INSURANCE MANUAL FOR TNB INSURANCE FACILITY FOR MINOR PROJECTS/ WORKS (BELOW RM150 MILLION) INSURER: QBE INSURANCE (MALAYSIA) BERHAD

Transcription

1 INSURANCE MANUAL FOR TNB INSURANCE FACILITY FOR MINOR PROJECTS/ WORKS (BELOW RM150 MILLION) INSURER: QBE INSURANCE (MALAYSIA) BERHAD PERIOD OF FACILITY: 1 JANUARY 2014 TO 31 DECEMBER 2016 TNB/RMD/MP (Version 1)

2 TABLE OF CONTENTS 1. INTRODUCTION SUB-TOPIC PAGE NO. 2. CONSTRUCTION/ERECTION ALL RISK (CEAR) 2.1 SUMMARY OF CEAR INSURANCE POLICY TERMS & DEDUCTIBLES 2.2 INSURANCE CLAIM PROCEDURE 2.3 SUPPORTING DOCUMENTS FOR INSURANCE CLAIM 2.4 NOTIFICATION STEPS 2.5 CLAIM STEPS FOR CEAR MARINE OPEN COVER (MOC) 3.1 SUMMARY OF MOC INSURANCE POLICY TERMS 3.2 INSURANCE CLAIM PROCEDURE 3.3 SUPPORTING DOCUMENTS FOR INSURANCE CLAIM 3.4 NOTIFICATION STEPS 3.5 CLAIM STEPS FOR MOC WORKMEN COMPENSATION (WC) 4.1 SUMMARY OF WC INSURANCE POLICY TERMS 4.2 SUPPORTING DOCUMENTS FOR INSURANCE CLAIM 4.3 NOTIFICATION STEPS 4.4 CLAIM STEPS FOR WC APPENDIX 5.1 DEFINITION 5.2 MASTER POLICY i. CONSTRUCTION ERECTIOAN ALL RISK (CEAR) ii. MARINE OPEN COVER (MOC) iii. WORKMEN COMPENSATION (WC) 23 ii

3 INTRODUCTION POLICIES This insurance guideline is prepared by Risk Management Department of Tenaga Nasional Berhad (TNB), and refers to a Master Insurance Policy issued by QBE Insurance (Malaysia) Berhad to TNB and its Contractors whom are awarded to perform works with contract value less than RM150 million. Insurance master policies which are arranged by for works below RM150 million are the followings: 1. Construction Erection All Risks (CEAR) for sum insured including; Contract Value Material provided by TNB (if any) Underground properties need to be covered (if any) 2. Workmen s Compensation (WC) for sum insured involving local workmen. 3. Marine Open Cover (MOC) This guideline is to be read together with insurance policy documents and in any case of discrepancies, the wordings of the policies shall prevail. DEFINITIONS Insurer QBE Insurance (Malaysia) Berhad Deductible The amount in respect of each claim which has to be borne by the Insured. Incident Report Form The document for advising claim details, a specimen of which is contained in Appendix A. Major Incident(s) Means where physical loss or damage is reasonably estimated at the time it occurs to be likely to result in repair or replacement costs in excess of RM300,000 and/or where death or serious bodily injury has occurred. Incident(s) Means where physical loss or damage, or bodily injury, has occurred, other than Major Incident(s) Emergency A serious situation where Insured requires immediate advice / guidance on the loss occurred. Third Party Liability Claims Legal liability to third party arising from damages to third party properties or bodily injury. 1

