Session On Commercial Products: Ankit Goyal AVP and Chief UW Manager

Session on Commercial Products
Ankit Goyal
AVP and Chief UW Manager
CASE STUDY ON
STANDARD FIRE &
SPECIAL PERILS POLICY
IMMANENT CONSULTANTS & VALUERS LLP 1/30/2019 2
CONTENTS
 COVERGAES UNDER SFSP POLICY
 EXCLUSIONS OF THE POLICY
 ADD ON COVERS
 SURVEY PROCESS
 CLAIM SETTLEMENT STEPS
 CASE STUDIES
PERILS COVERED UNDER THE
SFSP POLICY

1. FIRE
A. Excluding destruction or damage caused to the property

insured by
i) its own fermentation, natural heating or spontaneous
combustion.
ii) its undergoing any heating or drying process.
B. Burning of property insured by order of any Public

Authority.

WHAT’S FIRE
It is necessary to understand the exact meaning of the
word ‘FIRE’ as used in insurance parlance.
A ‘Fire’ as Covered under a Fire Policy, is said to have
occurred when the following conditions are satisfied:-
a) There is actual ignition of property.
b) There must be something on fire which ought not to
have been on fire;
c) The Fire must have occurred under accidental
circumstances, so far as the insured is concerned.
WHAT’S FIRE….. CONT.
Once a Fire as meant by the policy has occurred, certain other
types of losses automatically come within the scope of the
Fire Policy
A. Damage during or immediately following a fire caused by
smoke.
B. Damage caused by the Fire Brigade in the discharge of their
duties / water damage.
C. Damage to property insured by exposure to weather
caused as a result of removal of property from a burning
building in an effort to mitigate the loss.
2. LIGHTINING
3. EXPLOSION / IMPLOSION
Excluding loss, destruction of or damage
A. To boilers (other than domestic boilers), economizers or other

vessels, machinery or apparatus (in which steam is Generated) or
their contents resulting from their own explosion / implosion,
B. Caused by centrifugal forces.

4. AIRCRAFT DAMAGE
Loss, Destruction or damage caused by Aircraft, other

aerial or space devices and articles dropped there from
excluding those caused by pressure waves.

5. RSMD
Loss of or visible physical damage or destruction by external violent
means directly caused to the property insured but excluding those caused
by
a) Total or partial cessation of work or the retardation or interruption or
cessation of any process.
b) Permanent or temporary dispossession resulting from confiscation,
commandeering, requisition or destruction by order of the
Government or any lawfully constituted authority.
c) Permanent or temporary dispossession of any building or plant or unit
or machinery resulting from the unlawfully occupation by any person
of such building or plant or unit or machinery or prevention of access
to the same.
d) Burglary, Housebreaking, theft, larceny or any such attempt or any
omission of any kind of any person (whether or not such act is
committed in the course of a disturbance of public peace) in any
malicious
IMMANENT CONSULTANTS & VALUERS LLP act. 1/30/2019 10
6. STFI group perils
Loss, destruction or damage directly caused by Storm, Cyclone, Typhoon,

Tempest, Hurricane, Tornado, Flood or Inundation excluding those
resulting from earthquake, Volcanic eruption or other convulsions of
nature. (Wherever earthquake cover is given as an “add on cover” the
words “excluding those resulting from earthquake volcanic eruption or
other convulsions of nature” shall stand deleted.

7. IMPACT DAMAGE
Loss of or visible physical damage or destruction caused to the

property insured due to impact by any Rail/ Road vehicle or
animal by direct contact not belonging to or owned by
A. The Insured or any occupier of the premises or

B. Their employees while acting in the course of their
employment.

8. SUBSIDENCE AND LANDSLIDE
INCL. ROCK SLIDE
Loss, destruction or damage directly caused by Subsidence of part of
the site on which the property stands or Land slide/Rock slide
excluding:
a) The normal cracking, settlement or bedding down of new

structures
b) The settlement or movement of made up ground
c) Coastal or river erosion
d) defective design or workmanship or use of defective materials
e) demolition, construction, structural alterations or repair of any
property or ground works or excavations.

