Standard Fire Policy

WHITEHILLS PUBLICATIONS PVT.
LTD
Standard Fire Policy

General Guidelines
1. Policy
a. This standard fire policy is applicable to land-based properties, unless otherwise specifically provided
for.
b. “Dwellings” belonging to individuals are to be insured under the Home Insurance Policy.
c. The standard fire Policy covering Buildings and/or contents is to show separate amounts on (i)
Building (ii) Machinery and accessories (iii) Stock and Stock-in-Process and (iv) Furniture, Fixtures
and Fittings (v) Stock in open and (vi) other contents.
2. Valued Policy(ies)
Valued Policy(ies) can be issued only for properties whose Market Value cannot be ascertained e.g Curios,
Works of Art, Manuscripts, Obsolete machinery and the like.
3. Long Term Policies

Policies for a period exceeding 12 months are not to be issued.
4. Payment Of Premium
Premium shall be paid in full and shall not be accepted in installments or by deferred payments in any form.
It is not permissible to split sum insured of the same property under various policies for different periods of
insurance to derive advantage of deferred installments for payment of premium. However different policies
may be issued for stocks where circumstances necessitate issuance of such policies.
5. Partial Insurance
It is not permissible
a) to issue a policy covering only certain portions of a building. However, the plinth and foundations or only
the foundation of a building may be excluded.
b) to issue a policy covering only specified machinery (except Boilers), parts of machine or accessories thereof
housed in the same block/ building.
However, where portions of a building and/or machinery therein are under different ownership, it is
permissible for each owner to insure separately but to the full extent of his interest on the building and/or
machinery therein. In such cases, the Insured's interest shall be clearly defined in the policy.
6. Sum Insured
The policy in so far as it relates to Buildings, Machinery, Furniture, Fixtures, Fittings & Electrical
Installations shall be on Market Value basis, unless specifically covered on Reinstatement value basis. Stocks
shall be on Market Value basis only.
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WHITEHILLS PUBLICATIONS PVT. LTD
7. Escalation
It will be in order for Insurers to allow automatic regular increase in the Sum Insured throughout the period
of the policy in return for an additional premium to be paid in advance. The terms and conditions for this
extension shall be as follows
The selected percentage increase shall not exceed 25% of the Sum Insured.
The Sum Insured at any point of time would be assessed after application of the Escalation Clause.
Escalation Clause will apply to policies covering Building, Machinery and Accessories only and will not apply
to policies covering stock.
Escalation Clause will apply to all policies and is not restricted to policies issued on reinstatement value basis.
Pro-rata condition of Average will continue to apply as usual.

The automatic increase operates from the date of inception upto the date of operation of any of the Insured
Perils.
General Guidelines for Section II

1. Policy to Constitute Contract of Indemnity:
Every Policy shall constitute a contract of indemnity only.
2. Indemnity Period
It is not permissible to issue a policy with an Indemnity Period commencing at a date later than the date of the
damage except for a business which is silent, in which case the commencing date of Indemnity may be made
to coincide with the date on which the business would have started.
It is also not permissible to alter the indemnity period during the currency of the Policy.
3. Cover for Standing Charges only

It is not permissible to issue a policy covering standing charges only to such of those units having Net Trading
Losses.
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STANDARD FIRE POLICY

INSURER / COMPANY
A. GENERAL
In Consideration Of And Subject To
(hereinafter called the Insuring Party) named in The Schedule hereto
having paid to
(hereinafter called The Insurer or Company)
the Premium mentioned in The Schedule, The Insurer agrees subject to the terms, definitions, warranties,
exclusions, provisions and conditions contained or endorsed or otherwise expressed herein and covering the
interest of The Insured in the property at the Premises described in The Schedule for the purpose of the business
THAT if any of the property or any part thereof used by The Insured at the Premises described in The Schedule for
the purpose of the Business, is accidentally physically lost or destroyed or damaged during the Period of
Insurance, the Business carried out by The Insured at the Premises be in consequences thereof interrupted or
interfered with,
Then The Insurer will indemnify The Insured in the manner and to the extent stated in the Section(s) forming part
of this Policy of Insurance as mentioned in The Schedule.
The insurance cover provided by this Policy of Insurance is only in respect of and subject to the wording of those
Sections to which The Schedule has been completed and where this insuring agreement has been signed and
dated by The Insurer.
The Insuring Party acknowledges that it has ensured and shall continue to ensure that all parties named as
insured in any Section of this Policy of Insurance disclose to it all information required to be provided to The
Insurer shall at all time comply with any obligations which are placed upon The Insured by any provision of this
Policy of Insurance.
The due observance and fulfilment of the terms of this Policy of Insurance insofar as they relate to anything to be
done or complied with by the Insuring Party and The Insured and the truth of the statements and answers given
by or on behalf of The Insured in the Proposal as well as any statements in The Schedules to any Section of this
Policy of Insurance shall be a condition precedent to any liability on the part of The Insurer.
No alteration of the terms of this Policy of Insurance which may be agreed as between the Insuring Party and The
Insurer shall require the agreement or consent of any other party constituting The Insured under any Section.
This Policy of Insurance shall be construed in accordance with the laws of INDIA
The Language of Communication under this Policy of Insurance shall be English
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Policy issued at dated / / 200_
In witness whereof, the duly authorized agent of The Insurer signs this agreement on its behalf.
SIGNED for and on behalf of
Being the Issuing Office Duly Authorised By the Participating Insurers
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A.1. DEFINITIONS APPLICABLE TO ALL SECTIONS

The terms listed below and used in this Policy of Insurance shall have the following meanings unless they are defined
differently elsewhere or the context so requires.
Act of default means a deliberate act regardless of whether the actual consequences of such an act
were anticipated or not or a reckless failure to take the reasonably necessary
precautions which a prudent insured would take to prevent loss or damage to the
Property Insured or any deliberate act of material non-disclosure or breach of any
warranty or condition of this Policy of Insurance.
Actual Cash Value/ means the cost which in the event of loss or damage to any item or part of the
Market Value Property Insured would be necessary to replace it with one of the same age and
capacity and similar make and quality, inclusive of all materials, wages, freight,
customs, duties and dues.
Additional means any Additional Insurance Cover The Insured may decide to take out in any
Insurance Cover Section of this Policy of Insurance.
Consequential Loss means any financial loss of any kind or description whatsoever, including penalties,
loss of profit, loss of opportunity, losses due to delay, lack of performance or loss of
contract.
Deductible means the amount to be deducted from any payment otherwise to be made by The
Insurer to The Insured.
The Insured means all the parties named as The Insured in a Section of this Policy of Insurance and if
the context so requires any one of them.
The Insurer (or means the party(ies) named as such in this Policy of Insurance..
Company)
Insured Party(ies) means the individual, firm, company, corporation or joint venture specified as an
Insured in this Policy of Insurance.
Insurer’s agent means an individual, firm or company appointed by The Insurer to act on its behalf.
Insuring Party means the individual, firm, company, corporation, joint venture or combination of
the above named as such in this Policy of Insurance that has entered into this Policy of
Insurance on behalf of itself and any other party named as an insured in any Section in
this Policy of Insurance.
Language of means the language in which communication between The Insured and The Insurer
Communication under this Policy of Insurance shall take place.
Material change in means any change in the nature, exposure, location, execution and maintenance of
risk the Property Insured that a reasonably prudent insurer would consider material to the
acceptance of the risk under the terms and conditions of this Policy of Insurance.
Occurrence mean any one physical cause (not otherwise excluded) or series of physical causes
(not otherwise excluded) arising directly or indirectly from one original physical
cause (not otherwise excluded) or series of similar physical causes (not otherwise
excluded) without the intervention of any other cause starting from a new and
independent source which occurs during the Period of Insurance.
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Period of Insurance means the period during which cover is provided by this Policy of Insurance as
specified in The Schedule.
Policy of Insurance means the Proposal, the definitions, the conditions, the exclusions, The Schedule and
the Sections of this Policy of Insurance.
Premises means the location(s) of the Property Insured.
Premium means the Premium payable under this Policy of Insurance calculated in accordance
with its terms.
Premium Rate if applicable, means the rate referred to as such in The Schedule agreed between the
Insuring Party and The Insurer.
Property Insured means the Property Insured as specified in The Schedule to this Policy of Insurance
Proposal if applicable, means the written information submitted to The Insurer by the Insuring
Party seeking insurance cover under this Policy of Insurance.
Representatives means the directors, officers or any other individuals that have the authority to
exercise administrative or executive control over the execution of a contract or over
an operation or business.
The Schedule means The Schedule to the Section(s) of this Policy of Insurance in which reference is
made to it.
Section means any Section of this Policy of Insurance including The Schedule thereto.
Sum(s) Insured means the amount of insurance cover specified in The Schedule in respect of any
particular item of Property Insured or Interest Insured or the total amount of insurance
cover specified in The Schedule as the context may require.
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A.2. POLICY OUTLINE