4 2.1 SUMMARY OF CEAR INSURANCE POLICY TERMS Property Insured : Section 1 MATERIAL DAMAGE The permanent and temporary works, materials, site accommodation and/or contents, constructional plant, tools and equipment, survey and other instruments (other than site accommodation and/or contents, constructional plant, tools and equipment belonging to or the responsibility of the Contractor) and other property used or for use in carrying out in connection with the Project the Insured s own or that for which he is responsible including offsite, or in transit (by road, rail or inland waterways in connection with the Project) thereto or there from. Section 2 THIRD PARTY LIABILITY All sums which the Insured shall be legally liable for compensation or damages in respect of: (a) Accidental death of or injury. (b) Accidental damage to property. (c) Loss of use in consequence of the aforesaid, (a) and (b) Section 3 UNDERGROUND CABLES, PIPES AND OTHER FACILITIES To indemnify the Insured/Third Party to for any sudden and unforeseen physical loss or damage to Underground Cables, Pipes and Other Facilities from any cause other than those excluded under the policy. Happening within the Geographical Limits during the period of insurance (including Maintenance Period) and arising out of the carrying out of the Project. Subject to sub-limits as defined herein. Limit of Indemnity : Section 1 MATERIAL DAMAGE The Project/Contract Works (including Free Issue materials, temporary works, workers quarters, site office, and the like as per detailed our in the Interest Insured section above) Category 1 All Projects/Contract Works of up to RM50,000, in value Category 2 All Projects/Contract Works in excess of RM50,000, and up to but not exceeding RM150,000, Section 2 THIRD PARTY LIABILITY RM 5,000,000 any one occurrence unlimited in any one period. Section 3 Underground Services Minimum RM 150, of Contract Works sum Insured or Maximum RM5,000,000 any one occurrence and in the aggregate Subject to the Insured having paid the agreed extra premium. 2

5 DEDUCTIBLES APPLIED (EACH AND EVERY LOSS) No Sum Insured AOG, Natural Hazards, Landslide/Subsiden ce and Collapse Theft Third Party Property Damage (other than Underground Service Vibration, Removal & Weakening of Support Testing & Commissioning Employer's existing / surrounding Properties (other than Underground Services) Losses to any Existing Underground Cables, Pipes & Other Facilities All other causes / losses (applicable to Section 1 only) Employer Existing / Surrounding Property 1 Up to RM250,000 RM2,500 whichever is higher 15% of Loss or Min RM5,000 RM10,000 RM5,000 whichever is higher RM5,000 RM20,000 RM7,500 whichever is higher Min RM5,000 Limit RM3,000,000 2 RM250,001 to RM RM5,000 whichever is higher 15% of Loss or Min RM7,500 RM10,000 RM7,500 whichever is higher RM7,500 whichever is higher RM20,000 RM15,000 Min RM7,500 Limit RM3,000,000 3 RM10,000,001 to RM15,000,000 RM10,000 RM20,000 RM10,000 RM12,500 RM12,500 RM20,000 RM20,000 Min RM10,000 Limit RM3,000,000 4 RM15,000,001 to RM30,000,000 RM15,000 RM35,000 RM10,000 RM20,000 RM20,000 RM20,000 RM25,000 Min RM15,000 Limit RM3,000,000 5 RM30,000,001 to RM50,000,000 RM25,000 RM50,000 RM10,000 RM35,000 RM35,000 RM20,000 RM35,000 Min RM20,000 Limit RM3,000,000 6 RM50,000,001 to RM100,000,000 RM30,000 RM75,000 RM20,000 RM50,000 RM75,000 RM35,000 RM75,000 Min RM30,000 Limit RM5,000,000 7 RM100,000,001 to RM150,000,000 RM75,000 RM100,000 RM25,000 RM100,000 RM125,000 RM35,000 RM100,000 Min RM45,000 Limit RM5,000,000 3

6 LIST OF CLAUSES AND EXCLUSION Clauses / Extensions / Warranty 1. Cessation of Work (90 days) 2. Claims preparation clause 3. Cover for Manufacturer s & Design Risk DE3 4. Strike Riot Civil Commotion 5. Cross Liability 6. Extended Maintenance (12 months from the take-over/hand) 7. Debris Removal ( Limit:15% of the total loss or maximum RM 5 mil in the aggregate) 8. Inland Transit (Limit: RM 250,000 per conveyance) 9. Destruction of Sound Property (Limit: RM500,000) 10. Escalation Clause 11. Employees Personal Effects and Tools (Limit:RM10,000) 12. Extra Charges for Overtime, Night work, work on Public Holidays, Express Freight including AirFreight (Limit: 25% of normal cost or RM1.5 mil, whichever lower for one occurrence) 13. Fire Department Service Charges (Limit: 10% of CWSI or RM750,000 whichever is lower for any one occurrence) 14. Leak & Search Cost 15. Loading and Unloading 16. Loss minimization & preventive measures (Limit: 10% of CWSI or RM500,000, whichever is lower for any one occurrence) 17. Machinery/Pair and set clause 18. Marine 50/50 clause 19. Multiple Insured clause (Non-vitiation) 20. Offsite Temporary storage and fabrication (Limit: RM10,000,000 for Equipment, RM500,000 for Cables) 21. Payment of Account 22. Plans and Specification Clause 23. Machinery/Pair and Set Clause 24. Cover for Principal s Surrounding / Existing Property (Limit:RM500,000 for 33kV cables, RM1.5mil above 33kV cables, RM5mil for Transmission Tower, RM1mil for Fibre Optic cables) 25. Professional Fees (Limit: 15% of total claim or RM2.5mil in the aggregate) 26. Public Authorities Clause (Limit: 10% of CWSI or RM500,000 whichever is lower) 27. Removal to place of safety (Maximum RM5mil in the aggregate) 28. Slope protection clause 29. Cover for Underground Cables, Pipes and Other Facilities (Limit: RM2.5mil for Power cables and RM2.5mil for Fibre Optic cables) 30. Special condition for open trenches during laying of pipelines, ducts and cables. 31. Sue and Labour 32. Temporary removal clause 33. Theft cover 34. Topping Up Clause 35. Plant and Machinery 36. Testing and Commissioning 4