9. BURSTING AND / OR
OVERFLOWING OF WATER TANKS
APPRATUS AND PIPES
10. MISSILE TESTING OPERATIONS

11. LEAKAGE FROM AUTOMATIC
SPRINKLER INSTALLATION
Excluding loss, destruction or damage caused by
a) Repairs or alterations to the buildings or premises
b) Repairs, Removal or Extension of the Sprinkler Installation
c) Defects in construction known to the Insured.
12. BUSH FIRE

Excluding loss, destruction or damage caused by Forest Fire.
GENERAL EXCLUSIONS

1. FIRE AND AOG PERIL EXCESS
Standard Fire and Special Perils Policy (except dwellings
with individual owners) Sum Insured
• Sum Insured up to INR 10 cr – 5% of claim amount subject
to a min of Rs 10,000/-
• Above INR 10 cr up to INR 100 cr- 5% of claim amount
subject to a min of Rs. 25,000
• Above INR 100 cr and up to INR 1500 cr-5% of claim amount
subject to a min of Rs. 5 lac
• Above INR 1500 Cr and up to INR 2500 cr- 5% of claim
amount subject to a min of Rs. 25 lac
• Above INR 2500 Cr per location- 5% of claim amount
subject to a min of Rs. 50 lac
TERRORISM EXCESS:
1% of the claim amount for each and every claim subject
to a minimum of INR 10,000 and a maximum of INR
5,00,000 (for residential risk)
1% of the claim amount subject to minimum of INR 25,000

and maximum of INR 10,00,000/- (for non-industrial risks)
5% of the claim amount subject to minimum of INR

1,00,000 and maximum of INR 250,00,00 (for Industrial
risks)

2. WAR AND ALLIED PERILS
Loss, destruction or damage caused by war, invasion, act

of foreign enemy hostilities or war like operations
(whether war be declared or not), civil war, mutiny, civil
commotion assuming the proportions of or amounting to a
popular rising, military rising, rebellion, revolution,
insurrection or military or usurped power.
1/30/2019 19
3.NUCLEAR RADIATIONAND IONISATION
Loss, destruction or damage directly or indirectly caused to the
property insured by
A) Ionising radiations or contamination by radioactivity from any

nuclear fuel or from any nuclear waste from the combustion of
nuclear fuel
B) The radio active toxic, explosives or other hazardous properties of

any explosive nuclear assembly or nuclear component thereof
20
4. POLLUTION & CONTAMINATION
A) Pollution or contamination which itself results from a peril hereby
insured against.
B) Any peril hereby insured against which itself results from pollution
or contamination
5. MONEY & PRECIOUS ITEMS

Loss, destruction or damage to bullion or unset precious stones, any
curios or works of art for an amount exceeding Rs. 10,000/-,
manuscripts, plans, drawings, securities, obligations or documents of any
kind, stamps, coins or paper money, cheques, books of accounts or other
business books, computer systems records, explosives unless otherwise
expressly stated in the policy.
1/30/2019 21
6. CHANGE IN TEMPERATURE
Loss, destruction or damage to the stocks in Cold Storage premises
caused by change of temperature.
7. LOSS DUE TO ELECTRICAL

SHORT CIRCUITING
Loss, destruction or damage to any electrical machine, apparatus,
fixture, or fitting arising from or occasioned by over-running, excessive
pressure, short circuiting, arcing, self heating or leakage of electricity
from whatever cause (lightning included) provided that this exclusion
shall apply only to the particular electrical machine, apparatus, fixture
or fitting so affected and not to other machines, apparatus, fixtures or
fittings which may be destroyed or damaged by fire so set up.

8. LIMITATION OF EXPENSES
Expenses necessarily incurred on (i) Architects, Surveyors
and Consulting Engineer's Fees and (ii) Debris Removal by
the Insured following a loss, destruction or damage to the
Property insured by an insured peril in excess of 3% and 1%
of the claim amount respectively.
9. CONSEQUENTIAL LOSS
Loss of earnings, loss by delay, loss of market or other
consequential or indirect loss or damage of any kind or
description whatsoever.

10. SPOLIAGE OF MATERIAL
Loss, or damage by spoilage resulting from the retardation
or interruption or cessation of any process or operation
caused by operation of any of the perils covered.
11. THEFT AND BURGLARY

Loss by theft during or after the occurrence of any insured
peril except as provided under Riot, Strike, Malicious cover.