COVERAGE: This Policy consists of coverages summarised in The Schedule and detailed in
Section I, Section II, General Conditions, General Exclusions, Specific
Conditions and Specific Exclusions, which form the Policy and are attached
hereto. The following summary of the scope of cover is for information purposes
only, without restricting or widening the cover described in the individual Sections,
any claim for completeness or assuming liability:
POLICY
SECTIONS: Section – I: STANDARD FIRE POLICY
All permanent and temporary property of The Insured and/or for which they have
an insurable interest and/or may otherwise be interested in case of fortuitous and
Compulsory accidental physical loss or damage covered under this Policy, whilst contained in
the Premises as specified in The Schedule.
Section – II: BUSINESS INTERRUPTION
To indemnify The Insured in respect of Loss of Gross Profits the loss actually
sustained during the indemnity period resulting from a reduction in Turnover
Optional including any Increased Cost of Working due to an interruption of The Insured’s
business following loss or damage to any property and / or assets insured and
recoverable under Section I,
A.3. GENERAL CONDITIONS (Applicable to All Sections)
A.3.1. Policy Interpretation, Rights and Obligations
A.3.1.1.Identification
This Policy of Insurance and The Schedule (which forms an integral part of this Policy) shall form the entire agreement
between The Insurer and the Insuring Party and any party claiming as an insured and shall be read together as one
contract and words and expressions to which specific meanings have been attached in any part of this Policy or of
The Schedule shall bear such specific meanings wherever they shall appear.
This Policy of Insurance supersedes and replaces all prior communications, representations, warranties, undertakings
and agreements between the parties whether oral or written.
A.3.1.2. Order of Precedence

It is understood and agreed that all printed clauses referred to herein apply insofar as they do not conflict with the
typewritten wording of this Policy, the typewritten wording of this Policy taking precedence and the typewritten
wordings / handwritten wordings, if any, shall be paramount.
A.3.1.3. Captions, Headings and Language

It is hereby understood and agreed that the captions and headings of the clauses are inserted herein for reference
purposes only and are not part of the clauses to which they refer.
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A.3.1.4. Assignment
Assignment or transfer of this Policy shall not be valid without the written consent of The Insurer.
A.3.1.5. Designation of Property Clause

For the purpose of determining, where necessary, the item under which any property is insured, The Insurer agrees
to accept the designation under which the property has been entered in The Insured’s books
A.3.1.6. Information rights of The Insurer and Confidentiality Agreement

The Insurer shall be permitted but not obligated to inspect The Insured’s property and operations at any reasonable
time, and The Insured shall provide The Insurer with all relevant details and information.
Neither the right to make inspections nor the making thereof nor any advice or report resulting therefrom shall
constitute an undertaking on behalf or for the benefit of The Insured or others to determine or warrant that such
property or operations are safe and healthy or are in compliance with a law, rule or regulation.
The Insurer will maintain confidential any information obtained under this Policy and not use such information
except for the purposes of the Policy.
A.3.1.7. Sum Insured

It is a requirement of this Policy of Insurance that the sum(s) insured specified in The Schedule in respect of the Property
Insured shall not be less than the Actual Cash Value/ Market Value of such property.
A.3.1.8. Cancellation
This insurance may be terminated at any time at the request of The Insured, in which case The Company will retain
the Premium at Company’s 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 cancellation.
A.3.1.9. Fraud and Forfeiture

If an Insured Party makes any claim that is fraudulent or any false declaration or statement in support thereof, this
Policy of Insurance between The Insurer and the Insured Party making such a claim shall become void and The Insurer
shall not be liable to make any payment hereunder to that party.
For the avoidance of doubt, the Insuring Party shall not be entitled to any return of Premium in the event that the
Policy of Insurance is treated as void.
A.3.1.10. Misdescription and Non-disclosure

This Policy shall be voidable in the event of mis-representation, mis-description or non-disclosure of any material
particular.
A.3.1.11. Material Change

Under any of the following circumstances the insurance ceases to attach as regards the property affected unless
The Insured, before the occurrence of any loss or damage, obtains the sanction of The Company signified by
endorsement upon the policy by or on behalf of The Company :-
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1. If the trade or manufacture carried on be altered, or if the nature of the occupation of or other
circumstances affecting the building insured or containing the insured property be changed in such a way
as to increase the risk of loss or damage by Insured Perils.
2. If the building insured or containing the insured property becomes unoccupied and so remains for a
period of more than 30 days.
3. If the interest in the property passes from The Insured otherwise than by will or operation of law.
A.3.1.12. Reasonable precautions

The Insured shall take at his own expense all reasonable precautions, maintain the property in a proper state of
repair and comply with all reasonable recommendations made by The Insurer, to prevent loss of or damage to the
Property Insured or any liability arising under this Policy of Insurance and comply with all relevant statutory
requirements.
A.3.1.13. Preventive Maintenance

It is a condition of this Policy that The Insured takes all reasonable steps to inspect and maintain the Property Insured.
Any plant, machinery or equipment forming the Property Insured shall be inspected and maintained in accordance
with the recommendations of the suppliers or manufacturers of such plant, machinery or equipment. Such
inspection and maintenance shall include safety checks, preventive inspection and maintenance, rectification of
loss or damage or faults arising from normal operation or wear and tear as well as from ageing, and shall also
include the repair or preventive replacement of components modules or parts. The Insured shall fully observe the
government and all other binding regulations in force concerning the working of the Property Insured and shall see
to it that the machinery is under the supervision of competent personnel.
A.3.1.14. Clarification Agreement

Property damage covered under this Agreement shall mean physical damage to the substance of property.
Physical damage to the substance of property shall not include damage to data or software, in particular any
detrimental change in data, software or computer programs that is caused by a deletion, a corruption or a
deformation of the original structure.
Consequently the following are excluded from this Agreement:

(1) Loss of or damage to data or software, in particular any detrimental change in data, software or computer
programs that is caused by a deletion, a corruption or a deformation of the original structure, and any business
interruption losses resulting from such loss or damage. Notwithstanding this exclusion, loss or damage to data or
software which is the direct consequence of insured physical damage to the substance of property shall be
covered.
(2) Loss or damage resulting from an impairment in the function, availability, range of use or accessibility of
data, software or computer programs, and any business interruption losses resulting from such loss or damage.
A.3.1.15. Protections-Fire Extinguishing Appliances

The Insured shall maintain all fire extinguishing appliances in efficient working order.
A.3.1.16. Notice
Every notice and other communication to The Company required by these conditions must be written or printed.
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A.4. GENERAL EXCLUSIONS (Applicable to all Sections)
Notwithstanding any provision to the contrary within this Policy or any endorsement thereto it is agreed that this
Policy excludes loss, damage, cost or expense of whatsoever nature directly or indirectly caused by, resulting from
or in connection with any of the following regardless of any other cause or event contributing concurrently or in
any other sequence to the loss:
A.4.1. Political Risks Exclusion

Notwithstanding any provision to the contrary within this Policy or any endorsement thereto it is agreed that this
Policy excludes loss, damage, cost or expense of whatsoever nature directly or indirectly caused by, resulting from
or in connection with any of the following regardless of any other cause or event contributing concurrently or in
any other sequence to the loss:
(a) war (whether declared or not), invasion, acts of foreign enemies, hostilities or warlike operations (whether
war be declared or not), civil war, rebellion, revolution, insurrection, mutiny, conspiracy, military or usurped
power, confiscation, nationalization, commandeering, requisition or damage by or under the order of any
government de jure or de facto or by any public or local authority, civil commotion assuming the proportions of
or amounting to an uprising; or
(b) any act of terrorism.
For the purpose of this clause an act of terrorism means an act, including but not limited to the use of force or
violence and/or the threat thereof, of any person or group(s) of persons, whether acting alone or on behalf of or
in connection with any organisation(s) or government(s), committed for political, religious, ideological, or ethnic
purposes or reasons including the intention to influence any government and/or to put the public, or any Section
of the public, in fear.
This clause also excludes loss, damage, cost or expense of whatsoever nature directly or indirectly caused by,
resulting from or in connection with any action taken in controlling, preventing, suppressing or in any way
relating to (a) and/or (b) above.
If The Insurer alleges that by reason of this exclusion, any loss, damage, cost or expense is not covered by this
Policy the burden of proving the contrary shall be upon The Insured.
A.4.2. Radioactive Contamination