7 Exclusions 1 Faulty Design 2 Wear and Tear 3 Consequential Loss 4 Money/Documents 5 Inventory Loss 6 Marine Cargo 7 Unexplained Shortage 8 Vessel/Aircraft/Vehicles 9 Contractor s Plant and Machinery 10 Sea or Air Transit 11 Wilful Act 12 Cessation Work 13 Political Risk 14 Electronic Data 15 Radioactive Contamination 16 Terrorism 17 Normal Action of Sea 5

8 2.2 INSURANCE CLAIM PROCEDURE Construction/Erection All Risk : The Insured shall upon becoming aware of any circumstances giving rise to or likely to give rise to a claim under this Policy: i. Give notice to Insurers as soon as possible but not later than 30 days and at their own expense supply full particulars and information and afford such assistance as Insurers may reasonably require; ii. iii. Give notice in the case of theft or wilful damage and render to them all reasonable assistance; Send to Insurers immediately on receipt any writ summons or other proceedings which may be commenced against the Insured; In the event of a claim being made against the Insured for which the Insured may seek indemnity under this Policy the Insured shall not negotiate pay settle admit or repudiate such claim without the written consent of the Insurers. 6

9 2.3 SUPPORTING DOCUMENTS FOR INSURANCE CLAIM Submissions of evidences to show the amount of loss suffered are important to confirm the followings: 1. The loss is covered under the policy. 2. The Insured have complied with the policy conditions. 3. The Insured is entitled to be paid for loss above deductible level and up to limits of the policy. Construction/Erection All Risk : Section 1 - Construction Material Damage The following documentations are normally required: 1. Photographs of damages before & after repair works 2. Internal incident report (damage report by engineers/supervisors) 3. Copy of the police report (incidents involving third party liability) 4. Letter/summons from third party (for claims involving damages to third party s property/bodily injury) 5. Scope of repair & costing documents to substantiate the claim, for example:- 5.1 The Specifications of Remedial Work 5.2 Method statement specifications 5.3 Relevant report ( soil test, subterranean water level test, etc) 5.4 Layout plan 6. Damage repair cost/expense documents in the form of the separate expense accounts created for each claim repair works. 7. Any additional documents that may be useful or may be requested by the Loss Adjuster. Section 2 - Third Party Liability The following documentations are normally required for claim submission: 1. Photographs of damages to third party property 2. Internal incident report (damage report by engineers/supervisors) 3. Copy of the police report (incidents involving third party liability) 4. Letter/summons from third party (for claims involving damages to third party s property/bodily injury). 5. Any additional documents that may be useful or may be requested by the Loss Adjuster. 7

