1. ENGINEERING INSURANCE

2. BACKGROUND TWO BROAD GROUPS-
ENGINEERING INSURANCE ORIGINATED IN U.K.IN THE MIDDLE OF THE 19th CENTURY WITH INSURANCE AGAINST BOILER EXPLOSION RISKS
OTHER INSURANCES LIKE MACHINERY BREAKDOWN /DOS/ PROJECT INSURANCES BECAME POPULAR WITH THE GROWTH OF INDUSTRIALISATION
TWO BROAD GROUPS-
CONSTRUCTION PHASE COVERS
OPERATIONAL PHASE COVERS

3. CONSTRUCTION PHASE COVERS

4. PROJECT COVERS CONSTRUCTION PHASE I. MATERIAL DAMAGE (MD)
A) CONTRACTORS ALL RISK (CAR)
B)ERECTION ALL RISKS (EAR)
STORAGE CUM ERECTION (SCE)
C)MARINE CUM ERECTION (MCE)
II. BUSINESS INTERRUPTION
A) ADVANCE LOSS OF PROFIT(ALOP)
FOLLOWING LOSS OR DAMAGE PROPERTY UNDER EAR/CAR

5. CONSTRUCTION OF COOLING TOWERS

6. CONSTRUCTION OF BRIDGES

7. CONSTRUCTION OF ROADS AND FLYOVERS

8. HOUSING AND CHIMNEY PROJECTS

9. Scope of Project Insurance
Marine
Construction All Risk
Erection All Risk
Professional Indemnity
ALOP/DSU

10. MARINE
Covers Cargo transported by any mode of Conveyance to SITE & FABRICATOR’S PREMISES

11. MARINE-CUM-ERECTION POLICY
MCE POLICY PROVIDES MARINE ALL RISK COVER IN CONJUNCTION WITH EAR/CAR POLICY
POLICY PERIOD- COMMENCES WITH THE DISPATCH OF THE FIRST CONSIGNMENT TO THE PROJECT SITE. A SEPARATE MARINE TRANSIT POLICY FOR IMPORTED AND INDIGENEOUS EQUIPMENTS /PROJECT MATERIAL ON ALL RISK PLUS WAR/SRCC TERMS IS ISSUED IN CONJUNCTION WITH THE EAR/SCE POLICY.
FABRICATOR’S WORKS EXTENTION- COVERS PROJECT MATERIAL AGAINST TO-AND –FRO TRANSIT RISKS AND STORAGE RISKS AT FABRICATOR’S PREMISES

12. MARINE POLICY Can be issued on stand alone basis
in conjunction with CAR
Marine Construction All Risk
in conjunction with EAR
Marine Erection All Risk

13. COVERAGE UNDER MARINE POLICY
All Risk of Physical loss or damage as per ICC-A Clause/ I/T-A Clause
Insured value up to CIF plus 10%
Import duty (if included in insured value)
To & fro transits from/to fabricators premises
Strike, riots, civil commotion extension as per Institute Strikes Clauses-Cargo
War risks extension as per Institute War Clauses-Cargo (sea/air only) 23

14. CONTRACTOR’S ALL RISK POLICY
(CAR)
PURPOSE
TO PROTECT THE INTEREST OF
CONTRACTORS
PRINCIPALS
FINANCIERS
2. POLICY IDEALLY SUITED FOR CIVIL ENGINEERING PROJECTS LIKE MULTISTORIED BUILDINGS/ BRIDGES /FLYOVERS /DAMS/ ROADS/ CANALS/ SILOS/TUNNELS etc.—VALUE OF CIVIL WORKS SHOULD BE MORE THAN 50%

15. Scope of Cover under Contractors All Risk
Policy provides Comprehensive All Risk cover, subject to exclusions . Policy covers ,besides other perils, the following major construction risks-
Fire, Explosion & lightning
Accidental damages during construction
Dropping/Falling
Bad workmanship
Defective material
Human Error, Lack of skill
Negligence of Workers/Labourers
AOG perils
Collapse, collision and impact
Theft, burglary, malicious damage
Two sections : Material Damage & Third Party Liability

16. free material issued by the Principal
Sum Insured under CAR
Sum Insured to represent ESTIMATED COMPLETELY ERECTED VALUE OF THE CONTRACT WORKS INCLUSIVE OF– cost of material +
wages
freight
custom duty & taxes
construction cost
free material issued by the Principal
SUM INSURED IS ADJUSTABLE ON COMPLETION OF CONSTRUCTION ON THE BASIS OF ACTUAL VALUES IN RESPECT OF CONSTRUCTION COST,FREIGHT AND CUSTOM DUTIES (INCREASE/DECREASE IN PRIME COST OF MATERIAL NOT TO BE TAKEN INTO ACCOUNT)
SUM INSURED TO BE REINSTATED UP ON PAYMENT OF A LOSS