Nuclear reaction or nuclear radiation or radioactive contamination, all whether controlled or uncontrolled, and
whether such loss be direct or indirect, proximate or remote, or be in whole or in part caused by, contributed
aggravated by the peril(s) insured hereunder, including the following:
ionising radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or
from combustion of nuclear fuel
(a) the radioactive, toxic, explosive or other hazardous or contaminating properties of any nuclear
installation, reactor or other nuclear assembly or nuclear component thereof
(b) any weapon of war, missile or like employing atomic or nuclear fission and / or fusion or other like
reaction or radioactive force or matter
(c) nuclear reaction, nuclear radiation or radioactive contamination
A.4.3. Act of default

Any Act of default committed by The Insured or its Representatives.
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A.4.4. Deductibles/ Retained Liability
The amounts stated in The Schedule as being the Deductibles, Time Excess or otherwise Insured's Retained Liability.
A.4.5. Pollution and Contamination
damage caused to the insured property by pollution or contamination excluding
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.
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B. POLICY SECTIONS
B.1. SECTION I - STANDARD FIRE POLICY
B.1.1. Property Insured

All permanent and temporary property of The Insured and/or for which they have an insurable interest and/or may
otherwise be interested in case of fortuitous and accidental physical loss or damage covered under this Policy,
whilst contained in the Premises as specified in The Schedule.
B.1.2. Insuring Clause

The Insurer agrees subject to the terms, definitions, warranties, exclusions, limits provisions and conditions of this
Section and of the Policy as a whole to indemnify The Insured against:
Accidental physical loss, destruction or damage to the property described in the schedule hereon wholly
attributable to any defined peril, except as hereinafter provided , occurring during the Period of Insurance, referred
to herein as 'damage' .
In no case shall the liability of The Insurer exceed the respective Sums Insured expressed in The Schedule except as
may be provided herein.
Defined Peril shall mean
I. Fire
but excluding damage caused to the Property Insured by
(a) 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.
(c) Forest Fire
(d) Subterranean Fire
II. Lightning
III. Explosion/Implosion
Excluding 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.
IV. Aircraft
or other aerial or space devices and articles dropped therefrom excluding those caused by pressure waves.
V. Impact
Loss of or visible physical damage 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.
VI. Leakage from Automatic Sprinkler Installations

Excluding 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.
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B.1.3. Special Exclusions to Section I
The Insurer will not be liable for Damage caused by:-
a) Loss of earnings, loss by delay, loss of market, loss of use or other consequential or indirect loss or damage of
any kind or description whatsoever
b) enforcement of any ordinance or law regulating the construction, repair or demolition of any Property Insured
hereunder
c) damage to any electrical and/or electronic 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.
d) damage to the stocks in Cold Storage Premises caused by change of temperature.
e) 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.
f) Loss by theft during or after the occurrence of any insured peril.
g) 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.
h) damage to property which, at the time of the happening of such loss or 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.
i) Any Loss or damage occasioned by or through or in consequence directly or indirectly due to Earthquake,
Volcanic eruption or other convulsions of nature.
j) Losses arising out of Typhoon, Storm, Cyclone, Tempest, Hurricane, Tornado or other atmospheric
disturbance, Flood and Inundation.
k) Losses arising out of Subsidence and Landslide including Rock slide
l) Losses arising out of Riot, Strike and Malicious Damage and acts of Terrorism
m) Expenses necessarily incurred on (i) Architects, Surveyors and Consulting Engineer's Fees and (ii) Debris
Removal by The Insured following damage to the Property Insured by an insured peril in excess of 3% and 1% of
the claim amount respectively.
B.1.4. Excluded property

The Insurer will not be liable for Damage in respect of:
a) fences and gates and loose or moveable property stored in the open caused by any weather condition (other
than lightning) or dust unless specifically covered
b) vehicles licensed for road use (including accessories), caravans, trailers, railway locomotives and/ or rolling
stock, watercraft or aircraft other than mechanically propelled plant whilst at the Premises
c) property undergoing testing including materials and supplies therefore if directly attributable to the operations
of work being performed thereon unless damage by a cause not otherwise excluded ensues and then The
Insurer will be liable only for such ensuing loss."
d) livestock, growing crops or trees
e) damage to bullion or unset precious stones, any curios or works of art for an amount exceeding Rs.10,000/-,
goods held in trust or on commission, manuscripts, plans, drawings, securities, obligations or documents of
any kind, stamps, coins or paper money, cheques, books of accounts or other business books, computer
system records, explosives unless otherwise expressly stated in the policy."
f) land, excavations, piers, jetties, bridges, culverts, roads or pavements unless specifically covered
g) property or structures in the course of construction, erection or installation
h) Property more specifically insured by or on behalf of The Insured.
i) Dwellings belonging to individuals
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B.1.5. Special Conditions for Loss settlement under Section I
B.1.5.1.Claims and Loss notification
On the happening of any loss or damage The Insured shall forthwith give notice thereof to The Company and shall
within 15 days after the loss or damage, or such further time as The Company may in writing allow in that behalf,
deliver to The Company a claim in writing for the loss or damage containing as particular an account as may be
reasonably practicable of all the several articles or items or property damaged or destroyed, and of the amount of
the loss or damage thereto respectively, having regard to their value at the time of the loss or damage not
including profit of any kind and Particulars of all other insurances, if any.
The Insured shall also at all times at his own expense produce, procure and give to The Company all such further
particulars, plans, specification books, vouchers, invoices, duplicates or copies thereof, documents, investigation
reports (internal/external), proofs and information with respect to the claim and the origin and cause of the loss
and the circumstances under which the loss or damage occurred, and any matter touching the liability or the
amount of the liability of The Company as may be reasonably required by or on behalf of The Company together with
a declaration on oath or in other legal form of the truth of the claim and of any matters connected therewith.
No claim under this policy shall be payable unless the terms of this condition have been complied with.
B.1.5.2. Basis of Settlement

In the event of any damage to the Property Insured, the basis of settlement under this policy shall be
(a) In the case of a total loss, the actual cash value of the item immediately before the occurrence of the
damage.
(b) In the case of damage which can be repaired, the cost of repairs necessary to restore the items to
their condition immediately before the occurrence of the damage, subject to actual cash value of the
items replaced.
B.1.5.3. Rights of The Insurer in case of a loss

(A)
If The Company at its option, reinstate or replace the property damaged, or any part thereof, instead of paying the
amount of the loss or damage, or join with any other Company or Insurer(s) in so doing, The Company shall not be
bound to reinstate exactly or completely but only as circumstances permit and in reasonably sufficient manner,
and in no case shall The Company be bound to expend more in reinstatement than it would have cost to reinstate
such property as it was at the time of the occurrence of such loss or damage nor more than the Sum Insured by The
Company thereon. If The Company so elect to reinstate or replace any property The Insured shall at his own expense
furnish The Company with such plans, specifications, measurements, quantities and such other particulars as The
Company may require, and no acts done, or caused to be done, by The Company with a view to reinstatement or
replacement shall be deemed an election by The Company to reinstate or replace.
If in any case The Company shall be unable to reinstate or repair the property hereby insured, because of any
municipal or other regulations in force affecting the alignment of streets or the construction of buildings or
otherwise, The Company shall, in every such case, only be liable to pay such sum as would be requisite to reinstate
or repair such property if the same could lawfully be reinstated to its former condition.
(B)
On the happening of loss or damage to any of the Property Insured by this policy, The Company may
(a) enter and take and keep possession of the building or Premises where the loss or damage has happened.
(b) take possession of or require to be delivered to it any property of The Insured in the building or on the
Premises at the time of the loss or damage.
(c) keep possession of any such property and examine, sort, arrange, remove or otherwise deal with the same.
(d) sell any such property or dispose of the same for account of whom it may Concern.
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The powers conferred by this condition shall be exercisable by The Company at any time until notice in writing is
given by The Insured that he makes no claim under the policy, or if any claim is made, until such claim is finally
determined or withdrawn, and The Company shall not by any act done in the exercise or purported exercise of its
powers hereunder, incur any liability to The Insured or diminish its rights to rely upon any of the conditions of this
policy in answer to any claim.
If The Insured or any person on his behalf shall not comply with the requirements of The Company or shall hinder or
obstruct The Company, in the exercise of its powers hereunder, all benefits under this policy shall be forfeited.
The Insured shall not in any case be entitled to abandon any property to The Company whether taken possession of
by The Company or not.
B.1.5.4. Salvage
The salvage of any insured property on the occurrence of any loss or damage herein shall accrue to The Insurer
(subject to indemnification of The Insured in full). The Insurer shall have the right to take possession of such salvage.
B.1.5.5. Underinsurance
If the property hereby insured shall at the breaking out of any fire or at the commencement of any damage to the
property by any other peril hereby insured against be collectively of greater value than the Sum Insured thereon,
then The Insured shall be considered as being his own insurer for the difference and shall bear a rateable proportion
of the loss accordingly. Every item, if more than one, of the policy shall be separately subject to this condition.
B.1.5.6. Contribution
If at the time of any loss or damage happening to any property hereby insured there be any other subsisting
insurance or insurances, whether effected by The Insured or by any other person or persons covering the same
property, this Company shall not be liable to pay or contribute more than its rateable proportion of such loss or
damage.
B.1.5.7. Loss Payee