10 2.4 NOTIFICATION STEPS STEP 1: 1. Check your Confirmation of Cover document for coverage period. 2. The insurance coverage will only respond the following type of claim: a. Accidental, unforeseen and sudden loss to contractor s work. b. Loss or damage to the materials or equipment intended for incorporation into the Works, but not including contractor s tools and equipment. c. Claim of loss or damage caused by third party for bodily injury or property damage. 3. Take immediate step to prevent bigger loss. In case of claim by third party, please only acknowledge receipt of letter and do not make any admission of mistake or liability. STEP 2: 1. Inform TNB Project Manager of incident. 2. TNB Project Manager or Contractor to notify claim through 3. Please call Risk Management Department in case of the following: Loss is estimated cost more than RM300,000. The incident requires immediate and urgent repair work. STEP 3: 1. Allow the Loss Adjuster appointed by Insurer, to visit to determine extend of loss. 2. Contractors shall provide supporting information, evidence, witness, document or photograph, as requested by Loss Adjuster. 3. TNB Project Manager and TNB staff shall provide supporting documents to Risk Management Department, as requested. 8

11 EMERGENCY CONTACT DETAILS Parties Name Mobile Address QBE Insurance (M) Berhad Risk Management Department Azrul Idzwan Daud Hussin / Manager Senior Manager

12 2.5 CLAIM STEPS FOR CEAR Immediately: Record evidence of loss Photograph, video or hand sketch Damages items or equipment During Repair After repair Take action to prevent bigger loss Minimise the damages Prevent further losses Immediate repair If case of claim from a Third Party,... Call Loss Adjuster for advise Do Not admit liability. Do Not say anything. Do Not discuss. Do not answer any correspondences. Forward any correspondence to Broker/Insurer. Do not admit anything to representatives or lawyer. Obtain names and addresses of any witnesses. Keep damage items or equipment List description of items Keep damaged items at site or store List down Witnesses, if any Note down: Name Contact Number Address Workers Engineers Sub-contractors 3 rd party witness Make Police Report in case of Theft Malicious Act Injury Third party property damage Third party bodily injury Death Expect Loss Adjuster visit within 24 hours... Cooperate with request for assistance Provide supporting documents. Organize documents Keep and separate expenses of... Daily labour work sheet Plant & Machinery utilisation Overhead 10

13 3.1 SUMMARY OF MOC INSURANCE POLICY TERMS Interest Insured : All types of Plant, Machinery, Equipment, Accessories and Materials (including spare parts) in connection with the design, engineering, procurement, manufacture, supply, construction, erection, installation, testing, commissioning and preparation for all Projects/Contracts as defined under the TNB Minor Works Insurance Programme Voyage : From the first commencement of the voyage at the premises of the vendor or supplier or any other including all movements in the process of packing and loading anywhere in the world (excluding all War declared areas and Sanction Countries) to the Project Site in Malaysia directly or via ports and or places in any order, via any route including transshipment by land, air, water whether customary or otherwise. Also including 90 days at consolidators and or pre-fabricators. Period in excess of 90 days held covered at rates to be agreed. Conveyance : Conveyance and vessels and/or barges by sea or water and/or by road and / or by rail and and/or by any other conveyances by land, sea or air and all connections and or locations. Cargo Limit Per Conveyance : RM10,000, any one conveyance and/or location or equivalent in other currencies. For the purpose of the above location is defined as each warehouse or place of storage or complex of buildings constituting one set of premises, including draft and rail or road conveyances at or alongside such premises. Clauses / Extensions / Warranty 1. Attachment/Termination of Transit Clause 2. Accumulation Clause 3. Cancellation Clause War Risks - 7 days Strikes Risks - 7 days except sending to/from USA which is 48 hours 4. Cancellation Clause Marine (60 days) 5. Transit Extension Clause 6. Special Replacement Clause 7. Special Replacement Clause (Duty) 8. Returned Shipment Clause 9. Paramount War Clause 10. Termination of Transit Clause (Terrorism) 11. Amended Insolvency Exclusion Clause 12. Rust, Oxidization, Discolorations Exclusion 13. Pipe work/structural Steel Cutting Clause 14. Electrical/Mechanical Derangement Clause 15. War Risks Clause /50 Clause 17. Deferred Unpacking Clause 18. General Average Clause 19. Shortage From Containers Clause 20. Packing Clause 21. Containerized Cargo Clause 22. Loading And Discharge Survey Clause 11