17. CAR POLICY- PERILS COVERED
SECTION –I (MATERIAL DAMAGE) ALL RISK COVER (ALL RISKS OTHER THAN EXCLUSIONS) THIS MEANS THAT ALMOST ANY SUDDEN AND UNFORESEEN LOSS OR DAMAGE WILL BE COVERED INCLUDING-
ACCIDENTAL LOSSES LIKE COLLAPSE, IMPACT FIRE ,LIGHTNING, EXPLOSION
AOG PERILS LIKE STFI GROUP, EARTHQUAKE, LANDSLIDE/ROCKSLIDE
HUMAN PERILS LIKE THEFT / BURGLARY, BAD WORKMANSHIP,LACK OF SKILL, NEGLIGENCE, MALICIOUS ACTS , HUMAN ERROR,TERRORISM ETC.

18. CAR POLICY--EXCLUSIONS UNDER SECTION-1
Deductibles
Inventory losses
Normal wear & tear, gradual deterioration
Rusting/Breakage of Glass/ scratching of painted/polished surface
Correction of any error unless resulting in physical damage/loss
Files/drawings/currency &cheques/accounts bills, stamps
Packing material
Vehicles licensed for road use
Loss/damage due to faulty design
Cost of repairs/rectification/replacement of defective material and /or bad workmanship
( exclusion applies only to the particular item affected and not to the consequential accidents due to such defective material /bad workmanship)

19. CAR POLICY- GENERAL EXCLUSIONS
 War and War-like perils, Terrorism
Nuclear reaction, Nuclear radiation or Radioactive contamination;
 Willful act or willful negligence of the Insured or of his responsible representative;
Cessation of work whether total or partial.
Contractual penalties, performance guarantees
Consequential losses

20. CAR POLICY-OTHER IMPORTANT PROVISIONS
POLICY PERIOD -COMMENCEMENT OF WORK OR AFTER THE UNLOADING OF THE FIRST CONSIGNMENT AT THE SITE--WHICHEVER IS EARLIER. THE COVER EXPIRES ON COMPLETION OF THE PROJECT/COMPLETED PART BEING TAKEN OVER OR PUT INTO OPERATION BY PRINCIPAL/THE DATE SPECIFIED IN THE POLICY --- WHICHEVER IS EARLIER.
COVER FOR CONSTRUCTION PLANT MACHINERY- CONSTRUCTION PLANT& MACHINERY CAN BE COVERED WHERE S/I FOR CPM DOES NOT EXCEED 5% OF CAR S/I
SURROUNDING PROPERTY-SEPARATE S/I TO BE SPECIFIED

21. CAR POLICY-OTHER IMPORTANT PROVISIONS….contd.
EXTENSIONS (ON FIRST LOSS INDEMNITY BASIS)
EXPRESS FREIGHT, OVERTIME
PRINCIPAL’S SURROUNDING PROPERTY
DEBRIS REMOVAL (OF INSURED PROPERTY)
ANY OTHER EXTENSION (E.G. ESCALATION, AIR FREIGHT, ADDL. CUSTOM DUTY, MAINTENANCE VISITS OR EXTENDED MAINTENANCE COVER
MAINTENANCE VISITS COVER—TWO TYPES
LIMITED MAINTENANCE- LOSS/DAMAGE TO COTRACT WORKS CAUSED BY CONTRACTOR DUE TO OPERATIONS CARRIED OUT FOR COMPLYING WITH MAINTENANCE PROVISIONS OF THE CONTRACT
EXTENDED MAINTENANCE- AS ABOVE PLUS LOSS/DAMAGE DURING MAINTENANCE PERIOD CAUSED BY FAULT/PERIL INSURED DURING THE CONSTRUCTION PERIOD

22. ERECTION ALL RISK POLICY
WHEREAS CAR POLICY IS CONCERNED WITH CIVIL ENGINEERING WORKS,EAR OR SCE (STORAGE –CUM- ERECTION) IS CONCERNED WITH INDUSTRIES AND DEALS WITH ERECTION OF PLANT AND MACHINERY/ EQUIPMENT AND STRUCTURES WHERE THE COST OF CIVIL WORKS DOES NOT EXCEED 50%OF THE PROJECT COST.
POLICY MAY BE ISSUED IN THE JOINT NAMES OF PRINCIPALS/CONTRACTORS /FINANCIERS IN RESPECT OF THE ENTIRE PROJECT OR PART THEREOF AS PER CONTRACT SPECIFICATIONS.
COVERAGE— ALL RISK COVER ON THE LINES OF CAR POLICY
SUM INSURED=COMPLETELY ERECTED VALUE OF PROJECT INCLUDING FREIGHT, COST OF ERECTION etc.

