAR
DE1 Outright rejection-Nothing is payable
DE2 Only ‘4’surrounding property is payable

Only ‘4’surrounding property and

DE3
‘3’connected machine are payable

Only ‘4’surrounding property , ‘3’connected

DE4 machine and ‘2’machine in which the
defective part is attached are payable

Only ‘4’surrounding property , ‘3’connected

machine , ‘2’machine in which the
defective part is attached and ‘1’ cost of
DE5
defective part are payable. But the
rectification charge(redesign charges) of
defective part is not payable

EAR policy coverage includes DE3, whereas DE4 and DE5 are additional covers.
 DESIGN DEFECT COVERAGE IN
CAR
Outright rejection-Nothing is
DE1
payable
DE2 Only ‘Floor is payable

DE3 Only Floor and Roof are payable

Only Floor , Roof and supporting

DE4
column are payable

Only Floor , Roof , supporting

column and cost of defective part
i.e.steel rod are payable. But the
DE5
rectification charge(redesign
charges) of defective part is not
payable

The basic CAR policy provides the equivalent of DE 1 with respect to faulty design. It excludes all design-
related loss or damage. For defective materials or workmanship, however, this policy provides much broader
cover - that is, the equivalent of DE 4 (full cover except for the "faulty part").
 COMPARISON – DE (LONDON MARKET WORDING) &
LEG (LONDON ENGINEERING GROUP WORDING)
DE1/95 Excludes all loss or damage due to defective elements LEG1/96 Excludes all loss or damage due
to defective elements
DE2/95 Excludes property that is defective and property that relies on the No equivalent LEG clauuses
defective property for its support and costs to access the defective
property (“access costs”). Covers other insured property that is free of
defect but is damaged by the defective property.

DE3/95 Excludes property that is defective and access costs. Covers other LEG2/96 Excludes any component part
insured property that is free of defect and is damaged by the defective or individual item that is defective and
property. also access costs. Covers damage to
property containing the defects and other
DE4/95 Excludes any component, part or individual item that is defective parts of the insured property that are
and also access costs. But gives cover for other parts or items of the free of defect, provided there is damage
insured property that are free of defect and damaged by the defective to the defective portion. To quantify
part cover, exclude the costs of correcting the
defect, which would have been incurred,
had this correction been carried out
immediately before damage occurred

DE5/95 Provides full cover for both defective and non-defective property LEG3/06 Provides full cover for both the
provided there is damage to the non-defective insured property as a result defective and non-defective property
of the defect. No cover is provided for the costs of improvements to the provided there is damage to any portion
original design, plan, specification, workmanship or materials of the property containing the defect as a
result of the defect. No cover is provided
for the costs of improvements to the
original design, plan, specification,
workmanship or materials.
 DE 1 DE2 DE3 DE4 DE5 LEG3 LEG2 LEG1
Costs to rectify defects in the
absence of damage
Costs to improve (original)
Design, Plan, Specification,
Workmanship or Material
Loss, damage or costs incurred
in accessing defective
Property/Part

Costs to rectify defective Part

Costs to fix defective Property

Costs to rectify damage to

(other) property supported by
the defective property
Costs to fix damage to (other)
property caused by the
defective element
 DESIGN DEFECT
TYPE OF COVERAGE ADD ON AVAILABLE
DESIGN AVAILABLE
DEFECT EAR CAR EAR CAR

FAULTY DE 3 DE 1 DE 4, DE 5 DE 2, DE 3
DESIGN DE 4

DEFECTIVE DE 3 DE 4 DE 4,DE 5 DE5

MATERIAL

DEFECTIVE DE 3 DE 4 DE 4,DE 5 DE5

WORKMAN
SHIP
BASIS OF LOSS SETTLEMENT
In the event of any loss or damage the basis of any settlement under
this Policy shall be -
a) in the case of damage which can be repaired, the cost of repairs
necessary to restore the items to their condition immediately before
the occurrence of the damage less salvage,
OR

b) in the case of a total loss the actual value of the items immediately
before the occurrence of the loss less salvage;

However, only to the extent the costs claimed has to be borne by the
Insured and to the extent they are included in the Sum Insured and
provided always that the provisions and conditions have been
complied with.
MARINE -CUM ERECTION (MCE)
CONCERNED WITH ERECTION OF PLANT AND
MACHINERY.

