Annexure II Synopsis of proposed changes in MBD Policy wordings (Commercial) and the rationale for changes Summary of proposed changes in MBD wordings and the rationale for changes Reference Policy Name Existing wording Proposed Changes Rationale Machinery Breakdown Insurance Policy Machinery Insurance Policy The word Breakdown is misleading since perils other than breakdown are also covered Excl. No. 1 theft, collapse of buildings, subsidence, landslide, rockslide, water which escapes from water containing apparatus, flood, inundation, storm, tempest, earthquake, volcanic eruption or other Acts of God, impact of land borne or waterborne or airborne craft or other aerial Any loss or damage by fire within the electrical appliances and installation insured by this Policy arising from or occasioned by overrunning, excessive pressure, short circuiting, arcing, self-heating or leakage of electricity from whatever cause (lightning included), is covered, provided that this extension shall apply theft, Burglary or attempt thereat, collapse of buildings, subsidence, landslide, rockslide, water which escapes from water containing apparatus, flood, inundation, storm, tempest, earthquake, volcanic eruption or other Acts of God, impact of land borne vehicle or animal or waterborne or airborne craft or other aerial Any loss or damage by fire within the electrical machine, electronic equipment, apparatus fixtures or fitting, the electrical appliances insured by this Policy arising from or occasioned by overrunning, excessive pressure, short circuiting, arcing, self-heating or leakage of electricity, from whatever cause (lightning included), is covered; provided that this extension shall apply only to Including highlighted wording for better To be aligned with Fire Dynamo Clause - Electrical Exclusion
Excl. No. 2 a only to the particular electrical machine, apparatus, fixture, fitting or portions of the electrical installation so affected and not to other machines, apparatus, fixtures, fittings or installation which may be destroyed or damaged by fire so set up. Civil Commotion, Military or Usurped Power, Martial Law the particular electrical machine electronic equipment apparatus fixtures or fitting or installations; so affected and not to other machines, Electronic equipment apparatus fixtures or fitting or installation which may be destroyed or damaged by fire so set up. Civil Commotion, terrorism damage, Military or Usurped Power, Martial Law Incl. Terrorism Damage for better Excl. No. 4 Exclusion 6 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 Deterioration of wearing away or wearing out any part of any machine caused by or naturally resulting from normal use or exposure Wear and tear, rust, corrosion, erosion, cavitation, boiler scale, incrustation, deterioration, settling, gradual cracking, gradually developing deformation or distortion, gradual deterioration due to atmospheric condition or due to other causes, but this exclusion shall be limited to item immediately affected and shall not exclude the liability for loss or damage to other parts of the property insured as a consequence thereof. Deleted Additional provisions are added to exclude cover for damages due to the usage, exposure and age of the machine and to bring it in sync with international Wordings The previous exclusion takes care of this exclusion hence deleted
Excl. No. 8 Excl. No. 9 Basis of Indemnity Loss, damage and/or liability due to faults or defects existing at the time of commencement of this insurance and known to the insured or his responsible representative but not disclosed to the Company Loss of use of the Insured's plant or property OR any other consequential loss incurred by the Insured No such provision a) immediately notify the Company by telephone or telegram as well as in writing, giving an indication as to the nature and extent of loss or damage; Loss, damage and/or liability due to faults or defects existing at the time of commencement of this insurance and known or ought to have reasonably known to the insured or his responsible representative but not disclosed to the Company Loss of use of the Insured's plant or property of OR any other consequential loss incurred by the Insured In cases where the Insured item is subjected to total loss and meanwhile it becomes obsolete, all costs necessary to replace the lost or damaged insured item with a follow-up model (similar type) of similar structure/configuration (of similar quality) i.e. low, average or high capacity will be payable a) immediately notify the Company by telephone or telegram or email as well as in writing, giving an indication as to the nature and extent of loss or damage; Included highlighted wording for better Correction of grammar Included to take care of obsolete machinery Updating means of communication The Company shall not be liable for any loss or damage of which no notice and completed claim form have been received by the Company within Fourteen days of its occurrence The Company shall not be liable for any loss or damage of which no notice and completed claim form have been received by the Company within Fourteen days of its occurrence Only notice is required within 14 days time. Completed claim form can be submitted by the Insured latter in due course, as in most of the cases Insureds are finding it difficult to
submit all the details about the claim in one go that too within the time limit. Reinstatement of Sum Insured Upon notification of a claim being given to the Company, the insured may proceed with the repair of any minor damage not exceeding Rs. 2,500/- provided that the carrying out of such repair is without prejudice to any question of liability of the Company and that any damaged part requiring The premium will be calculated pro-rata from the day repaired item is again put to work. Upon notification of a claim being given to the Company, the insured may proceed with the repair of any minor damage not exceeding 10% of the sum insured of the affected machine subject to maximum of Rs. 2,500/- Rs. 20,000/- provided that the carrying out of such repair is without prejudice to any question of liability of the Company and that any damaged part requiring The premium will be calculated pro-rata from the date of loss day repaired item is again put to work. Limit increased to reflect cost escalations due to inflation. Also, to permit the policy holder to get the minor damages repaired without waiting for the claim process by Insurer. To align with market practice Cancellation Clause This insurance may be terminated at any time at the request of the insured, in which case the Company will retain the premium calculated at the customary short period rate for the time the policy has been in force. This insurance may also at any time be terminated at the option of the Company by 15 days notice to that effect being given to the insured, in which case the Company shall be liable to repay on demand a rateable This insurance may be terminated at any time at the request of the Insured, in which case the Company will retain the premium at customary short period rate for the time the policy has been in force. This insurance may also at any time be terminated at the option of the Company, on 15 days' notice to that effect being given to the Insured, in which case the Company shall be liable to repay on demand a rateable proportion of the premium for the unexpired term from the date of the To comply with IRDA regulations on Protection of Policyholders Interest 2017.
proportion of the premium for the unexpired term from the date of the cancellation. cancellation. It is however, further stated that such cancellation by the insurer should only be exercised on ground of mis-representation, fraud, non-disclosure of material facts and non-cooperation by the insured. Terrorism Terrorism exclusion not available TERRORISM DAMAGE EXCLUSION WARRANTY Terrorism exclusion warranty provided