14 23. Labels Clause 24. Brands Clause 25. Trade Marked Cartons Clause 26. Fumigation Clause 27. Deliberate Damage Pollution Hazard Clause 28. Civil Authority Clause 29. Debris Removal Clause 30. Letter of Credit Clause 31. General Loss or Damage Survey Clause 32. Partial Loss Clause 33. Subrogation Clause 34. Declaration Basis Clause 35. Errors and Omissions Clause 36. Arbitration Clause 37. Extra Costs Clause 38. Willful Misconduct or Gross Negligence Clause 39. Cargo ISM Endorsement including Cargo ISM Forwarding Charges Clause 40. Airfreight Replacement Clause 41. Law and Practice 42. Adjustment and Settlement of Claims Clause 43. Definition of Critical Items Clause 44. Critical/Item Separation Clause 45. Survey Warranty Endorsement 46. Payment on Account Clause 47. Non Contribution Clause 48. On Deck and Over Aged Vessels Clause 49. Process Clause 50. Loss Payee Clause 51. Notice of Cancellation Clause 52. Condition Precedent to Liability Endorsement 53. Fraudulent Claims Clause 54. Subrogation Waiver Clause (excluding Equipment Manufacturers & Suppliers) 55. Multiple Assured Clause 56. Sanctions Limitations and Exclusion Clause 57. Co-Insurance and Leader Clause 58. Premium Warranty Endorsement 12

15 3.2 INSURANCE CLAIM PROCEDURE Marine Open Cover/ Transportation Insurance : Insured is to adhere to the following measures during the claim:- i. Obtain an exception report - where pilferage or damage is apparent, request for it before taking delivery. ii. Do not give a clean receipt - for goods where there is damage or the packing is in a damaged condition (Please write down remarks of damage in the delivery order) iii. Examine goods for hidden damage - within three working days of receipt. iv. Upon sight of damage - within three working days of receipt write to vessel's agents/carriers/port authorities and other relevant parties for holding them responsible for the loss/damage. v. Leave the goods in their packing until a survey had been made. If the goods have to be unpacked, keep aside the packaging for surveyor's inspection. vi. Check container for any leaks and have the damage independently witnessed before releasing the container. vii. Check container seal - to ensure it remains intact and the seal number agrees with shipping documents. If the original seal is found to be broken, apply immediately for joint survey with the carriers and port authority before removing the container from the port area. Do everything necessary to minimize the lo 13

16 3.3 SUPPORTING DOCUMENTS FOR INSURANCE CLAIM Marine Open Cover/ Transportation Insurance : To submit the following documents as soon as possible:- 1. Original Bill of Lading 2. Original or Certified copy of supplier's invoice 3. Packing List 4. Insured's Claim Bill 5. Inward/Outward Survey Report 6. Green Copy of port inward cargo charges note 7. Letter to shippers, carriers, forwarding agents and port authority for holding them responsible and their reply. 8. Lorry Consignment notes/delivery chits 9. Inward/Outward Tally Sheets (Missing Cargo Claims) 14

17 3.4 NOTIFICATION STEPS STEP 1: 4. Check your Confirmation of Cover document for coverage period. 5. The insurance coverage will only respond the following type of claim: d. Accidental, unforeseen and sudden loss to contractor s work. e. Loss or damage to the materials or equipment intended for incorporation into the Works, but not including contractor s tools and equipment. f. Claim of loss or damage caused by third party for bodily injury or property damage. 6. Take immediate step to prevent bigger loss. In case of claim by third party, please only acknowledge receipt of letter and do not make any admission of mistake or liability. STEP 2: 7. Inform TNB Project Manager of incident. 8. TNB Project Manager or Contractor to notify claim through 9. Please call Risk Management Department in case of the following: Loss is estimated cost more than RM300,000. The incident requires immediate and urgent repair work. STEP 3: 4. Allow the Loss Adjuster appointed by Insurer, to visit to determine extend of loss. 5. Contractors shall provide supporting information, evidence, witness, document or photograph, as requested by Loss Adjuster. 6. TNB Project Manager and TNB staff shall provide supporting documents to Risk Management Department, as requested. 15

18 EMERGENCY CONTACT DETAILS Parties Name Mobile Address QBE Insurance (M) Berhad Risk Management Department Azrul Idzwan Daud Hussin / Manager Senior Manager

19 3.5 CLAIM STEPS FOR MOC Write to parties involved in transit Hold responsible for damage to cargo Transporters Port authorities Carriers / shipping agents Inspect goods Do Not give clean receipts for doubtful condition... except under written protest Co-operate with Loss Adjuster or Surveyor Finalize insurance loss report Obtain insurance claim payment 17