23. Period of Insurance under EAR Policy
Period of Insurance under Erection All Risk----
Starts from the date of arrival of first consignment at site
&
Continues during the storage/erection/ test operation or test loading /trial running i.e. till the first test operation/test loading is concluded subject to a limit of four weeks from the day on which a trial running is made and/or readiness for work is declared by the erectors/contractors ( thus one month testing is inbuilt under the policy)
Expires after completion of the project/handing over to the principals or the date specified in the policy whichever is earlier
whichever is earlier
If a part of a plant/one or several machine/s are tested and put into operation the cover for that particular part/plant/machine ceases whereas it continues for the remaining parts which are not handed ready
The liability of the Company shall commence, (notwithstanding any date to the contrary specified in the Schedule) only from the time after the unloading of the property specified in the Schedule from any conveyance at the site specified in the schedule and shall continue until immediately after the first test operation or test loading is concluded (whichever is earlier) but in no case beyond four weeks from the day on which after completion of erection a trial running is made and/or readiness for work is declared by the erectors/contractors, whichever is earlier. If however, a part of a plant or one or several machine/s is/are tested and put into operation the cover and consequently the liability of the Company for that particular part of the plant or machine ceases whereas it continues for the remaining parts which are not yet ready.
In case after the expiry of four weeks of trial running, approval of the plant or any part thereof is not given by the concerned Authorities the cover for the extended period of further trial running can be covered at extra premium to be arranged before hand.
If the actual erection period is shorter than the period indicated in the Schedule, no refund of premium shall be allowed, unless specifically allowed by Insurers.
In the case of second-hand/used property, the insurance hereunder shall however, cease immediately on the commencement of the testing.
At the latest, the insurance shall expire on the date specified in the Schedule but if the work of erection and test operations included in the insurance is not completed within the time specified hereunder, the company may extend the period of Insurance but the Insured shall pay to the Company additional premium at agreed rates.

24. SPECIAL ASPECTS OF ERECTION ALL RISK POLICY
Meant for projects where machinery dominates
Another nomenclature - Storage Cum Erection
Concept of all risk - what is excluded is not covered.
Two sections : Material Damage Third Party Liability
Maximum Risk is during Testing Period since the various items are subjected to operating conditions and load for the first time. The introduction of feed-stock/operating media increases the fire/explosion hazard
Cold Testing—is the checking of parts/elements by mechanical/electrical/hydrostatic forms of testing under NO LOAD conditions
Hot Testing--- involves the checking of parts/elements/production lines under full or partial load conditions and may also involve Separate and Integrated Testing of the various units commissioned

25. Coverage under EAR Policy---Section I
This Section covers ALL RISK of physical loss/damage(other than Exclusions) and includes the following contingencies-
Fire, lightning, theft and burglary
Storm, flood ,earthquake, tempest, subsidence, landslide, rockslide
Collision, failure of cranes, impact, collapse,accidents
Failure of safety devices
Leakage of Electricity, insulation failures, short circuit
Tearing apart due to centrifugal forces
Carelessness, negligence, faults in erection
Strikes, riots, malicious acts
Losses during testing and trial runs
MAJOR PERILS/ACTS OF GOD CLAIMS -
The Major Perils/Acts of God Claims shall mean the claims arising out of -
a)     Earthquake - Fire & Shock
b)     Landslide/Rockslide/Subsidence,
c)     Flood/Inundation,
d)     Storm/Tempest/Hurricane/Typhoon/Cyclone/lightning or other atmospheric disturbances.