POLICY PERIOD:
FROM: EQUP. LEAVE THE MFG. WAREHOUSE
TO FINAL COMMISSIONING

SCOPE OF COVER:
AS PER EAR INSURANCE & MARINE(A/R).
ADVANCED LOSS OF PROFIT(ALOP)
SCOPE OF COVER
• POLICY COVERS FINANCIAL CONSEQUENCES OF A
PROJECT BEING DELAYED DUE TO ACCIDENTAL
DAMAGE TO THE PROJECT MATERIAL DURING
ERECTION/TESTING STAGES.
• IT FOLLOWS IN PRINCIPLE THE CHARACTERISTICS
OF AN ANNUAL CONSEQUENTIAL LOSS POLICY, BUT
IS ISSUED IN ADVANCE OF THE ACTUAL
COMMENCEMENT OF THE BUSINESS SINCE IT IS A
COMPULSION FROM THE FINANCERS OF THE
PROJECT
ADVANCED LOSS OF PROFIT(ALOP)
OBJECT OF ALOP-
• INDEMNIFY THE PRINCIPAL OR THE PROJECT
OWNER FOR THE ACTUAL FINANCIAL LOSS
SUSTAINED DUE TO DELAY IN COMMENCEMENT OF
COMMERCIAL OPERATIONS OF A NEW PROJECT
WHICH IS UNDER INSTALLATION/ CONSTRUCTION
• DELAY MUST BE CAUSED BY DIRECT PHYSICAL
LOSS OR DAMAGE ADMISSIBLE UNDER MATERIAL
DAMAGE CAR/EAR POLICIES COVERING THE
CONTRACT WORKS
• SUM INSURED IS COMPUTED ON THE BASIS OF THE
FINANCIAL MODEL OF THE PROJECT
OPERATIONAL PHASE
MACHINERY BREAKDOWN
INSURANCE

• ELECTRICAL MACHINERY
• MECHANICAL MACHINERY
• BOILERS
• LIFTS
• SWITCH GEARS
• CABLES
• FURNACES
MACHINERY BREAKDOWN INSURANCE

SCOPE OF COVER:

UNFORESEEN ACCIDENTAL
BREAKDOWNS/PHYSICAL DAMAGE SUCH AS
• ELECTRICAL SHORT CIRCUIT
• ENTRY OF FOREIGN MATERIAL
• NEGLIGENCE
• LUBRICATION FAILURE
• INSULATION FAILURE
• METALLURGICAL FAILURE
MACHINERY BREAKDOWN INSURANCE
The insured items are covered after successful
completion of their performance/acceptance tests
1. WHILE IT IS AT WORK OR AT REST OR
2. WHILE BEING DISMANTLED FOR
CLEANING OR OVERHAULING OR
3. DURING CLEANING OR OVERHAULING
4. DURING SUBSEQUENT ERECTION/
REASSEMBLY OR
5. WHILE BEING SHIFTED WITHIN THE
INSURED PREMISES
MACHINERY BREAKDOWN INSURANCE
EXCLUSIONS
• Fire and allied perils including explosion of any kind
(other than bursting or disruption of turbines,
compressors, cylinders of steam engines, hydraulic
cylinders or fly wheels or other apparatus subject to
centrifugal force, internal pressure)
• War group perils
• Atomic energy, radiation, nuclear
• Overloading experiments
• Gradually developing defects(gradually developing
flaws, defects, cracks or partial fractures in any part
not necessitating immediate stoppage, although at
some future time repair or renewal of the parts affected
may be necessary. )
MACHINERY BREAKDOWN INSURANCE
EXCLUSIONS
• Normal wear & tear
• Wilful act, wilful neglect
• Liability assumed by the insured by agreement
• Defects existing at the time of insurance and known
to the insured (design defects are covered)
• Consequential loss
• All types of boiler explosions including pressure
explosion, chemical, smelt water and flue gas
explosions.
MACHINERY BREAKDOWN INSURANCE
EXCLUSIONS
• Loss of or damage to belts, ropes, chains, rubber tyres,
dies, moulds, blades, cutters, knives or exchangeable tools,
engraved or impression cylinders or rolls; objects made of
glass, porcelain, ceramics, all operating media (e.g.
lubricating oil, fuel, catalyst, refrigerant, dowtherm) felts,
endless conveyor belts or wires; sieves, fabrics, heat
resisting and anti-corrosive lining and parts of similar
nature, packing material, parts not made of metal (except
insulating material) and non-metallic lining or coating of
metal parts.
• Loss or damage for which the manufacturer or supplier or
repairer of the property is responsible either by law or
contract.
• Excess
MACHINERY BREAKDOWN INSURANCE

