Industrial All Risks Insurance is a wider cover than traditional “Standard Fire and Special Peril Insurance policy”. It is an all risk policy covering a wide range of perils such as fire and allied perils, burglary, accidental damage, breakdown as well as business interruption.
Coverage is defined into two Sections as follows.
- Section - I: Material Damage - It covers accidental physical loss or damage (including machinery breakdown) to the property insured (other than excluded property) due to any cause (other than excluded causes).
- Section - II: Business Interruption - It covers loss due to business interruption following a Physical loss or damage to the property covered under material damage section of the policy. Loss of Profits arising out of machinery breakdown is optional.
On payment of additional premium, the following add-on covers can be opted -
- Agreed Bank Clause
- Architects, Surveyors and consulting engineers fees clause
- Designation of Property Clause
- Escalation Clause
- Omission to insure additions, alterations & extensions clause
- Temporary removal of stocks clause
- Terrorism Cover
Exclusion is defined in the form of “Excluded Causes” and “Excluded Properties” as follows.
A. Excluded Causes
- This Policy does not cover damage to the property insured caused by:
- faulty or defective design, materials or workmanship, inherent vice, latent defect, gradual deterioration, deformation or distortion or wear and tear
- interruption of the water supply gas electricity or fuel systems or failure of the effluent disposal systems to and from the premises unless Damage by a cause not excluded in the Policy ensues and then the Company shall be liable only for such ensuing Damage.
- collapse or cracking of buildings
- corrosion, rust extremes or changes in temperature, dampness, dryness, wet or dry rot, fungus, shrinkage, evaporation, loss of weight, pollution, contamination change in colour, flavour, texture or finish, action of light, vermin, insects, marring or scratching
unless such loss is caused directly by Damage to the property insured or to premises containing such property by a cause not excluded in the Policy.
- acts of fraud or dishonesty
- disappearance, unexplained or inventory shortage, misfiling or misplacing of information, shortage in supply or delivery of materials or shortage due to clerical or accounting error
- coastal or river erosion
- normal settlement or bedding down of new structures
- Damage caused by or arising from:
- any willful act or willful negligence on the part of the Insured or any person acting on his behalf
- cessation of work delay or loss of market or any other consequential or indirect loss of any kind or description whatsoever
- Damage occasioned directly or indirectly by or through or in consequence of any of the following occurrences, namely:
- war, invasion, act of foreign enemy, hostilities or warlike operations (whether war be declared or not), civil war
- mutiny, civil commotion assuming the proportions of or amounting to a popular rising, military rising, insurrection, rebellion, revolution, military or usurped power
- permanent or temporary dispossession resulting from nationalization commandeering or requisition by any lawfully constituted authority
- permanent or temporary dispossession of any building resulting from the unlawful occupation of such building by any person provided that the Company is not relieved of any liability to the Insured in respect of Damage to the property insured occurring before dispossession or during temporary dispossession which is otherwise insured by this Policy
- the destruction of property by order of any public authority
In any action, suit or other proceeding where the Company alleges that by reason of the provisions of Exclusions A3) a) and b) above any loss destruction or damage is not covered by this insurance the burden of proving that such loss destruction or damage is covered shall be upon the Insured.
5. Damage directly or indirectly caused by or arising from or in consequence of or contributed to by:
- nuclear weapons material
- ionizing radiations or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel. Solely for the purpose of this Exclusion Combustion shall include any self-sustaining process of nuclear fission.
B. Excluded Property
This Policy does not cover:
- Money, cheques, stamps, bonds, credit cards, securities of any description, jewellery, precious stones, precious metals, bullion, furs, curiosities, rare books or works of art unless specifically mentioned as insured by this Policy
- Unless specifically mentioned as insured by this Policy goods held in trust or on commission documents manuscripts business books computer systems records patterns models moulds plans designs explosives
- vehicles licensed for road use (including accessories thereon) caravans trailers railway locomotives or rolling stock watercraft aircraft spacecraft or the like
- property in transit other than within the premises specified in the Schedule
- property or structures in course of demolition construction or erection and materials or supplies in connection therewith
- land (including top-soil back-fill drainage or culverts) driveways pavements roads runways railway lines dams reservoirs canals rigs wells pipelines tunnels bridges docks piers jetties excavations wharves mining property underground off-shore property unless specifically covered
- livestock growing crops or trees
- property damaged as a result of its undergoing any process
- property undergoing testing installation including materials and supplies thereof if directly attributable to the operations of work being performed thereon unless Damage by a cause not otherwise excluded ensues and then the Company will be liable only for such ensuing loss
- property more specifically insured
- property insured if removed to any building or place other than which it is herein stated to be insured, except machinery and equipments temporarily removed for repairs, cleaning, renovation or other similar purpose for a period not exceeding 60 days.
- damage to property which at the time of the happening of such damage is insured by or would but for the existence of this Policy be insured by any marine policy or policies except in respect of any excess beyond the amount which would have been payable under the marine policy or policies had this insurance not been effected.
Special Exclusions to Section II
- This Policy does not cover loss resulting from interruption of or interference with the business directly or indirectly attributable to
- any restrictions on reconstruction or operation imposed by any public authority
- the Insured’s lack of sufficient capital for timely restoration or replacement of property lost destroyed or damaged
- loss of business due to causes such as suspension lapse or cancellation of a lease license or order etc. which occurs after the date when the items lost destroyed or damaged are again in operating condition and the business could have been resumed, if said lease license order etc. had not lapsed or had not been suspended or cancelled
- damage to boilers economizers turbines or other vessels machinery or apparatus in which pressure is used or their contents resulting from their explosion or rupture.
- electronic installations, computers and data processing equipment
- Damage resulting from:
- deliberate erasure loss distortion or corruption of information on computer systems or other records programs or software.
- other erasure loss distortion or corruption of information on computer systems or other records programs or software unless resulting from fire, lightning, explosion, aircraft, impact by any road vehicle or animals, earthquake, hurricane, windstorm, flood, bursting overflowing discharging or leaking of water tanks apparatus or pipes in so far as it is not otherwise excluded
unless caused by Damage to the machine or apparatus in which the records are mounted.
- mechanical or electrical breakdown or derangement of machinery or equipment.
- This Policy does not cover damage to the property insured caused by:
This Policy does not cover the deductibles stated in the Schedule in respect of each and every loss under various covers.