12. EARTHQUAKE
Any Loss or damage occasioned by or through or in
consequence directly or indirectly due to earthquake,
Volcanic eruption or other convulsions of nature.
13. REMOVAL
Loss or damage to property insured if removed to any
building or place other than in which it is herein stated to
be insured, except machinery and equipment temporarily
removed for repairs, cleaning, renovation or other similar
purposes for a period not exceeding 60 days.

ADD ON COVER
S.No. Add-On Cover Rates ApplicableValue on which premium
has to be charged
1 Architector, Surveyors & Consulting Policy Rate Specified sum insured not
engineer's fee in excess of 3% exceeding 7.5% of the claim
2 Removal of debris in excess of 1% Policy Rate Specified sum insured not
exceeding 10% of the claim
3 Deterioration of stocks in cold storage 25% of Policy Sum Insured of stock
power station failure due to insured perilRate
4 Deterioration of stocks in cold storage Policy Rate Sum Insured of stock
due to machinery damage
5 Forest Fire Rs. 5 per mille Specified Sum Insured
Subject to claim
experience
6 Impact damage due to insured's own vehicle
5% of policy Policy Sum Insured
Rate
7 Spontaneous Combustion Per Mille
Category I goods Rs.0.25 Sum Insured of relative commodity
Category II goods Rs. 0.50
Category
IMMANENT CONSULTANTS & VALUERS LLP III goods Rs.0.75 1/30/2019 26
Category IV goods Rs.1.00
8 Omission to insure additions, alterationsPolicy
or Rate 5% of Sum Insured of BMA
extensions
9 Earthquake ( Fire & Shock) Per Mille*
Zone - I Rs. 0.50 Policy sum Insured
Zone - II 0.25
Zone - III 0.1
Zone - IV 0.05
10 Spoilage Material Damage Cover
A - Stock in specified block 5 time of policyValue of Stock in specified block
Rate
B - Machinery, Containers & Equipments 2.5intimes of M/C/E Value in specified block
Specified block Policy Rate
11 Leakage & Contamination Cover where the
tanks are with in insured's own premisesPer Mille
Leakage only Rs. 5
Leakage & Contamination Rs. 10
Specified Sum Insured
Where the tanks are located else where
Leakage only Rs. 6
Leakage & Contamination Rs.12
12 Temporary removal of stock clause 10% of Policy Policy sum Insured
Rate
13 Loss of Rent Clause Policy Rate Specified Sum Insured
IMMANENT CONSULTANTS & VALUERS LLP 1/30/2019
14 Insurance of additional expenses of rentPolicy Rate Specified Sum Insured27
for alternative accommodation
15 Start up expenses Policy Rate Specified Sum Insured
Long term policy for dwellings
 Minimum 3 years
 Entire Premium to be collected in advance
 No midterm inclusion of perils
 No refund if claim under the policy
 No Long term Discount on EQ & Terrorism
 Cancelled within three years – No discount
 Cancelled after three years – premium reworked based on actual
period in years.
**Cannot grant to Co-operative Societies

How to arrive at sum insured ?
 What is value ?
• Book value
• Original cost
• Sale value ???
Value is either
Reinstatement value (For Fixed Assets)
or
Market value (For Stock)
BASIS OF INDEMNITY
1) REINSTATEMENT VALUE BASIS ( R.I.V)
2) MARKET VALUE BASIS

REINSTATEMENT VALUE POLICY :
This can be given only to building & machineries)
Loss is settled on current replacement values subject to

application of average clause.
AVERAGE Value Clause
Sum insured 30000

Value 40000
Loss 16000
Amount payable = Loss x sum insured /value
= 16000 x 30000 / 40000
= 12000
Building :
Reinstatement or repairs on rates prevailing as on date
of repairs ( to be completed within 12 months from date
of loss) subject to average clause.
Machinery :
Full replacement cost subject to average clause in case
of total loss.
Full repairs cost without depreciation on replaced parts
subject to average clause in case of partial damage.
MARKET VALUE BASIS POLICY:
Loss is settled on market value of the property immediately

prior to loss subject to application of average clause.
For building & machinery : It is arrived at after

deducting depreciation
from current
reconstruction /
replacement cost.
STOCKS:
a) Raw Material - M.V., i.e. the cost at which