SUM INSURED :
CURRENT NEW REPLACEMENT VALUE OF THE
EQUIPMENT.

PREMIUM RATING :
AS PER TARIFF SEPARATELY FOR
• ELECTRICAL MACHINERY
• MECHANICAL EQUIPMENTS
• MACHINERY IN COLD STORAGES
• EQUIPMENTS IN FERTILISERS/
PETROCHEMICALPLANTS.
Cover for part of machinery and Gear Boxes

Gear Boxes should not be insured in isolation but

should be insured either with the „drives‟ or the driven
equipment.
Parts of machines should not be insured separately;
their values should be included in the total value of the
machine to which they are related.
In respect of Turbo generator the following break-up
only would be acceptable -
Turbine,
Alternator
Gear Box,
Control Panel
Cables
DISCOUNTS
Stand by Disc-50% (Except for DG sets)
Standstill Disc-Based on Standstill period
upto 50%
Discount for spares(like rotors of
generators, compressors, turbines or
windings of transformers etc)-50%
Stand still disc for lock out period- NIL
MACHINERY BREAKDOWN INSURANCE

BASIS OF INDEMNITY :
• PARTIAL LOSS: EXPENSES INCURRED TO RESTORE
THE DAMAGED M/C TO ITS FORMER STATE. NO
DEPRECIATION FOR REPAIRS.EXCEPT FOR
LIMITED LIFE PARTS.

• TOTAL LOSS: ACTUAL VALUE OF THE ITEM

IMMEDIATELY BEFORE THE LOSS.
 DECLINED LIST OF MACHINES
 Stone Crushers
 Rolling Mill-Stands, Pedestal bearing etc. Raymond Mill
 PVC lined, Rubber lined and such other lined vessels Radios, Tape
Recorders, TV Sets and Electric and Electrical measuring
instruments
 Any Imported Machinery which cannot be repaired in the country
 Cupolas and Oil fired furnaces
 Pumps-with glass, graphite, rubber impellers
 Pipe lines
 Computers and other Electronic Equipments (To underwrite under
Electronic Equipment Insurance Policy)
 Portable and Mobile Equipments
 Urea Scrubber, LP Scrubber, Ammonia Scrubber, in Fertilizer-
appearing in group IV
 Ammonia Storage Tanks
ELECTRONIC EQUIPMENT INSURANCE
• COMPUTERS

• MEDICAL EQUIPMENTS

• TELECOMMUNICATION EQUIPMENT

• SATELITE COMMUNICATION EQUP.

• RESEARCH & MAT.TESTING EQUIP.

• AUDIO-VISUAL EQUIPMENT.
ELECTRONIC EQUIPMENT
INSURANCE
THREE SECTIONS:

1.MATERIAL DAMAGE

2. EXTERNAL DATA MEDIA (OPTIONAL COVER-

COVERS REPLACEMENT COST OF DATA MEDIA AND
REPLACEMENT OF DATA(INFORMATION) FROM A
BACK UP MEDIA)

3. INCREASED COST OF WORKING ( OPTIONAL

COVER-COVERS THE COST/RENT OF SUBSTITUTE
EQUIPMENT+PERSONNEL EXPENSES+COST FOR
TRANSPORTATION OF MATERIALS)
ELECTRONIC EQUIPMENT INSURANCE

COVERAGE UNDER SECTION I :

• FIRE,LIGHTNING
• EARTHQUAKE
• SHORT CIRCUIT
• OVERVOLTAGE
• FLOOD, INUNDATION
• BREAKDOWN
• BURGLARY
• THEFT
• IMPACT
ELECTRONIC EQUIPMENT
INSURANCE
EXCLUSION UNDER SECTION I :

• NORMAL WEAR & TEAR, CORROSION

• FAULTS OF DEFECTS EXISTING AT THE TIME OF

COMMENCEMENT OF INSURANCE.