26. Exclusions under EAR Policy-Section 1
Faulty design, Defective casting or material, Bad workmanship – (other than faults in erection)
Exclusion is limited to items immediately affected by these perils and does not exclude subsequent loss/damage to other items
Costs of Rectification of Error unless resulting in physical loss/damage
Excess/Deductible
Inventory losses
Normal wear & tear
Rust ,Gradual Deterioration
Consequential loss
Vehicle licensed for Road use/waterborne vessels/equipment mounted on floating vessels,barges,etc.
Loss or damage to--
files, drawings
accounts, bills, cheques, currency, stamps
packing materials

27. General Exclusions under EAR Policy
War & war group of perils
Terrorism
Nuclear perils
Wilful act or negligence
Cessation of work – partial or total
Consequential losses
Contractual penalties, performance guarantees

28. SPECIAL PROVISIONS OF EAR POLICY
POLICY provides for Premium Adjustment at the end of policy period on account of differences in values (other than prime cost of material ) and extensions like-
1. Principal’s surrounding property
2. Removal of Debris
3. Third Party Liability
4. Other Extensions like express freight, overtime
escalation, air freight, addl. custom duty,etc.
5. Maintenance Visits Cover
……ON THE LINES OF CAR POLICY

29. SALIENT FEATURES OF CONTRACT WORKS INSURANCE
Contract Works Insurance is a special cover which is a COMBINATION of CAR/EAR Policies in order to suit the needs of Projects involving substantial amount of both Civil construction and Machinery Installation
For Eg Hydro-Electric Project involves—
Heavy Civil Works like—construction of Dam/Coffer Dam/Tunnels/Powerhouse Building,etc.
Installation/Testing/Commissioning work in respect of Turbines/Electric Generator/Control Room/ Transformers/ Switchgear,etc.
The Contract Works Insurance Policy combines the benefits of CAR & EAR in such a way that the normal terms/conditions apply with necessary cushions to help eliminate any gaps and overlaps and provide a seamless cover

30. THIRD PARTY LIABILITY COVER IN PROJECT INSURANCE

31. Third Party Liability cover under EAR/CAR Policies
Project related TPL insurance covers all contractual parties within the scope of the policy viz.-Principle/ Financiers/Contractors & Sub-contractors working on the project site against---
legal liability arising out of TPPI + TPPD occurring during construction, erection, testing and maintenance period
2. cost of litigation recovered by a claimant
3. defence cost
--subject to the AOA/AOY limit
This is an Optional Cover under CAR/EAR Policies
For Projects having Value upto Rs. 100 crs. the Indemnity will be Rs. 1 cr. On AOA/AOY basis and for Projects having Value over Rs. 100 crs. the Indemnity will be Rs.10 crs. on AOA/AOY Basis. Limit can be increased to Rs. 25 crs. on payment of Additional Premium

32. Extensions Available Under
Projects Insurance
Earthquake (full or on first loss basis)
Owner’s surrounding property
50/50 clause
72 hours clause
Automatic reinstatement of sum insured
Loss minimisation expenses
Clearance and removal of debris
Professional fees
Cover for offsite storage/fabrication

33. Extensions Available Under Projects Insurance..contd.
Third party liability with cross liability/Third party liability with cross liability during maintenance cover
Waiver of contribution clause
Escalation clause
waiver of subrogation clause
expediting cost
extended maintenance period (defect liability cover)
cover for operational phase pending integrated testing
design defect
additional custom duty

34. OPERATIONAL PHASE COVERS

35. OPERATIONAL PHASE-OPERATIONAL COVERS
I. MATERIAL DAMAGER(M.D.)
A. I) MACHINERY INSURANCE
II) BOILER AND PRESSURE PLANT (BPP)
III) ELECTRONIC EQUIPMENT INSURANCE (EEI)
CONTRACTOR’S PLANT MACHIENRY (CPM)
CIVIL ENGINEERING COMPLETED RISKS(CECR)INSURANCE

36. OPERATIONAL PHASE COVERS
I. MATERIAL DAMAGER(M.D.)
A. I) MACHINERY INSURANCE
II) BOILER AND PRESSURE PLANT (BPP)
III) ELECTRONIC EQUIPMENT INSURANCE (EEI)
CONTRACTOR’S PLANT MACHIENRY (CPM)
CIVIL ENGINEERING COMPLETED RISKS(CECR)INSURANCE
D. DETERIORATION OF STOCK (DOS)
II. BUSINES INTERRUPTION=LOP
(MLOP)MACHINERY LOSS OF PROFIT FOLLOWING MATERIAL DAMAGE UNDER M.B.POLICY
BPPLOP FOLLOWING EXPLOSION/ IMPLOSION DAMAGE TO BOILER/PRESSURE VESSEL

37. MACHINERY INSURANCE POLICY
PROPERTY TO BE COVERED-
BOILERS/PRESSURE PLANTS WITH AUXILLARIES
ELECTRICAL EQIPMENTS LIKE ALTERNATORS/GENERATORS/MOTORS/ RECTIFIERS/SWITCHGEAR/TRANFORMERS
MECHANICAL PLANT/ MACHINERY INCLUDING ENGINES/ PUMPS/ PROCESS MACHINERY/BLOWERS/COMPRESSORS /REFRIGERATION PLANT/TURBINES /MACHINE TOOLS AND PRESSES
LIFTING EQUIPMENTS LIKE LIFTS , HOISTS, CRANES,CONVEYORS
SUM INSURED= CURRENT NEW REPLACEMENT VALUE (INCLUDING TRANSPORTATION TO SITE/ DUTY/ ERECTION OR INSTALLATION COST)