Loss is payable to The Insured or as directed by The Insured, which shall include such party who has an insured
interest in the subject matter insured at the time of loss or damage.
B.1.5.8. Reinstatement of policy limit

At all times during the Period of Insurance of this policy the insurance cover will be maintained to the full extent of
the respective Sum Insured in consideration of which upon the settlement of any loss under this policy, pro-rata
Premium for the unexpired period from the date of such loss to the expiry of Period of Insurance for the amount of
such loss shall be payable by The Insured to The Company.
The additional Premium referred above shall be deducted from the net claim amount payable under the policy.
This continuous cover to the full extent will be available notwithstanding any previous loss for which The Company
may have paid hereunder and irrespective of the fact whether the additional Premium as mentioned above has been
actually paid or not following such loss. The intention of this condition is to ensure continuity of the cover to The
Insured subject only to the right of The Company for deduction from the claim amount, when settled, of pro-rata
Premium to be calculated from the date of loss till expiry of the policy. Notwithstanding what is stated above, the
Sum Insured shall stand reduced by the amount of loss in case The Insured immediately on occurrence of the loss
exercises his option not to reinstate the Sum Insured as above.
B.1.5.9. Disclaimer of Liability
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In no case whatsoever shall The Company be liable for any loss or damage after the expiry of 12 months from the
happening of the loss or damage unless the claim is the subject of pending action or arbitration; it being expressly
agreed and declared that if The Company shall disclaim liability for any claim hereunder and such claim shall not
within 12 calendar months from the date of the disclaimer have been made the subject matter of a suit in a court
of law then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be
recoverable hereunder.
B.1.5.10. Subrogation
The Insured shall at the expense of The Company do and concur in doing, and permit to be done, all such acts and
things as may be necessary or reasonably required by The Company for the purpose of enforcing any rights and
remedies or of obtaining relief or indemnity from other parties to which The Company shall be or would become
entitled or subrogated, upon its paying for or making good any loss or damage under this policy, whether such
acts and things shall be or become necessary or required before or after his indemnification by The Company.
B.1.5.11. Arbitration
If any dispute or difference shall arise as to the quantum to be paid under this policy (liability being otherwise
admitted) such difference shall independently of all other questions be referred to the decision of a sole arbitrator
to be appointed in writing by the parties to or if they cannot agree upon a single arbitrator within 30 days of any
party invoking arbitration, the same shall be referred to a panel of three arbitrators, comprising of two arbitrators,
one to be appointed by each of the parties to the dispute/difference and the third arbitrator to be appointed by
such two arbitrators and arbitration shall be conducted under and in accordance with the provisions of the
Arbitration and Conciliation Act, 1996.
It is clearly agreed and understood that no difference or dispute shall be referable to arbitration as hereinbefore
provided, if The Company has disputed or not accepted liability under or in respect of this policy.
It is hereby expressly stipulated and declared that it shall be a condition precedent to any right of action or suit
upon this policy arising out of the above that the award by such arbitrator/ arbitrators of the amount of the loss
or damage shall be first obtained.
B.1.6. Endorsements to Sections I

If specified in The Schedule, the following Additional Insurance Cover will be provided subject to the terms contained
herein, and it will be co-terminus with the Period of Insurance, unless otherwise provided for:
All other terms, conditions and exclusions of this Policy remain unchanged, unless otherwise specifically stated.
B.1.6.1. Fees of Architects, Engineers and Others
Policy may be extended to cover the above subject to following endorsement wordings.
“It is hereby declared and understood that the expenses incurred towards Architects, Surveyors and Consulting
Engineers fees for plans, specification tenders, quantities and services in connection with the superintendence of
the reinstatement for the Building, Machinery, Accessories and equipment insured under this policy upto 7.5% of
the adjusted loss is covered, but it is understood that this does not include any cost in connection with the
preparation of The Insured’s claim or estimate of loss in the event of damage by insured perils”.
B.1.6.2. Debris Removal Costs (in excess of 1% of claim amount)

The insurance by this Section extends to include costs and expenses necessarily incurred by The Insured with the
consent of The Insurer in:
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(a) removing debris
(b) dismantling and/ or demolishing
(c) shoring up or propping
of the portion or portions of the Property Insured by the said items which have sustained Damage.
The liability of The Insurer shall not exceed the Sublimit stated in the Specification.
The Insurer will not pay for any costs or expenses:
(a) incurred in removing debris except from the site of such property which has sustained Damage
and the area immediately adjacent to such site
(b) arising from pollution or contamination of property not insured by this Section.
Note: 1. (b)& (c) above should be deleted when neither Building nor Machinery are covered.
Note: 2. The cover may be given by separate item in the policy for an amount not exceeding 10% of the total
Sum Insured
B.1.6.3. Deterioration of stocks in Cold storage
I. Deterioration of Stocks in Cold Storage Premises due to accidental power failure consequent to
damage at the Premises of Power Station due to an insured peril
Policy covering stocks in cold storage Premises may be extended to cover the above subject to following
endorsement wordings:
“In consideration of the payment of additional Premium of Rs. it is hereby agreed and declared that
notwithstanding anything to the contrary in this policy or in any of its conditions, this policy covers damage to the
property hereby insured caused by change of temperature in consequence of failure of electric supply at the
terminal ends of electric service feeders from which The Insured obtains electric supply directly due to damage
caused by any peril insured against under this policy to property at insured Premises or any Electric Station or Sub-
Station of Public Electric Supply undertaking from which The Insured obtains electric supply.
Provided that The Company shall not be liable for any loss occasioned by the deliberate act of the Government,
Municipal or Local Authority or Supply Authority not performed for the sole purpose of safeguarding life or
protecting any part of the supply undertaking’s systems or by the exercise by any such authority of its power to
withhold or restrict or ration supply not necessitated solely by damage to the Supply Undertaking’s generating or
supply equipment by an insured peril.
Provided further that The Company shall not be liable for any loss unless the duration of each such failure exceeds
24 hours.
Subject otherwise to the terms, exceptions, conditions and limitations of this Policy.”
In any action, suit or other proceedings where The Company alleges that by reason of the provisions of this
condition any loss or damage is not covered by this insurance, the burden of proving that this loss or damage is
covered shall be upon The Insured.
II. Deterioration of stocks in cold storage Premises due to change in temperature arising out of loss or
damage to the cold storage machinery(ies) in the Insured’s Premises due to operation of insured
peril.
Policy may be extended to cover the above subject to following endorsement wordings:
“In consideration of the payment of additional Premium of Rs. it is hereby agreed and declared that
notwithstanding anything to the contrary in this policy or in any of its conditions this policy covers damage to the
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property herby insured caused by change of temperature in consequence of failure of electric supply following
damage to Insured’s property due to insured peril(s).
Provided further that The Company shall not be liable for any loss unless the duration of each such failure exceeds
24 hours.
Subject otherwise to the terms, extensions, conditions and limitations of this Policy”.
In any action, suit or other proceedings where The Company alleges that by reason of the provisions of this
condition any loss or damage is not covered by this insurance, the burden of proving that this loss or damage is
covered shall be upon The Insured.
B.1.6.4. Impact Damage due to Insured’s own Rail/Road Vehicles, Fork lifts Cranes, Stackers andthe
like and articles dropped there from.
“In consideration of an additional Premium of Rs. , it is hereby agreed and declared that the policy
is extended to cover loss and/or damage caused due to impact by direct contact to Insured’s property caused by
Insured’s own Rail/Road Vehicles, Fork lifts, cranes, stackers and the like and articles dropped therefrom.”
B.1.6.5. Spontaneous Combustion
“In consideration of the payment by The Insured to The Company of additional Premium of Rs. The
Company agrees notwithstanding what is stated in the printed exclusions of this policy to the contrary that the
insurance by (items …....) of this policy shall extend to include loss or damage by fire only of or to the Property
Insured caused by its own fermentation, natural heating or spontaneous combustion.”
B.1.6.6. Capital Additions / Newly acquired Property / Interest
Subject to the sublimit shown in The Schedule,