• FAILURE OF ANY GAS, WATER ETC.

• AESTHETIC DEFECTS SUCH AS SCRATCHES ON PAINTED,

POLISHED SURFACES.

• LOSS TO BULBS, VALVES BELTS ETC.

• CONSEQUENTIAL LOSS
ELECTRONIC EQUIPMENT
INSURANCE
SUM INSURED :

CURRENT NEW REPLACEMENT VALUE OF THE

EQUIPMENT.

PREMIUM RATING :
AS PER TARIFF

MAINTENANCE WARRANTY:
SAFETY CHECKS
PREVENTIVE MAINTENANCE
ELECTRONIC EQUIPMENT INSURANCE
BASIS OF INDEMNITY :
• PARTIAL LOSS: EXPENSES INCURRED TO RESTORE
THE DAMAGED M/C TO ITS FORMER STATE.NO
DEPRECIATION FOR REPAIRS.EXCEPT FOR
LIMITED LIFE PARTS.

• TOTAL LOSS: ACTUAL VALUE OF THE ITEM

IMMEDIATELY BEFORE THE LOSS.
BOILER & PRESSURE PLANT INSURANCE

INSURED PROPERTY :
BOILERS /ECONOMISERS/SUPER HEATERS/ STEAM
PIPES/ PRESSURE VESSELS /OTHER VESSELS UNDER
STEAM GAS OR AIR PRESSURE

SCOPE OF COVER:
• EXPLOSION OR COLLAPSE OF INSURED BOILER
• SURROUNDING PROPERTY OF INSURED(OPTIONAL)
• TPL( OPTIONAL)
 DEFINITIONS

1. ‘Boiler’ shall mean any fired closed vessel or a combined container piping system
in which steam is generated under pressure.
2. ‘Pressure Plant’ shall mean any unfired closed container under steam gas or fluid
pressure.
3. ‘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.
4. ‘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.
5. ‘Flue Gas Explosion’ shall mean an explosion of ignited gases in the furnaces or
flues of the boilers, economisers and super heaters.

6. ‘Chemical Explosion’ shall mean an explosion arising out of chemical reaction in

any plant.
BOILER & PRESSURE PLANT INSURANCE

EXCLUSION:

• Fire and allied perils, Earthquake, AOG perils

• Impact with vehicles
• Failure of individual tubes (unless such defects result in
explosion or collapse).
• Chemical explosion (In recovery boilers , explosion due to smelt
water reaction is covered)
• Overloading experiments
• Wear & tear
• War & war like operation
• Gradually developing defects(gradually developing flaws,
defects, cracks or partial fractures in any part not necessitating
immediate stoppage, although at some future time repair or
renewal of the parts affected may be necessary. )
• Liability assumed by the insured by agreement
• Excess
BOILER & PRESSURE PLANT
INSURANCE
SUM INSURED :
CURRENT NEW REPLACEMENT VALUE OF PLANT

POLICY PERIOD :
ANNUAL OR SHORT PERIOD

PREMIUM RATE :
AS PER TARIFF DEPENDING ON CATEGORY OF PLANT.

ESCALATION BENEFIT IS NOT APPLICABLE

STANDSTILL DISCOUNT IS AVAILABLE UPTO50%
BASED ON THE STANDSTILL PERIOD
BOILER & PRESSURE PLANT
INSURANCE
WARRANTIES:
• ANNUALLY INSPECTED BY INSPECTORS

• OPERATED BY ATTENDANTS HOLDING A VALID

CERTIFICATE OF COMPETANCY
BOILER & PRESSURE PLANT
INSURANCE
BASIS OF INDEMNITY :
• PARTIAL LOSS: EXPENSES INCURRED TO RESTORE
THE DAMAGED M/C TO ITS FORMER STATE. NO
DEPRECIATION FOR REPAIRS.EXCEPT FOR LIMITED
LIFE PARTS.