the insured can purchase it in the
market to replace the damaged R.M.
b) Semi finished goods - Market Value, i.e. R.M cost +
expenses incurred up to the stage it has
been processed.
c) Finished Goods - Market Value, i.e. cost of production.
Selling price can not be taken as basis
of settlement.
Underwriting Details
 Information about Proposer
 Name and Address of Proposer
 Business of Proposer
 Location of Risk
 Information about Property
 Type of Property
 Sum Insured
 Insurance/loss History
 Occupancy of risk
 Basement exposure
 Information about the Cover required
 STFI, RSMD exclusion
 Add on Covers etc
 Information about Fire Protection
 Nature of Commodity, in case of storage
RFQ
INFORMATION FOR CLAIM
INTIMATION
 POLICY NO
 INSURED NAME
 EXACT LOCATION OF LOSS
 DATE AND TIME OF LOSS
 ESTAIMTE OF LOSS
 CAUSE OF LOSS/BRIEF INCIDENCE
 CONTACT PERSON NAME AND PHONE NO

CASE STUDIES FOR COVERAGE
UNDER THE POLICY

 Electrical machine is damaged due to fire due to internal
short circuit and then spread to other parts of the plant.
 Assets acquired after inception of policy and not added in
the policy subsequently before loss.
 During Heat Treatment Material some thermostat has
malfunctioned and material undergoing process has
damaged/burnt due to rise in temperature and also damaged
the building and nearby machines.
Due to seepage of roof rain water has inundated in the
plant and damaged the plant and machinery.
 Explosion in the Industrial Boiler in nearby industry and
damaged the building glasses of the insured.

 Insured has opted out for RSMD coverage and his property
is damaged due to fire, which was spread from the nearby
building and not due to rioters directly- as in the case to the
nearby building.
 Client has not opted for the Terrorism and his plant is
damaged by the Naxals.
 AC Roof sheets damaged by the monkey.
 Land is filled with waste, sand etc and then subsequently
the plant is built on it. Over a period of time the plant is
subsidized.
 Bush fire started outside the insured’s plant- and client has
taken the steps to extinguish the fire before it touches their
plant. Expenses made in the fire fighting- (extinguishers and
some hoses burnt)- what about coverage.
SURVEYING PROCESS
 Verifying the insured name and address.
 To ascertain the Occupancy and special warranties
 inspection of the site and investigate the cause of loss
and then its analysis for the coverage and/or exclusion.
 Ascertain the loss- segregation of the affected and
unaffected loss. Preparing the Joint report for the
damages.
 Advise the loss minimization measures and protection
of salvage
 Adjust loss as per policy terms and conditions.
 Issuing final survey report.
DOCUMENTS REQUIRED
 CLAIM FORM
 FIRST INFORMATION REPORT / POLICE REPORT
 FIRE BRIGADE REPORT
 IF DAMAGE IS DUE TO “AOG” PERILS, THEN METREROLOGICAL
DEPARTMENT / NEWSPAPER CUTTINGBOOKS OF ACCOUNTS /
STOCK REGISTER / PURCHASE AND SALES BILL / DELIVERY
CHALLAN / TAX RETURN
 CLAIM BILL WITH SUPPORTING DOCUMENTS (ORIGINAL REPAIRS /
REPLACEMENT BILL)
 NOC FROM FINANCIER IF CLAIM TO BE SETTLED IN INSURED’S
NAME
 ADDITIONAL DOCUMENTS REQUIRED BY INSURER IF ANY, WILL BE
INTIMATED AS AND WHEN REQUIRED.
STEPS OF LOSS ADJUSTEMENT
 ASSESSED LOSS
 LESS DEPRECIATION/SLOW MOVING/DEAD STOCK
 LEASE ANY IMPROVEMENT
 LESS SALVAGE
 LESS UNDERINSURANCE
 LESS EXCESS
 NET ADJUSTED LOSS

CASE STUDIES

(Garment Manufacturing)
ISSUES:
 Occupancy as per policy is “SHOP” while the actual

occupancy is “garment manufacturing unit”.
 Policy is excluding basement from the scope of cover while

the actual loss has occurred in basement only and about 80%
of the contents and stock is lying in the basement
 This was the first policy taken by the client since it was first
operational year and recently the client’s order was
cancelled due to some payment issue.
 Case Study 2: Cooler Pad
Manufacturing Unit
 Wood logs are cut in the “Ara Machine” and then cut wood is
soaked in the hot water for softening.
 Soft wood is then sent to wood wool machine- where the wood is
shaved, which is called “Wood Wool” Machine.
 Wood wool is then fed in the Press machine , where the bundles are
formed and then filled in the cotton net. Thereafter the mosquito
net is wrapped over the cotton net and dispatched.