Policy is extended to include, in so far as the same are not otherwise insured:
(a) any newly acquired machinery and plant or newly constructed buildings, and
(b) alterations additions and improvements to buildings subsequent to a certificate of completion,
(c) alterations additions and improvements to machinery and plant, at the Insured Locations, but not inrespect
of any appreciation in value during the current Period of Insurance, provided that :
The Insured undertakes to give particulars within 15 days of commencement of The Insurer’s liability and to effect
specific insurance before the expiry of the Period of Insurance and to pay an additional Premium on demand.
B.1.6.7. Inadvertent Omissions

The Insured having notified The Company of The Insured’s intention to insure all property in which they are interested
and it being their belief that all such property is insured, if any such property shall be found to have been
inadvertently omitted, The Company will deem it to be insured within the terms of this Policy subject to payment of
the Premium on all such property as from the inception of this Policy, provided that as soon as The Insured is aware
of such error or omission, full details are declared to The Company immediately.
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B.1.6.8. Escalation
Subject to the specified percentage limit shown in The Schedule,

The following Clause shall be used :
“In consideration of the payment of an additional Premium amounting to 50% of the Premium produced by
applying the specified percentage to the annual Premium as appropriate on the under noted items(s) the Sum(s)
Insured thereby shall, during the Period of Insurance, be increased each day by an amount representing 1/365th of
the specified percentage increase per annum.
Item Number Specified percentage increase per annum
Unless specifically agreed to the contrary the provisions of this clause shall only apply to the sums insured
in force at the commencement of each Period of Insurance.
At each renewal date The Insured shall notify The Insurers:-
(i) the sums to be insured under each item above, but in the absence of such instructions the Sums Insured
by the above items shall be those stated on the policy (as amended by any endorsement effective prior to the
aforesaid renewal date) to which shall be added the increases which have accrued under this Clause during the
Period of Insurance upto that renewal date, and
(ii) the specified percentage increase(s) required for the forthcoming Period of Insurance, but in the absence of
instructions to the contrary prior to renewal date the existing percentage increase shall apply for the Period of
Insurance from renewal.
All the conditions of the policy in so far as they may be hereby expressly varied shall apply as if they had been
incorporated herein.”
B.1.6.9. Floater Cover

The following clause shall be attached for floater policy(ies) :
“In consideration of Floater Extra charged over and above the policy rate the Sum Insured in aggregate under the
policy is available for any one, more, or all locations as specified in respect of Stocks.
At all times during the currency of this policy The Insured should have a good internal audit and accounting
procedure under which the total amount at risk and the locations can be established at any particular time if
required.
The changes in the address of locations specifically declared at inception should be communicated forthwith”
B.1.6.10. Riot, Strike and Malicious Damage

A) Loss of or visible physical damage by external violent means to the Property Insured directly caused by;
I. The act of any person taking part together with others in any disturbance of the public peace (whether
in connection with a strike or lockout or not) not being an occurrence mentioned in exclusion B.1.3 (i)
and B.1.3 (j)
II. The action of any lawfully constituted authority in suppressing or attempting to suppress any such
disturbance or in minimizing the consequences of any such disturbances.
III. The wilfull act of any striker or locked out worker done in furtherance of strike or in resistance to a
lockout resulting in visible physical damage by external violent means.
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IV. The action of any lawfully constituted authority in preventing or attempting to prevent any such act or
in minimizing the consequences of any such act.
V. Any malicious act but excluding any omission of any kind of any person (whether or not such act is
committed in the course of a disturbance of public peace) provided that The Company shall not be liable for
any loss or damage arising out of or in the course of burglary, house breaking, theft or larceny or any
attempt by any person taking part therein.
B) Loss of or damage to the Property Insured by explosion or otherwise caused by
I. An act of terrorism committed by a person(s) acting on behalf of or in connection with any

organization
II. The action of any lawfully constituted authority in suppressing or attempting to suppress any such act
of terrorism or in the minimizing the consequences thereof.
B.1.6.11. Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation
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.
Seventy two hours Clause

Windstorm (Storm, Cyclone, Typhoon, Tempest, Hurricane and Tornado)
Insurers shall not be liable for any loss occurring before the effective date and time of the Policy nor for any loss
commencing after the expiration date and time of this Policy. However, The Insurer will be liable for any losses
occurring for a period of up to maximum seventy-two (72) hours after the expiration of this Policy, provided that
the first windstorm damage occurs prior to the date and time of the expiration of this Policy.
Each loss by windstorm shall constitute a single claim hereunder; provided, if more than one windstorm shall
occur within any period of seventy two (72) hours during the term of this Policy such windstorm shall be deemed
to be a single windstorm within the meaning thereof.
Official recognised Authority (or as agreed between The Insurer and The Insured) will elect the moment from which
each of the aforesaid periods of seventy two (72) hours shall be deemed to have commenced but no two such
seventy two (72) hour periods shall overlap.
Flood
Insurers shall not be liable for any loss caused by flood occurring before the effective date and time of this policy
nor for any loss commencing after the expiration date and time of this policy. However, The Insurer will be liable
for any losses occurring for a period of up to maximum seventy-two (72) hours after the expiration of this Policy,
provided that the first flood damage occurs prior to the date and time of the expiration of this Policy.
Each loss caused by flood and all losses caused by flood within a seventy-two (72) hours period shall be deemed
to constitute a single loss.
seventy two (72) hours periods shall overlap.
B.1.6.12. Earthquake (Fire and Shock) including Tsunami

“ In consideration of the payment by The Insured to The Company of the sum of additional Premium,
it is hereby agreed and declared that notwithstanding anything stated in the printed exclusions of this policy to the
contrary, this Insurance is extended to cover loss or damage (including loss or damage by fire) to any of the
Property Insured by this policy occasioned by or through or in consequence of earthquake and/or Tsunami
including flood or overflow of the sea, lakes, reservoirs and rivers and/or Landslide / Rockslide resulting
therefrom.
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Provided always that all the conditions of this policy shall apply (except in so far as they may be hereby expressly
varied) and that any reference therein to loss or damage by fire shall be deemed to apply also to loss or damage
directly caused by any of the perils which this insurance extends to include by virtue of this endorsement.”
Special conditions
Extension cover shall be granted only if the entire property in one complex / compound / location covered
under the policy is extended to cover this risk and the Sum Insured for this extension is identical to the Sum Insured
against the risk covered under main policy except for the value of the plinth and foundations of the building(s).
Onus of proof
In the event of The Insured making any claim for loss or damage under this policy he must (if so required by The
Company) prove that the loss or damage was occasioned by or through or in consequence of earthquake.
Seventy Two Hour Clause

Earthquake including Tsunami
Insurers shall not be liable for any loss caused by an earthquake occurring before the effective date and time of
this policy nor for any loss commencing after the expiration date and time of this policy. However, The Insurer will
be liable for any losses occurring for a period of up to maximum seventy-two (72) hours after the expiration of
this Policy, provided that the earthquake damage occurs prior to the date and time of the expiration of this Policy.
Any and all losses caused by earthquake shall constitute a single loss hereunder provided that more that one
earthquake shock occurring within any seventy two (72) hour period during the Period of Insurance of this Policy
shall be deemed to be a single earthquake within the meaning thereof.
seventy two (72) hours periods shall overlap.
B.1.6.13. Spoilage Material Damage Cover

Policy may be extended to include spoilage risk subject to the following conditions:-
The cover shall extend to material damage, i.e.

(i) Loss of stock in process; and
(ii) Damage to machinery, containers and equipment (including cost of removal of debris and cleaning) and
shall be provided by a separate item of the SF Policy subject to the Conditions that the perils causing the spoilage
should be the same as those covered under the Policy.
The following endorsement wording shall be used.