38. POWER PLANT MACHINERY

39. POWER TRANSMISSION MACHINERY

40. MACHINERY INSURANCE POLICY
POLICY COVERAGE –
UNFORSEEN AND SUDDEN PHYSICAL LOSS OR DAMAGE BY ANY CAUSE (OTHER THAN EXCLUSIONS) TO THE INSURED PROPERTY-
WHILE IT IS AT WORK OR AT REST OR
WHILE BEING DISMANTLED FOR CLEANING OR OVERHAULING OR
DURING CLEANING OR OVERHAULING
DURING SUBSEQUENT ERECTION/ REASSEMBLY OR
5. WHILE BEING SHIFTED WITHIN THE INSURED PREMISES

41. MACHINERY INSURANCE POLICY…contd
LOSS PRODUCING EVENTS COULD BE-
ELECTRICAL eg. Short circuit, arcing, failure of insulation, malfunctioning of control circuits etc.
MECHANICAL eg. faulty material/ casting, vibrations, maladjustments, loosening of parts, abnormal stress, centrifugal forces, defective lubrication, failure of protective devices etc.
EXTERNAL/ACCIDENTAL eg. entry of foreign body, impact,collision etc.
SUM INSURED= CURRENT NEW REPLACEMENT VALUE INCLUDING TRANSPORTATION TO SITE/DUTY/ERECTION OR INSTALLATION COST

42. MACHINERY INSURANCE POLICY…contd
IMPORTANT EXCLUSIONS-
FIRE AND SPECIAL PERILS
LOSS/DAMAGE DUO TO OVERLOAD TESTS OR EXPERIMENTS
WASTAGE OF MATERIAL /WEARING OUT OF ANY PART DUE TO GRADUAL DETERIORATION /USAGE OR WORKING
WAR AND WARLIKE PERILS/NUCLEAR PERILS/CONSEQUENTIAL LOSSES
MANUFACTURING DEFECTS
WILFUL ACT/GROSS NEGLIGENCE OF THE INSURED
DAMAGE TO EXCHANGEABLE PARTS TOOLS SUCH AS BLADES/CUTTERS /KNIVES etc.
POLICY EXCESS

43. CONTRACTORS PLANT & MACHINERY
PROPERTY COVERED- CONTRACTORES PLANT AND MACHINERY LIKE PILE DRIVING EQUIPMENT, EXCAVATORS,COMPRESSORS, CRANES, MIXING PLANTS,STONE CRUSHERS, BULLDOZERS,TUNNEL BORING MACHINES,etc.
CPM CAN BE INSURED UNDER CAR/EAR POLICY AS AN ADDITIONAL ITEM IF THE SUM INSURED OF CPM IS 5% OF TOTAL SUM INSURED OF CAR /EAR PROJECT SUBJECT TO MAXIMUM OF RS.25 LACS

44. CONTRACTOR’S PLANT & MACHINERY

45. CONTRACTOR’S PLANT & MACHINERY

46. CONTRACTORS PLANT & MACHINERY POLICY
PERILS COVERED
UNFORSEEN AND SUDDEN PHYSICAL LOSS /DAMAGE FROM ANY CAUSE INCLUDING -
a) BURGLARY ,THEFT,RIOT & STRIKE , MALICIOUS DAMAGE AND TERRORISM
b) FIRE & LIGHTNING, EXTERNAL EXPLOSION, EARTHQUAKE, FLOOD, INUNDATION, SUBSIDENCE, LANDSLIDE AND ROCKSLIDE.
c) STORM,TEMPEST, HURRICANE, TYPHOON AND TORNADO
d) ACCIDENTAL DAMAGE DUE TO MAN --HANDLING, DROPPING OR FALLING, COLLAPSE , COLLISION AND IMPACT

47. CONTRACTORS PLANT & MACHINERY (CPM) POLICY…contd..
SCOPE OF COVER: The CPM is covered--
a)while it is at work or at rest
b) while being dismantled for cleaning or overhauling or
c) reassembling thereafter
The policy covers the CPM only while the same is lying at Contractor’s own premises or at various sites/ locations in India
SUM INSURED= CURRENT NEW REPLACEMENT VALUE INCLUDING TRANSPORTATION COSTS/CUSTOM DUTY/ERECTION OR INSTALLATION COSTS
POLICY EXTENSIONS—
T.P.LIABILITY
SURROUNDING PROPERTY/DEBRIS REMOVAL
OVERTIME WAGES /EXPRESS FREIGHT
ELECTRICAL/MECHANICAL BREAKDOWN