• TOTAL LOSS: ACTUAL VALUE OF THE ITEM

IMMEDIATELY BEFORE THE LOSS.

EXCESS : RS.10000/.
CONTRACTORS PLANT & MACHINERY
VARIOUS MOBILE EQUIPMENTS FOR PROJECTS IN
PARTICULAR LOCATION MAY BE COVERED.
CPM IN DIFFERENT LOCATIONS MAY BE COVERED ON
FLOATER BASIS
In respect of Machinery/ equipments, whether registered with
RTO or not, but engaged at the Project site, the Insured, has
an option either to select the Motor/Non-Motor Policy under
Motor Tariff or CPM Policy in the Engineering Department

SUCH EQUIPMENTS ARE:

• PILE DRIVING EQUIPMENTS
• EXCAVATORS
• ROAD ROLLERS
• CRANES
• MIXING PLANT
• COMPRESSORS
• CONTRACTOR'S PLANT & MACHINERY EQUIPMENTS MOUNTED
ON FLOATING VESSEL/CRAFT
CONTRACTORS PLANT & MACHINERY
SCOPE OF COVER :
UNFORSEEN AND SUDDEN PHYSICAL
LOSS/DAMAGE :
• BURGLARY, THEFT
• RSMD
• FIRE & ALLIED PERILS
• EXTERNAL EXPLOSION
• STFI, EQ
• ACCIDENTAL DAMAGE
• COLLISION
• IMPACT
 CONTRACTORS PLANT & MACHINERY

EXCLUSION
• Electrical & mechanical breakdown
• Consumables replaceable parts and attachment such as bits, drills, knives
or other cutting edges, saw blades dies, moulds, patterns, pulverizing and
crushing surfaces, screens and sieves, ropes, belts, chains, elevator and
conveyor bands, batteries, tyres, connecting wires and cables, flexible
pipes, joining and packing material regularly replaced.
• Explosion (Internal)
• Vehicles unless they are exclusively used on construction site.
• Underground CPM M/Cs -excl-k
• Wear & tear , corrosion
• Transit loss
• War perils
• Loss or damage due to abandonment of any plant and/or machinery
working in underground mines or tunnels
• pay loaders on barges
• loss or damage due to total or partial immersion in tidal waters
CONTRACTORS PLANT & MACHINERY
SUM INSURED :
CURRENT NEW REPLACEMENT VALUE OF
EQUIPMENT

POLICY PERIOD :
ANNUAL OR SHORT PERIOD

PREMIUM RATE :
AS PER TARIFF DEPENDING ON CATEGORY OF M/C.
CONTRACTORS PLANT & MACHINERY
ADDITIONAL COVERS:
• TPL
• SURROUNDING PROPERTY
• CLEARANCE AND REMOVAL OF DEBRIS
• EXPRESS FREIGHT
• AIR FREIGHT
• ADDITIONAL CUSTOMS DUTY
• UNDERGROUND MACHINES(exclusion-K)
• DISMANTLING OF CPM EQUIPMENT AND SHIFTING
TO A NEW LOCATION
CONTRACTORS PLANT & MACHINERY
BASIS OF INDEMNITY :
• PARTIAL LOSS: EXPENSES INCURRED TO RESTORE
THE DAMAGED M/C TO ITS FORMER STATE. NO
DEPRECIATION FOR REPAIRS.EXCEPT FOR
LIMITED LIFE PARTS.

• TOTAL LOSS: ACTUAL VALUE OF THE ITEM

IMMEDIATELY BEFORE THE LOSS.
DETERIORATION OF STOCKS
INSURANCE

THIS POLICY IS ISSUED TO COLD STORAGES.