Issue:
 Occupancy as per policy is “Dessert Cooler

Manufacturing unit” while the actual occupancy is
“Cooler Pad Manufacturing unit”
 Policy is excluding stock stored in open- while the fire

has started from the stock stored in open and spread to
other section. Also almost 60-70% of the affected stock
was stored in the open.

Case Study- 3 (Gwar Processing Unit)
 Issues:
 Client is maintaining the documents in very metaculisly

manner- such as Raw material, Finished stock register,
stock issued for the production etc- but not maintaining
the register for the stock in process.
 Exaggerating the claim.

 Guar Gum is procured from the market in the jute bags ,
which are fed in the underground cemented silo. From this
storage place the material is elevated to the crusher through
pneumatics and all subsequent handlings are done in the
closed loop, i.e, in metallic piping's .
 Then material is fed in the crusher, where the cover is peeled
off and Guar is cut in two pieces, which is called ’ Dal”.
 Peeled off cover is used for the animal feed and is called as
“Churi” and “Dal” is fed in the furnace for drying.
 After Drying the material is sent to “Gum” Machine where
the material is separated out as per the size of the material
and “Tukdi” is separately packed.

INVESTIGATION THE CAUSE
 Since the fire has occurred in the stock in process area-
and in this area no body could present at the time of
operation- since lot of dust production.
 Also there is only one electrical fitting, which is not

affected as can be seen in the photographs.
 What could be the cause of loss ?

FACTS & FIGURES OF THE
CASE

Opening Purchase In Production Sales Remarks-
Stock weight per
bag in kg
Gwar 4000 13448 137480 100
Dal 62 687 49095658 80
Churi 1300 0 1290013955 70
Tukri 290 0 00 100

Abstract of Production Register
Year Dal Tukdi Churi Waste
2011-12 26.77 0.70 66.71 5.82
2012-13 30.16 0.26 66.36 3.22
2013-14 29.81 1.01 66.00 3.18

Total 3
yers 86.74 1.97 199.07 12.22
Average 28.91 0.66 66.36 4.07
Opening Stock
Purchase
In Production
Sales
verified
After Loss Physically
As per Insured
Assessment
As per Our
bag in kg
Remarks- weight per
Gwar 4000 13448 13748 0 3700 0 0 100
Dal 62 687 4909 5658 0 214 59 80
Churi 1300 0 12900 13955 245 307 376 70
Tukri 290 0 0 0 290 0 90 100

Available Sum Insured: 2 Crore
Value at Risk
Sr. No Item Quantity Rate in Rs. Amount in Rs.
1 Gwar 370000 49 18130000
2 Dal 4734 147 695957
3 Churi 17150 11 188650
4 Tukdi 29000 15 435000
5 Total 19449602

Quantity
Lost Rate Amount Remark
Gwar 0 49 0No Loss
As mentoned
Dal 4734.4 147 695957 above
Documents
Tukri 0 15 0 not produced
Spontaneous
Churi 0 11 0 Combustion
Sr. No Particulars Amount in Rs.
1 Assessed Loss 695957
Less Depreciation/Slow
2 moving/ Dead Stock 3480
3 Less Salvage 0
4 Less Underinsurance 0
Less Policy Excess-5% of (1-2-
5 3-4) 34608
6 Net Adjusted Loss 657568

Quiz?
 What is Total % of Omission to Insure that we can insure?
 Name 5 perils that are covered in Standard & Special Peril Policy?
 Is Terrorism Covered in Standard fire & Special Peril Policy?
 Basic Difference Between Omission to insure & Escalation ?