“In consideration of the payment of an additional Premium of Rs. it is hereby agreed and declared that,
notwithstanding anything contained to the contrary, in the within written Policy, the insurance under Item No.......
of this policy shall extend to cover loss or damage by Spoilage resulting from the retardation or interruption or
cessation of any process or operation caused by any of the perils covered under this Policy, provided that liability
for damage to the Property Insured described in The Schedule to this policy, or any part of such property, is first
admitted by The Company.
PROVIDED ALWAYS THAT all the conditions (except in so far as they may be hereby expressly varied) shall
apply as if they had been incorporated herein and that any reference therein to the loss or damage caused by
insured perils shall be deemed to apply also to loss or damage caused by Spoilage which peril this insurance
extends to include by virtue of this Endorsement.”
SPECIAL CONDITIONS
For the purpose of this Endorsement but no otherwise, the following special conditions shall apply :
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Average : If the property hereby insured against spoilage shall, at the time of occurrence of any loss or damage,
be collectively of greater value than the Sum Insured on machinery, containers, equipment and stocks in the
specified blocks, then The Insured shall be considered as being his own insurer for the difference and shall bear
rateable proportion of the loss accordingly. Every item, if more than one, of the Policy shall be separately subject
to this condition.
PROVIDED THAT it is hereby further expressly agreed and declared that the liability of The Company shall in no
case under this endorsement and the Policy exceed the Sum Insured by item Nos. of this Policy.
Sum to be Insured:
The cover must be for all stocks and machinery, container and equipment in specified blocks, specified sums
being declared for each block and must be made subject to ‘Average’.
B.1.6.14. Leakage and Contamination Cover

Scope
Policy may be extended to include the risks of (a) accidental leakage and contamination or (b) accidental leakage.
The extension will apply to oils and chemicals only. It will not apply to any other commodity.
ENDORSEMENTS
It shall be obligatory to use one of the following endorsement wordings:
(A) Where Leakage And Contamination Cover Is Granted :
“In consideration of the payment of an additional Premium of Rs. ........... it is hereby agreed and declared that the
Insurance under this policy shall, subject to terms, conditions and exclusions of this
policy and also subject to terms, conditions and exclusions hereinafter contained, extend to include the physical
loss of oil/chemical by leakage from its container by accidental means and all accidental contaminations by
contact with foreign matter.”
PROVIDED always that this policy does not cover:
a) Loss by Contamination through Improper Handling or Controls by Insured’s own Employees;

b) Loss resulting from loss of use, loss of earnings, delay or loss of markets or otherconsequential or
indirect loss or damage of any kind or description whatsoever;
c) Loss resulting from any kind of infidelity or dishonesty on the part of The Insured or any oftheir
employees, inventory shortage, mysterious disappearance or unexplained loss;
d) Loss by burglary or theft or any attempt thereat;
e) Loss resulting from processing or faulty workmanship;
f) Loss resulting from shrinkage, evaporation, loss of weight unless caused by a peril not
otherwise excluded;
g) Any legal and/or contractual liability arising from any cause whatsoever; and
h) Consequential Loss of any nature.
(B) WHERE LEAKAGE COVER ALONE IS GRANTED :
“In consideration of the payment of an additional Premium of Rs............ it is hereby agreed and declared that the
Insurance under this policy shall, subject to terms, conditions and exclusions of this Policy and also subject to
22
terms, conditions and exclusions hereinafter contained, extend to include the physical loss of oil/chemical by
leakage from its container by accidental means.
PROVIDED always that this policy does not cover :
a) loss resulting from loss of use, loss of earnings, delay or loss of markets or other consequential or
indirect loss or damage of any kind or description whatsoever;
b) loss resulting from any kind of infidelity or dishonesty on the part of The Insured or any of their employees,
inventory shortage, mysterious disappearance or unexplained loss;
c) loss by burglary or theft or any attempt thereat;
d) loss resulting from processing or faulty workmanship;
e) loss resulting from shrinkage, evaporation, loss of weight unless caused by a peril not otherwise excluded;
f) any legal and/or contractual liability arising from any cause whatsoever; and
g) Consequential Loss of any nature.
SPECIAL CONDITIONS: (Applicable to A and B)
I. The cover under this endorsement shall attach only on or after the receipt of The Insured subject matter in
land tanks as described in the policy and subject to lodgment with The Company by Insured of a certificate
obtained by them at their own expense from a competent approved and independent agency/surveyor as to
the purity and quality of the subject matter herein insured.
II. Before the commencement of pumping and/or decanting operations, The Insured shall arrange at their own
expense sampling and quality / purity certification by competent, approved and independent agency /
surveyor for such distinct lot, batch or tank load ex-ocean vessel of insured subject matter and shall
pump/decant only such material as is pure and without contaminants.
III. The Insured shall at their own expense arrange inspection and certification from competent approved and
independent agency/surveyor as to the cleanliness and fitness of the pipe lines, pumping equipment and the
receiving land tanks to carry and/or receive the insured subject matter, prior to the commencement of
pumping, decanting, receiving and/or storage operations. Such certification as mentioned above should,
inter alia, confirm that the pumping, carrying and storage equipment facilities and tanks are free from
impurities, contaminants and/or residue or left-overs from previous use of equipment, facilities or storage
tanks. As concerning the receiving land tanks an initial certificate of fitness to receive and store the insured
material shall be deemed to satisfy the above condition in so far as such tanks are concerned. However, a
fresh certification as mentioned above would be required in the event of the said tanks being empty and
fresh stocks are subsequently pumped/decanted in during the currency of this insurance.
IV. In case of loss to Property Insured hereunder, the basis of adjustment shall be the market value at the time and
place of loss.
V. All salvage recoveries and payments recovered or received subsequent to a loss settlement under this policy
shall be applied as if recovered or received prior to the said settlement and all necessary adjustment shall be
made by the parties hereto.
VI. If any breach of a clause or condition in this contract or Policy of Insurance shall occur prior to a loss under
this Policy, such breach shall not void the policy nor avail The Company to avoid the liability unless such
breach shall exist at the time of such a loss under this contract or policy, it being understood that such
breach of a clause or condition is applicable only to the specific property to which the condition or clause
has reference and in respect of which such breach occurred.
VII. If the property hereby insured shall at the time of the operation of a peril insured hereunder, be collectively
of greater value than the Sum Insured thereof, then The Insured shall be considered as being his own insurer
23
for the difference and shall bear a rateable proportion of the loss accordingly. Every item, if more than one,
of the policy shall be separately subject to this condition
NOTE: SPECIAL CONDITIONS (i), (ii) AND (iii) ARE NOT APPLICABLE WHERE LEAKAGE COVER
ALONE IS GRANTED.
B.1.6.15. Temporary Removal of property other than Stock, Raw Material and Finished goods
This Insurance covers The Insured’s property excluding Stock, Finished Goods and Raw Materials against the perils
covered under this Policy, beyond 60 days and not beyond – days and within the policy period, whilst temporarily
removed for cleaning, renovation, repair and other similar purposes, within the territorial limits specified in The
Schedule.
The amount recoverable under this Extension shall not exceed the amount which would have been recoverable
had the damage occurred in that part of the Premises from which the Property is temporarily removed and in no
case the sublimit shown in The Schedule.
The Extension does not apply to Property, if and so far as it is otherwise insured, nor to Property held by The
Insured in trust, other than machinery and plant.
B.1.6.16. Temporary Removal of Stocks Clause

It is agreed that the stock insured hereby not exceeding 10% of the total Sum Insured of such stock is covered
while temporarily removed to any other Premises for purposes of fabrication or processing or finishing or other
similar purposes. This extension does not apply to stock if and so far as it is otherwise insured.
The pro-rata condition of average should be applied to the limit of stocks temporarily removed as well as to the
total Sum Insured of such stock under the policy.
B.1.6.17. Loss of Rent Clause

POLICY may be extended to cover the above subject to following :
Where loss of rent caused by Insured Perils is covered, the following Rent Clause should be inserted in the
Policy:-
“ The insurance on rent applies only if (any of) the said building(s) or any part thereof is unfit for occupation in
consequence of its damage by the perils insured against and then the amount payable shall not exceed such
portion of the Sum Insured on Rent as the period necessary for reinstatement bears to the term of the Rent
Insured”.
B.1.6.18. Additional Expenses Of Rent For An Alternative Accommodation