THERE SHOULD BE M.B. INSURANCE FOR THE

MACHINERIES OF CONCERNED COLD STORAGE
UNITS.
DETERIORATION OF STOCKS
INSURANCE

TWO TYPES OF POLICIES-

 1. POTATOES IN COLD STORAGE
 2. OTHER THAN POTATOES IN COLD
STORAGE
 Eg. Sea foods like fish /prawns/frog legs , dairy
products like cheese/butter, fruits,vegetables and
food items
DETERIORATION OF STOCKS INSURANCE

SCOPE OF COVER :
• DAMAGE TO STOCK DUE TO A RISE IN TEMPERATURE
RESULTING FROM BREAKDOWN OF REFRIGERATION
PLANT (MB).
• ESCAPE OF REFRIGERANT IN THE REFRIGERATED
CHAMBER AS A DIRECT RESULT OF DAMAGE TO
MACHINERY AND PLANT .

• COVER FOR DETERIORATION OF STOCK DUE TO

BREAKDOWN IN THE STANDBY D.G. SETS, CAN BE
GRANTED TO THOSE COLD STORAGES WHICH HAVE
OPTED FOR THE FOES EXTENSIONS.
• THE DOS COVER WITH FOES EXTENSION CANNOT BE
GIVEN TO A COLD STORAGE WHICH DOES NOT HAVE
STAND BY D.G SETS OR OIL ENGINE COUPLED TO
COMPRESSORS.
• MB AND DOS POLICIES MUST BE WITH ONE OFFICE ONLY.
 DETERIORATION OF STOCKS INSURANCE
Minimum policy period-7months
Declaration policies may be issued provided
 Policy period is 12m
 Value of stock>50L
 The insured shall submit fortnightly periodical
declarations.
 Declaration refund- Max 50%
 Excess- cold storages opted for FOES extension-
20% of the claim amount subject to a minimum
of Rs.20,000/-. (coverage is applicable after a time
excess of 8hrs)
 cold storages without FOES extension- 10% of the
claim amount subject to a minimum of
Rs.20,000/-.
DETERIORATION OF STOCKS INSURANCE

EXCLUSION:

• FIRE & ALLIED PERILS.

• AOG PERILS.
• COLLAPSE OF BUILDING.
• WAR AND WARLIKE OPERATION, RSMD.
• CONSEQUENTIAL LOSS
• RACK STRUCTURE COLLAPSE IS NOT A MACHINERY
BREAKDOWN RISK AND HENCE AN EXCLUSION UNDER
DOS POLICY.
• Any damage to the stocks due to rise or fall in temperature
caused by stoppage of any section or sections of the
Refrigeration Plant for less than 24 hours following an
accident to the Refrigeration Plant & Machinery
• Any damage if the temperature in the Refrigeration Chambers
does not exceed 40 F (4.4 C).
DETERIORATION OF STOCKS INSURANCE

SUM INSURED:

MAXIMUM VALUE OF STOCKS IN THE COLD STORAGE

(Max.storage capacity* The average price of the potatoes at the time
of loading as determined by the Insured with the concurrence of
the Company at the time the Insurance has come into effect. The price
shall include storage charges for the whole season )

WARRANTY:
• MAINTENANCE CONTRACT IN FORCE THROUGHOUT THE
CURRENCY OF THE POLICY.
• LOG BOOKS ARE MAINTAINED SHOWING THE TEMP.
READING AT REGULAR INTERVALS.
DETERIORATION OF STOCKS
INSURANCE

BASIS OF INDEMNITY:

MARKET VALUE OF THE COMMODITY

IMMEDIATELY BEFORE THE ACCIDENT.
MACHINERY LOSS OF PROFIT POLICY(MLOP )
AND BOILER/PRESSURE PLANT LOSS OF
PROFIT (BPPLOP)
• POLICY COVERS BUSINESS INTERRUPTION LOSSES
CONSEQUENT UPON MATERIAL DAMAGE AS DEFINED
IN THE RESPECTIVE POLICIES
• POLICY PROVIDES INDEMNITY AGAINST-
1.LOSS OF NET PROFIT
2.LOSS OF INSURED STANDING CHARGES
3.INCREASED COST OF WORKING
…ON THE LINES OF FIRE LOP.HOWEVER,UNLIKE FIRE
LOP,THE INSURED CAN SELECT THE KEY ITEMS OF
PLANT/ MACHINERY FOR M.D.+LOP