48. CONTRACTORS PLANT & MACHINERY (CPM) POLICY .. contd.
PRINCIPAL EXCLUSIONS-
electrical/mechanical breakdown
war and warlike perils/nuclear risks
wilful act/wilful negligence of insured/representative
overload tests/experiments
exchangeable parts /tools
total/partial immersion in tidal waters or whilst working underground
Excess
Transit risks from one site to another
T. P. Liability
Special Contingency Policy covering CPM Policy Perils+ Marine All Risks & SRCC + T.P. Liability may be issued where Sum Insured is huge
POLICY EXTENTIONS—
T.P.LIABILITY
SURROUNDING PROPERTY/DEBRIS REMOVAL
OVERTIME WAGES /EXPRESS FREIGHT

49. BOILER & PRESSURE PLANT POLICY
BOILERS GENERATE STEAM WHICH IS USED IN VARIOUS PROCESSES IN INDUSTRIES.STEAM IS ALSO USED IN THERMAL POWER PLANTS TO DRIVE THE TURBINES
PROPERTY COVERED-
BOILERS /ECONOMISERS/SUPER HEATERS/ STEAM PIPES/ PRESSURE VESSELS /OTHER VESSELS UNDER STEAM GAS OR AIR PRESSURE
DEFINITIONS-
BOILER-ANY FIRED CLOSED VESSEL/COMBINED CONTAINER PIPING SYSTEM IN WHICH STEAM IS GENERATED UNDER PRESSURE
PRESSURE PLANT-ANY UNFIRED CLOSED CONTAINER UNDER STEAM/GAS/FLUID PRESSURE

50. BOILER & PRESSURE PLANT POLICY…contd.
PERILS COVERED- POLICY COVERS EXPLOSION OR COLLAPSE OF THE INSURED BOILER/PRESSUER VESSEL RESULTING IN:
DAMAGE TO BOILER/PRESSURE PLANT
DAMAGE TO SURROUNDING PROPERTY OF THE INSURED
LIABILITY TO THIRD PARTY
POLICY ALSO COVERS EXPLOSION CAUSED BY IGNITION OF FLUE GASES.MAJOR EXCLUSIONS-FIRE AND SPECIAL PERILS,WAR AND NUCEAR PERILS,EXTERNAL EXPLOSION, CHEMICAL EXPLOSION,FAILURE OF INDIVIDUAL TUBES UNLESS RESULTING IN EXPLOSION/COLLAPSE
SUM INSURED = CURRENT NEW REPLACEMENT VALUE INCLUSIVE OF FREIGHT/CUSTOMS DUTY/ERECTION COST

51. DETERIORATION OF STOCK POLICY (DOS)
THE POLICY IS KNOWN AS -
1. DETERIORATION OF STOCK INSURANCE OR
2. STOCK SPOILAGE INSURANCE
SCOPE-
THIS IS A FORM OF CONSEQUENTIAL LOSS FOR STOCKS CONTAINED IN LARGE COLD STORAGES
THE INSURANCE COVER IS AGAINST THE RISK OF DETERIORATION/PUTREFACTION / CONTAMINATION OF STOCKS AS A RESULT OF CHANGE IN TEMPETURE OF THE COLD STORAGE CHAMBERS DUE TO BREAKDOWN OF REFRIGERATION PLANT/MACHINERY AND
A CLAIM FOR WHICH IS ADMISSIBLE UNDER THE CONCURRENT MACHINERY INSURANCE POLICY ON THE REFIGERATION PLANT
(NOTE:THE MACHINERY INSURANCE OF R/P IS COMPULSORY)

52. DETERIORATION OF STOCK POLICY (DOS) …contd.
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
INSURANCE COVER APPLIES TO DETERIORATION OF CONTENTS CAUSED BY A RISE IN TEMPERATURE DUE TO –
MATERIAL DAMAGE TO REFRIGERATION PLANT OR
ACTION OF REFRIGERANT ESCAPING FROM THE PLANT
NOTE--POLICY MAY BE EXTENDED TO COVER FAILURE OF ELECTRIC SUPPLY FROM FEEDER STATION DUE TO OPERATION OF INSURED PERIL