Policy may be extended to cover the above subject to following :
Additional expenses of rent for an alternative accommodation in respect of non-manufacturing risks may be
covered on the following basis :
The cover may be granted for non-manufacturing Premises only.
The period of Indemnity may be limited to the period during which the original Premises remain untenantable as a
result of occurrence of perils insured against. Maximum indemnity period not to exceed 3 (three) years.
The additional expense recoverable under the policy may be additional rent actually paid i.e. the difference
between the new and the original rent only.
Certificate from the Local Municipal Authority or an Architect to the effect that Premises in question are
untenantable will be accepted as adequate proof of the fact that the Premises, in fact, have become untenantable.
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Insurance should be granted against Fire, Riot, Strike, Malicious and Terrorist Damage and Earthquake (Fire &
Shock) and other Extraneous Perils. Cover against Riot, Strike, Malicious and Terrorist Damage should be
granted only if it involves actual physical damage to the building. The cover does not intend to pay, if for
instance, The Insured’s entry is barred by strikers, demonstrators and similar occurrences.
The area for alternative accommodation may be equivalent to the area presently occupied. However, no
restriction will apply in respect of locality for the alternative accommodation, so long as the alternative
accommodation is taken in the same city, town or nearby locality.
Cover may be permitted to the tenant as also to the Owner-Occupant. Further, in respect of the Owner-
Occupant, the alternative accommodation may be limited to the area presently under his occupation.
For the Owner-Occupant, since he will not be paying any rent based on the area occupied by him (in comparison
with the actual rent being paid by the tenant in the same building or similar buildings in the same locality) the
standard rent based on the rateable values fixed by Municipal/Revenue Authorities for tax purposes may be
treated as the original rent for the purpose of this insurance.
It will be compulsory for the Owner-Occupant to insure both building and contents.
the tenant to insure the contents of the Premises for which he is seeking this extension
Endorsement wording for insurance of rent for alternative accommodation Tenant or Owner-Occupant
It is hereby declared that in the event of the Premises described in the policy and occupied by The Insured,
hereinafter referred to as ‘PREMISES’ being destroyed or damaged by any Insured Peril as to become unfit for
occupation and The Insured in consequence taking up alternative accommodation, The Company shall, subject to
special conditions set out herein, indemnify The Insured against the additional rent (as explained herein) which The
Insured is called upon to bear for the period beginning from the date of operation of any of the Insured Perils until
the ‘PREMISES’ is rendered fit for occupation such period not exceeding such reasonable time as is required to
restore the Premises with due diligence to a condition fit for occupation or the maximum indemnity period of .........
months whichever is earlier.
Provided that the liability of The Company shall not exceed Rs................ the Sum Insured hereby.
Provided further that if the sum produced by applying the monthly additional rent, borne by The Insured for the
alternative accommodation to the maximum indemnity period is more than the Sum Insured hereby, the liability of
The Company shall be proportionately reduced.
SPECIAL CONDITIONS :
This insurance shall apply subject to the condition that the PREMISES occupied by The Insured, whether as owner
or tenant, forms part of a building not being “Kutcha” Construction.
2. If the area of alternative accommodation taken by The Insured is more than the area of the PREMISES
occupied by The Insured, the additional rent borne by The Insured for the purpose of this insurance shall be deemed
to be that proportion of the additional rent actually borne by The Insured as the area of the PREMISES which was
in The Insured’s occupation bears to the area of the alternative accommodation taken by The Insured. The Insured
shall be at liberty to take alternative accommodation in any locality so long as it is within the Municipal limit of
the city or town in which the PREMISES is situated.
EXPLANATION
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Additional Rent : If The Insured is the Owner-Occupant, the additional rent borne by him is arrived at after
deducting the standard rent of the Premises from the actual rent paid for the alternative accommodation. The
standard rent shall be based on the ratable values fixed by the Municipal/Revenue authorities for tax purposes.
If The Insured is a tenant only and for safeguarding his legal tenancy rights is obliged to pay rent for the Premises
even during the period when it is not fit for occupation, the additional rent borne by him is the actual rent for the
alternative accommodation.
If The Insured is a tenant and is not obliged to pay rent for the Premises during the period when it is not fit for
occupation, the additional rent borne by him is the actual rent paid for alternative accommodation taken less the
rent which he was paying for the Premises immediately prior to the same being damaged or destroyed by Insured
Perils and rendered unfit for occupation
B.1.6.19. Start Up / Shut Down Expenses:

On the occurrence of an event which leads to a damage or loss covered under Sections I, this extension covers
actual loss sustained due to specified start-up / shut-down costs for power and utilities such as electricity, water,
steam, gas as well as feedstock, fuels or combustibles to re-establish the plant in the operational state it was at the
time of the damage in a normal start-up procedure and subject to the sublimit entered in The Schedule.
Start-up costs will not be recoverable under normal or emergency shut down operations.
B.1.6.20. Subsidence and Landslide including Rock slide

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 groundwork or excavations.
B.1.6.21. Terrorism

"It is hereby declared and agreed that in consideration of payment of additional Premium of Rs. , the
exclusion for Terrorism Damage within mentioned policy stands deleted. The expression/s "terrorism and/or act
of terrorism" shall have the same meaning/s as contained in Political Risks Exclusion.
This endorsement does not cover loss of or damage caused by

A)
(a) total or partial cessation of work or the retardation or interruption or cessation of any process
or operations or omissions of any kind.
(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 of machinery resulting
from the unlawful 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 action taken in respect of an act of terrorism.
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B)
(a) Loss or damage, cost or expenses of whatsoever nature directly or indirectly caused by,
resulting from or in connection with any action taken in controlling , preventing , suppressing
or in any way relating to action taken in respect of any act of terrorism.
If The Company alleges that by reason of this exclusion, any loss, damage, cost or expenses is not covered by this
insurance the burden of proving the contrary shall be upon The Insured.
B.1.6.22. Civil Authority
This Policy of Insurance insures against loss or increased cost occasioned by any Civil Authority’s enforcement of
any ordinance or law regulating the reconstruction, repair or demolition of any Property Insured hereunder following
an indemnifiable loss.
Subject to the limit of Sum Insured property which is insured under this Policy of Insurance is also covered against the
risk of damage or destruction by civil authority during a conflagration and for the purpose of retarding the same
provided that neither such conflagration nor such damage or destruction is caused or contributed to by war,
invasion, revolution, rebellion, insurrection or warlike operations as more fully described in General Exclusions
applicable to all Sections.
B.1.7. Standard Clauses