20 4.1 SUMMARY OF WC INSURANCE POLICY TERMS Individual Declared Project/Contract : Period of Insurance (POI) as expressed in the Letter of Award but not more than thirty six (36) months from date of possession of contract site or commencement of insurance, whichever is earlier. NOTE Notwithstanding the above, any extension(s) of period of cover is automatic and shall run in tandem with the corresponding. contract works policy (where applicable) insofar as it relates to cover during the erection, testing and commissioning and maintenance period. Description of Employees Insured : a) Civil Works (Code : A) Project risks include all kinds of construction works, civil in nature not involving much mechanical works. Minimal exposure to theft losses given the relatively inexpensive project materials used. The more material risks would be that of impact damage to the works, underground services and existing/surrounding properties. b) Minor engineering/electrical and other mechanical works (Code : B) Other types of mechanical/engineering project works but less prone to theft losses given the location of site, nature of work and value of projects materials used. C) Substation, cabling and overhead distribution and transmission lines (33kV and above) (Code : C) Project works employing much mechanical. & engineering works; whereby project materials are of significant value and are therefore highly susceptible to theft losses particularly if isolated from reasonably populated areas. Estimated Annual Wages Common Law Liability Limit Clauses / Extensions / Warranty : Ten Percent (10%) of Contract Value : RM5,000, Jurisdiction clause basis of sum insured endorsement 2. SOCSO employees extension 3. Loss notification clause 4. Endorsement w60a (amended) 5. Endorsement w Endorsement w Endorsement w Endorsement w Endorsement w Endorsement a & b 11. Employee to employee extension clause 18

21 4.2 SUPPORTING DOCUMENTS FOR INSURANCE CLAIM Workmen Compensation : The following documentations are normally required for claim submission: 1. Claim form 2. Copy of Police Report 3. Medical Report (Labour Form 90 - supplied by Labour Office) 4. Death Certificate (death cases only) 5. Post Mortem Report (death cases only) 6. Original bills and receipts 7. Salary Chit / Voucher 8. Any additional documents that may be useful or may be requested by the Loss Adjuster. 19

22 4.3 NOTIFICATION STEPS STEP 1: 1. Check your Confirmation of Cover document for coverage period. 2. The insurance coverage will only respond the following type of claim: g. Accidental, unforeseen and sudden loss to contractor s work. h. Loss or damage to the materials or equipment intended for incorporation into the Works, but not including contractor s tools and equipment. i. Claim of loss or damage caused by third party for bodily injury or property damage. 3. Take immediate step to prevent bigger loss. In case of claim by third party, please only acknowledge receipt of letter and do not make any admission of mistake or liability. STEP 2: 1. Inform TNB Project Manager of incident. 2. TNB Project Manager or Contractor to notify claim through 3. Please call Risk Management Department in case of the following: Loss is estimated cost more than RM300,000. The incident requires immediate and urgent repair work. STEP 3: 1. Allow the Loss Adjuster appointed by Insurer, to visit to determine extend of loss. 2. Contractors shall provide supporting information, evidence, witness, document or photograph, as requested by Loss Adjuster. 3. TNB Project Manager and TNB staff shall provide supporting documents to EWRM Department, as requested. 20

23 EMERGENCY CONTACT DETAILS Parties Name Mobile Address QBE Insurance (M) Berhad Risk Management Department Azrul Idzwan Daud Hussin / Manager Senior Manager

24 4.4 CLAIM STEPS FOR WC Record Information Date and place of accident Brief circumstances of accident Nature of injury In-patient or out-patient Call Broker/Insurer for advise Report to Labor Office For compliance with Workmen Compensation Act. Medical report Send to Labour Office for assessment 22

25 5.1 Definitions Insurer QBE Insurance (Malaysia) Berhad Deductible Incident Report Form The amount in respect of each claim which has to be borne by the Insured. The claim details submitted through PRMS Major Incident(s) Incident(s) Emergency Third Party Liability Claims Means where physical loss or damage is reasonably estimated at the time it occurs to be likely to result in repair or replacement costs in excess of RM300,000 and/or where death or serious bodily injury has occurred. Means where physical loss or damage, or bodily injury, has occurred, other than Major Incident(s) A serious situation where Insured requires immediate advice / guidance on the loss occurred. Legal liability to third party arising from damages to third party properties or bodily injury. 23