53. ELECTRONIC EQUIPMENT POLICY
THE POLICY IS SPECIFICALLY DESIGNED FOR ELECTRONIC EQIUPMENTS LIKE-
COMPUTORS INCLUDING CPU/KEYBOARD/ MONITOR/ PRINTER/STABILIZER/ UPS/SERVER/ SYSTEMS SOFTWARE
ELECTRONIC DATA PROCESING (EDP) EQUIPMENT
ELCTRO-MEDICAL EQUIPMENT
EQUIPMENT FOR RESEARCH AND MATERIAL TESTING
TELECOMMUNICATION AND NAVIGATIONAL EQUIPMENT
COMPUTER SYSTEM FOR PRODUCTION PLANT AND MACHINERY
SIGNAL AND TRANSMITTING UNITS ETC.

54. ELECTRONIC EQUIPMENT POLICY-SCOPE OF COVER—SECTION I
THE POLICY WILL APPLY ONLY AFTER SUCCESSFUL COMPLETION OF THE PERFORMANCE/ ACCEPTANCE TEST OF THE INSURED ITEMS AND COVER WILL CONTINUE WHETHER THEY ARE WORKING,AT REST,DISMANTLED FOR CLEANING/ OVERHAULING/ SUBSEQURNT RE-ERECTION OR BEING SHIFTED WITHIN THE PREMISES
SCOPE OF COVER- POLICY COMPRISES THREE
SECTION I-- COVERS ANY SUDDEN AND UNFORESEEN PHYSICAL LOSS/DAMAGE DUE TO ANY CAUSE(OTHER THAN THOSE SPCIFICALLY EXCLUDED).THUS,THE COVER IS ALL RISK AND INCLUDES LOCATION/OPERATIONAL/ AOG/HUMAN ELEMENT RISKS.
SUM INSURED UNDER SECTION I=CNRV

55. ELECTRONIC EQUIPMENT POLICY-SCOPE OF COVER-SECTION I…contd.
SPECIAL EXCLUSIONS TO SECTION I-
FAULTS OR DEFECTS EXISTING AT THE TIME OF COMMENCEMENT OF THE INSURANCE
FAILURE OR INTERRUPTION OF ANY GAS , WATER OR ELECTRICITY SUPPLY
LOSS OR DAMAGE FOR WHICH THE MANUFACTURERS OR SUPPLIERS ARE RESPONSIBLE BY LAW OR UNDER CONTRACT
LOSS /DAMAGE TO EXCHANGEABLE TOOLS, BULBS,VALVES, TUBES, RI BBONS, BELT ETC. OR ANY OPERATING MEDIA (E.G.LUBRICATING OIL ETC.)UNLESS SUCH LOSS IS CAUSED BY INDEMNIFIABLE PERILS

56. ELECTRONIC EQUIPMENT POLICY-SCOPE OF COVER-SECTION I…contd.
SPECIAL EXCLUSIONS TO SECTION I-…contd.
THE EXCESS STATED IN THE SCHEDULE.THIS VARIES ACCORDING TO THE VALUE OF EQUIPMENT.
ANY COST ARISING FROM FALSE PROGRAMMING, PUNCHING OR INADVERTENT CANCELLING OF INFORMATION ETC.
CONSEQUENTIAL LOSS OF ANY KIND
WEAR AND TEAR,GRADUAL DETERIORATION DUE TO ATMOSPHERIC CONDITIONS
ELIMINATION OF ROUTINE FUNCTIONAL FAILURES
GENERAL EXCLUSIONS APPLICABLE TO ALL SECTIONS-
WAR PERILS/NUCLEAR PERILS/WILFUL ACT/NEGLIGENCE

57. ELECTRONIC EQUIPMENT POLICY-SCOPE OF COVER-SECTION II
COVERAGE UNDER SECTIONS II AND III IS OPTIONAL.SECTION II COVERS EXTERNAL DATA MEDIA
COVERAGE FOR EXTERNAL DATA MEDIA WILL BE AGAINST THE SAME PERILS COVERED UNDER
SECTION I
SUM INSURED=COST OF RESTORING THE INSURED EXTERNAL DATA MEDIA BY NEW MATERIAL AND REPRODUCING LOST INFORMATION

58. ELECTRONIC EQUIPMENT POLICY-SCOPE OF COVER- SECTION III
SECTION III COVERS INCREASED COST OF WORKING
THIS IS THE ADDITIONAL COST INCURRED DURING THE INDEMNITY PERIOD IN ORDER TO AVOID INTERRUPTION IN OPERATIONS AND DATA PROCESSING DUE TO MATERIAL DAMAGE TO INSURED PROPERTY COVERED UNDER SECTION I
SUM INSURED– INSURED MUST DECLARE THE INDEMNITY LIMIT PER HOUR AND ALSO THE TOTAL SUM INSURED REPRESENTING THE AGGREGATE LIMIT OF INDEMNITY PAYABLE FOR ALL EVENTS OCCURING DURING THE PERIOD OF INSURANCE