Responsibility is Our Policy
IAR & MEGA RISK INSURANCE POLICY

Product Concept & Advantages over Conventional Policies
Submitted By: Ritesh Agarwal

Contents
 Comparison of IAR Vs Fire

 Introduction
 Limitations of IAR Policy
 Special features of Mega Policy
 Advantages
 Scope of cover
 Policy Structure
 Add-ons
 Deductibles
 Rating
 Case Studies
INTRODUCTION
 Mega Risks Insurance Policy offers comprehensive
insurance solution to risks with large Sum Insured
with high concentration of values at one or more
locations.
 In Indian market, it is offered to risks that have a

Sum Insured of Rs. 2500 Cr for Material Damage
and Business Interruption (combined).
 In case of risks spread over many locations, at

least one of the locations should have a combined
MD/BI Sum Insured of Rs. 2500 Crore or more.
MEGA policies in India by following main
Corporates
 IOCL, Reliance Petroleum
 Steel – SAIL, Tata Steel, JSPL, Jindal Saw, Essar Steel
 GAIL still relying on Fire
 Power – LANCO, Reliance power,
 Cummins
 Reliance Petroleum
 Adani
 Fertlisers – KSFL, Kribhco
 Projects - DLF
 Tyres – Apollo Tyres
 Projects – Mega
IAR Insurance Fire Insurance
- It is a All Risks Policy with few - It is a Named Peril Policy.

exclusions like faulty or defective -This policy provides
design, corrosion, inventory cover for specific group of
shortage, wilful act, cessation of perils like Lightning, Explosion ,
work etc. Aircraft Damage, RSMD, STFI,
Provides cover for - Fire & allied Missile Testing Operations etc
perils, MBD, Electronic
Equipment, Boiler & Pressure
Plants, Thefts & burglary.
IAR also provides `Business
Interruption’ covers…… `Business Interruption Covers’
• Fire Loss of Profit. need to be opted separately along
(Compulsory). with each of the corresponding
• Machinery Loss of Profit. material damage cover - Fire &
(optional). MB .
In the event of a claim, under - No such condition. Condition of

insurance up to 15% is ignored. average is applicable.
Property can be covered on No such compulsion.

Reinstatement Value basis only
except for stock .
Stock Declaration Facility not Stock Declaration Facility

available. available
Add-on covers like Spontaneous Optional with extra premium.

Combustion, Spoilage Material Burglary cover is not part of Fire
Damage Cover, Burglary etc in- Insurance, to be taken separately
built, with no additional premium
IAR Insurance Engineering Insurance
- Sum Insured of Plant &

Machinery in Fire Cover has - Need not be identical.
to be identical with that for
MB/BPP/EEI Covers. - Selection possible.
- No selection possible.
A flat rate is applicable on entire sum Individual rates will be

insured of Plant & Machinery for applicable on sums insured of
MB/BPP/EEI covers together. respective machines.
IAR Insurance Engineering Insurance
- Excess is common for all M.D. Excess as per respective tariffs.

claims.
Cover for inland transit within

premises is available. - Such cover is not available.
Easy to administer because of Administratively difficult if all

single document and one renewal. covers are taken.Various
documents &various renewal date
Policies having S.I. above 100 cr Locations having Sum Inured

per location for PD & BI - 5% of upto 10 cr per location– As per
claim amount subject to a minim erstwhile TAC Tariff
um of 10 lakhs for MD and 7 days Locations having Sum Insured
of GP For FLOP and 14 days of above 10 cr per location-
GP For MLOP. For Sum Insured Non AOG Perils- 5% of claim
below 100 cr - 5% of claim amount subject to a minimum of
amount subject to a minimum of Rs 10,000. AOG Perils- 5% of
10 lakhs for MD. For FLOP, 3 claim amount subject to a
days of Std GP. MLOP as minimum of Rs 25,000
mentioned above.
IAR Insurance
Revised Excess under Industrial All Risk Policy w.e.f. 01-Apr-2011
Policies having Sum Insured upto INR 100 Cr per location for PD & BI
Material Damage - 5% of claim amount subject to a minimum of 5 lakhs

Business Interruption (FLOP)- Other than Petro Chemical Risks - 7 days
of Standard Gross Profit
Petro chemical risks - 14 days of Standard Gross Profit
Business Interruption (MLOP) - 14 days of Standard Gross Profit
Policies having Sum Insured above INR 100 Crs and upto INR 1500 Crs
per location for PD & BI
Material Damage - 5% of claim amount subject to a minimum of 10 lakhs

Rest Excess as per Sum Insured upto INR 100 Cr
Fire Insurance
Revised Excess under Fire Insurance Policy w.e.f. 01-Apr-2011
Policies having Sum Inured up to INR 10 cr per location– 5% of claim

amount subject to a minimum of Rs 10,000/-
above INR 10 cr per location up to INR 100 cr per location