59. CIVIL ENGINEERING COMPLETED RISKS INSURANCE--CECR
In respect of BOT Projects, Owners/Operators of Civil Engineering structures seek comprehensive Insurance protection against loss/damage after the completion of construction work.
Structures suitable for CECR Insurance are listed below-
Roads
Runways
Bridges
Tunnels
Dams/Canals/Irrigation Systems/Reservoirs
Harbours/Dry-Docks
Sewer Systems

60. CIVIL ENGINEERING COMPLETED RISKS INSURANCE—CECR..contd.
The CECR Policy covers unforeseen and sudden physical loss/damage due to the following major perils —
Impact of landborne /waterborne vehicles, aircraft or articles dropped therefrom
E.Q., Volcanic Eruption, Tsunami
Storm, Tempest, Flood, Inundation, Frost, Avalanche, Ice, Snow
Subsidence, Landslide, Rockslide
Fire, Lightning, Explosion
Riot, Strike, Malicious Damage
Important Exclusions—
Wilful Act/Wilful Negligence of the Insured
Inherent Vice/Wear &Tear/Gradual Deterioration
Inadequate Maintenance
Consequential Losses
War and Warlike Perils/Nuclear Perils

61. CONSEQUENTIAL LOSS COVERS IN ENGINEERING INSURANCE

62. MACHINERY LOSS OF PROFIT POLICY(MLOP ) AND BOILER/PRESSURE PLANT LOSS OF PROFIT (BPPLOP)
POLICY COVERS BUSINESS INTERRUPTION LOSSES CONSEQUENTIAL UPON MATERIAL DAMAGE AS DEFINED IN THE RESPECTIVE POLICIES
POLICY PROVIDES INDEMNITY AGAINST-
LOSS OF NET PROFIT
LOSS OF INSURED STANDING CHARGES
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

63. ADVANCE LOSS OF PROFITS (ALOP) INSURANCE
The Insured in ALOP is the Principal
Concurrent Material Damage (MD) insurance is compulsory and claim admitted under that policy
Same Insurer for ALOP and MD preferred
Extremely good co-operation between all parties is necessary
Insurance period identical to MD erection period
Only one claim per policy
Only one time excess per policy
Maximum indemnity period must be selected if Plant/Machinery being installed are imported

64. FINANCIAL COSEQUENCES OF PROJECT DELAY
The Financial consequences of any delay in commissioning of a plant/project may relate to—
Liquidity i.e. Short Term Cash Flow
Profitability i.e. Long Term Cash Flow
Growth
Standing Charges and a variety of contingent expenses during the period of delay
The Sum Insured under ALOP has to be based on assumptions of Gross Profit and Increased Cost of Working and can be computed on the following basis—
Annual Gross Profit
Debt Service Charges( amortisation plus interest)
Additional Interest Charges

65. INDEMNITY UNDER ALOP Loss of gross profit due to reduction in turnover
and / or
Increase in cost of working due to “delay” caused by the operation of Insured perils
Definitions--
Gross Profit = Net Profit + Standing Charges
Net Profit = Net Trading Profit (Business Profit)
Standing Charges = Fixed Charges Incurred even in absence of business activity

66. PROJECT PERIOD AND DELAY IN START-UP
PROJECT PERIOD AND DELAY IN START-UP DUE TO OPERATION OF INSURED PERIL UNDER EAR POLICY
Insurance
Period
Marine/CAR/EAR
ALOP
Max Indemnity
Period
ALOP
Transit
Cold
Planning
Hot
On site storage/
Handling/
Construction/
Erection
Actual
Commencement
of Commercial
Operations
Testing
Scheduled date of commencement of Insured Business

67. DELAY IN START-UP DUE TO OPERATION OF INSURED PERIL
Actual Business
Commencement
Scheduled Business
Commencement
Gross
Profit
Rs./Day
Accident
Delay
Maximum Indemnity
Period
Original Contract Period
Original MD ALOP Policy Period
Final contract period
Revised MD ALOP Period

68. ONLY ONE CLAIM PER P0LICY
Accident
Only one claim
And one time excess
Per policy
Accident
Accident
Scheduled business
commencement
Time excess
D e l a y

69. THANK YOU