5% of claim amount subject to a minimum of INR 25,000
above INR 100 cr and up to INR 1500 cr per location

5% of claim amount subject to a minimum of INR 5 lakhs
Business Interruption (FLOP)-

Other than Petro Chemical Risks – 7 days of Gross Profit
Petro chemical risks - 14 days of Gross Profit
Limitations of IAR
 Fixed coverage – cannot be structured to suit individual
requirements due to regulatory constraints.
 Coverage objects not defined – can lead to ambiguity. For
instance – AOG perils are not defined.
 Compulsory MB coverage under Section I. No separate

sections for PD and MB.
 No coverage for property under erection.
 No stock declaration/floater declaration facility.
 No coverage for collapse/cracking of buildings

Mega Risk Policy – Special Features
Clarity : structured, numbering

Language : clear, modern, understandable
Content : checked by lawyers, terms defined,
ambiguities avoided, operation of
the policy explained
Cover : up to date, comprehensive,
extendable
Flexibility : combined covers possible
Advantage of Mega Risks Policy
 Comprehensive coverage - Offers full coverage
including material damage (including machinery
breakdown) and business interruption.
 Better wordings – benchmarked to the latest

international trends in policy drafting, removing
ambiguities in coverage
 Offers great deal of flexibility in coverage – can be

structured to suit the individual requirements of client.
 A variety of add-on covers provided - this can provide

enhanced coverage on top of the standard PD/BI
coverage.
Scope of Cover – Mega Risk Policy
 Property Damage – covering FLEXA, Accidental External
Damage, Burglary, NATCAT Perils including earthquake.
 Separate Section may include machinery breakdown,

boiler explosion etc.
 Business Interruption – may include loss of profits

following machinery breakdown, boiler explosion etc.
(provided these are also covered under PD Section)
 Miscellaneous covers like Cash, Fidelity etc., may also

be part of the policy.
ANY QUERIES YOU MAY CONTACT
Ankit Goyal
Cell No: 8527793730 OR
mail id: Ankit.goyal@libertyinsurance.in or ankitgoyal31@gmail.com

Session On Commercial Products: Ankit Goyal AVP and Chief UW Manager

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Session On Commercial Products: Ankit Goyal AVP and Chief UW Manager

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Session on Commercial Products

 COVERGAES UNDER SFSP POLICY

 EXCLUSIONS OF THE POLICY

 CLAIM SETTLEMENT STEPS

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A. Excluding destruction or damage caused to the property

B. Burning of property insured by order of any Public

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A. To boilers (other than domestic boilers), economizers or other

B. Caused by centrifugal forces.

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Loss, Destruction or damage caused by Aircraft, other

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Loss, destruction or damage directly caused by Storm, Cyclone, Typhoon,

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Loss of or visible physical damage or destruction caused to the

A. The Insured or any occupier of the premises or

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a) The normal cracking, settlement or bedding down of new

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10. MISSILE TESTING OPERATIONS

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a) Repairs or alterations to the buildings or premises

b) Repairs, Removal or Extension of the Sprinkler Installation

c) Defects in construction known to the Insured.

12. BUSH FIRE

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1% of the claim amount subject to minimum of INR 25,000

5% of the claim amount subject to minimum of INR

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Loss, destruction or damage caused by war, invasion, act

A) Ionising radiations or contamination by radioactivity from any

B) The radio active toxic, explosives or other hazardous properties of

5. MONEY & PRECIOUS ITEMS

7. LOSS DUE TO ELECTRICAL

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11. THEFT AND BURGLARY

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**Cannot grant to Co-operative Societies

2) MARKET VALUE BASIS

This can be given only to building & machineries)

Loss is settled on current replacement values subject to

Sum insured 30000

Amount payable = Loss x sum insured /value

= 16000 x 30000 / 40000

Loss is settled on market value of the property immediately

For building & machinery : It is arrived at after

a) Raw Material - M.V., i.e. the cost at which

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 Occupancy as per policy is “SHOP” while the actual

 Policy is excluding basement from the scope of cover while

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 Occupancy as per policy is “Dessert Cooler

 Policy is excluding stock stored in open- while the fire

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 Client is maintaining the documents in very metaculisly

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