B.1.7.1.Agreed Bank Clause
All policies in which a Bank/Financial Institution has interest shall be issued in the name of Bank/Financial
Institution and owner or mortgagor and shall contain a suitable clause to protect their interest. A specimen copy
of the Clause is given hereunder.
"`It is hereby declared and agreed:-
That upon any monies becoming payable under this policy the same shall be paid by The Company to the Bank and
such part of any monies so paid as may relate to the interests of other parties insured hereunder shall be received
by the Bank as Agents for such other parties.
That the receipts of the Bank shall be complete discharge of The Company therefor and shall be binding on all the
parties insured hereunder.
N.B: The Bank shall mean the first named Financial Institution/ Bank named in the policy.
That if and whenever any notice shall be required to be given or other communication shall be required to be
made by The Company to The Insured or any of them in any manner arising under or in connection with this policy
such notice or other communication shall be deemed to have been sufficiently given or made if given or made to
the Bank.
That any adjustment, settlement, compromise or reference to arbitration in connection with any dispute between
The Company and The Insured or any of them arising under or in connection with this policy if made by the Bank
shall be valid and binding on all parties insured hereunder but not so as to impair rights of the Bank to recover
the full amount of any claim it may have on other parties insured hereunder.
That this insurance so far only as it relates to the interest of the Bank therein shall not cease to attach to any of
the insured property by reason of operation of condition A.3.1.12 of the Policy except where a breach of the
condition has been committed by the Bank or its duly authorised agents or servants and this insurance shall not
be invalidated by any act or omission on the part of any other party insured hereunder whereby the risk is
increased or by anything being done to upon or any building hereby insured or any building in which the goods
27
insured under the policy are stored without the knowledge of the Bank provided always that the Bank shall notify
The Company of any change of ownership or alterations or increase of hazards not permitted by this insurance as
soon as the same shall come to its knowledge and shall on demand pay to The Company necessary additional
Premium from the time when such increase of risks first took place and
It is further agreed that whenever The Company shall pay the Bank any sum in respect of loss or damage under this
policy and shall claim that as to the Mortgagor or owner no liability therefore existed, The Company shall become
legally subrogated to all the rights of the Bank to the extent of such payments but not so as to impair the right of
the Bank to recover the full amount of any claim it may have on such Mortgagor or Owner or any other party or
parties insured hereunder or from any securities or funds available.
N.B: In cases where the name of any Central Government or State Government owned and / or sponsored
Industrial Financing or Rehabilitation Financing Corporations and /or Unit Trust of India or General Insurance
Corporation of India and/or its subsidiaries or LIC of India/ any Financial Institution is included in the title of
the Fire Policy as mortgagees, the above Agreed Bank Clause may be incorporated in the Policy substituting the
name of such institution in place of the word 'Bank' in the said clause.
B.1.7.2. Contract Price Insurance Clause
In the case of insurance of imported goods only (and not for goods of local manufacture) which are sold under a
contract which is cancelled either wholly or to the extent of loss or damage, it is permissible to issue a policy on
the basis of Contract Price and the following clause shall be inserted in the Policy.
"It is hereby agreed and declared that in respect only of goods sold but not delivered for which The Insured is
responsible and with regard to which under the conditions of sale, the sale contract is by reason of the perils
covered under the Policy, cancelled either wholly or to the extent of the loss or damage, the liability of The
Company shall be based on the contract price and for the purpose of average the value of all goods to which the
clause would in the event of loss or damage be applicable shall be ascertained on the same basis."
B.1.7.3. Reinstatement Value Clause
Reinstatement value insurance may be granted on Buildings, Machinery Furniture, Fixture and Fittings only
subject to the incorporation of the following memorandum in the policy:
"It is hereby declared and agreed that in the event of the Property Insured under (Item Nos......of ) within the
policy being destroyed or damaged, the basis upon which the amount payable under (each of the said items of)
the policy is to be calculated shall be cost of replacing or reinstating on the same site or any other site with
property of the same kind or type but not superior to or more extensive than the insured property when new as
on date of the loss, subject to the following Special Provisions and subject also to the terms and conditions of the
policy except in so far as the same may be varied hereby."
Special Provisions
The work of replacement or reinstatement (which may be carried out upon another site and in any manner
suitable to the requirements of The Insured subject to the liability of The Company not being thereby increased) must
be commenced and carried out with reasonable dispatch and in any case must be completed within 12 months
after the damage or within such further time as The Company may in writing allow, otherwise no payment beyond
the amount which would have been payable under the policy if this memorandum had not been incorporated
therein shall be made.
Until expenditure has been incurred by The Insured in replacing or reinstating the property destroyed or damaged
The Company shall not be liable for any payment in excess of the amount which would have been payable under
the policy if this memorandum had not been incorporated therein.
28
If at the time of replacement or reinstatement the sum representing the cost which would have been incurred in
replacement or reinstatement if the whole of the property covered had been destroyed, exceeds the Sum Insured
thereon or at the commencement of any damage to such property by any of the perils insured against by the
policy, then The Insured shall be considered as being his own insurer for the excess and shall bear a rateable
proportion of the loss accordingly. Each item of the policy (if more than one) to which this memorandum applies
shall be separately subject to the foregoing provision.
This Memorandum shall be without force or effect if
(a) The Insured fails to intimate to The Company within 6 months from the date of damage or such further time as
The Company may in writing allow his intention to replace or reinstate the property destroyed or damaged.
(b) The Insured is unable or unwilling to replace or reinstate the property destroyed or damaged on the same or
another site.
B.1.7.4. Local Authorities Clause
Reinstatement Value Policy may be extended to cover additional cost of reinstatement solely by reason of the
necessity to comply with the regulations of local authority by incorporating the following clause in the policy.
"The insurance by this policy extends to include such additional cost of reinstatement of the destroyed or
damaged property hereby insured as may be incurred solely by reason of the necessity to comply with the Building
or other Regulations under or framed in pursuance of any act of Parliament or with Bye-laws of any Municipal or
Local authority provided that
1) The amount recoverable under this extension shall not include :
a) the cost incurred in complying with any of the aforesaid Regulations or Bye-laws,
i) in respect of damage occurring prior to the granting of this extension,
ii) in respect of damage not insured by the policy,
iii) under which notice has been served upon The Insured prior to the happening of the damage,
iv) in respect of undamaged property or undamaged portions of property other than foundations (unless
foundations are specifically excluded from the insurance by this policy) of that portion of the property destroyed
or damaged,
b) the additional cost that would have been required to make good the property damaged or destroyed to a
condition equal to its condition when new had the necessity to comply with any of the aforesaid Regulations of
Bye-laws not arisen,
c) the amount of any rate, tax, duty, development or other charge or assessment arising out of capital
appreciation which may be payable in respect of the property or by the owner thereof by reason of compliance
with any of the aforesaid Regulations or Bye-laws.
2) The work of reinstatement must be commenced and carried out with reasonable dispatch and in any case
must be completed within twelve months after the damage or within such further time as The Insurers may (during
the said twelve months) in writing allow and may be carried out wholly or partially upon another site (if the
aforesaid Regulations or Bye-laws so necessitate) subject to the liability of The Insurer under this extension not
being thereby increased.
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3) If the liability of The Insurer under (any item of) the policy apart from this extension shall be reduced by the
application of any of the terms and conditions of the policy then the liability of The Insurers under this extension
(in respect of any such item) shall be reduced in like proportion.
4) The total amount recoverable under any item of the policy shall not exceed the Sum Insured thereby.
5) All the conditions of the policy except in so far as they may be hereby expressly varied shall apply as if they
had been incorporated herein."
6) No additional Premium shall be charged for inclusion of this clause in this policy.
B.1.7.5. Declaration Clause
The following clause shall be attached to Declaration Policy(ies).
1) In consideration of the Premium by this policy being provisional in that it is subject to adjustment on expiry of
each Period of Insurance.
“The Insured agrees to declare to the ....................... Company in writing the value of his stocks less any amount
insured by Policies other than declaration policies, in each separate building or non-communicating compartment
or in the open on the highest value at risk during the month and to make such declaration(s) latest by the last day
of the succeeding month. Such declaration(s) shall be signed by The Insured or by a responsible person authorised
to sign on his behalf.
If other policies on declaration basis cover the stocks hereby insured, the declarations shall be made so as to
apportion to each policy a share of the value of the stocks insured under such declaration policies, PRO RATA
to the respective amounts named in the policies.
In the event of a declaration not being made latest by the last day of the succeeding month , then The Insured shall
be deemed to have declared the Sum Insured hereby as the value at risk.
On the expiry of each Period of Insurance the Premium shall be calculated at the rate of .................... (insert the Premium
Rate) on the average Sum Insured namely, the total of the values declared or deemed to have been declared divided
by the number of declarations deemed to have been made.
If the resultant Premium is less than the provisional Premium, the difference shall be repaid to The Insured but such
repayment shall not exceed 50% of the provisional Premium.
Further it is hereby agreed and understood that no reduction in Sum Insured shall be allowed during the currency
of the policy
2) The basis of value for declarations shall be the market value and any loss hereunder shall be settled on the basis
of the Market Value immediately anterior to the loss.
3) If at the time of any loss, there be any subsisting insurance or insurances on other than a declaration basis,
whether effected by The Insured or by any other person or persons, covering the stocks hereby insured, this policy
shall apply only to the excess of the value of such stocks at the time of the loss over the Sum Insured by such other
insurance or insurances, and this Company shall not be liable to pay or contribute more than that proportion of
such loss which such excess (or, if there be other declaration insurances covering the same stocks, a rateable
proportion of such excess) but not exceeding the Sum Insured hereby, bears to the total value of the stocks.
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4) If after the occurrence of a loss it is found that the amount of the last declaration previous to the loss is less
than the amount that ought to have been declared, then the amount which would have been recoverable by The
Insured shall be reduced in such proportion as the amount of the said last declaration bears to the amount that
ought to have been declared.
5) Notwithstanding the occurrence of loss it is understood that the Sum Insured will be maintained at all times
during the currency of the policy and The Insured therefore undertakes to pay extra Premium on the amount of any
loss pro rata from the date of such loss to the expiry of the Period of Insurance, the Premium being calculated at the
rate applicable to the stocks destroyed and such extra Premium shall not be take into account in, and shall be
distinct from, the final adjustment of Premium.
6) In event of this policy being cancelled by The Insured during its currency (whether stocks exist or not) the
Premium to be retained by The Company shall be the appropriate Prorata Premium calculated on the average amount
insured upto the date of cancellation plus reasonable policy administration charges, or 50% of the provisional
Premium whichever is greater. Notwithstanding the above, if the policy is cancelled by The Insured after a loss has
occurred, the Premium to be retained by The Company shall be the PRO RATA proportion of the Premium calculated
on the average amount insured upto the date of cancellation plus the PRO RATA proportion of the Premium from
the date of loss to the expiry of the Period of Insurance on the amount of loss paid, or 50% of the provisional
Premium whichever is greater.
7) The maximum liability of The Company shall not exceed the Sum Insured hereby and Premium shall not be
receivable on value in excess thereof. The Sum Insured may, however, be increased by prior agreement with The
Company in which event the new Sum Insured and the date from which it is effective will be recorded on the policy
by endorsement. In the event of an increase in the Sum Insured being agreed to, The Company shall charge on such
increased sum an additional provisional Premium on a basis proportionate to the unexpired period of the policy
and upon expiry of each Period of Insurance the total provisional Premium so paid shall be adjusted as provided for in
Clause 1 above. If during the currency of the policy, the rate for the class of risk to which the insurance applies is
revised, and an increase in the Sum Insured under a Declaration Policy is agreed to, The Company shall charge on
such increased sum an additional provisional Premium on a basis proportionate to the unexpired period of policy,
at the rate at which the insurance was originally effected and upon expiry of each Period of Insurance the total
provisional Premium so paid shall be adjusted as provided for in Clause 1 above.
8) If the stocks hereby insured shall at the time of loss be collectively of greater value than the Sum Insured
thereon, then The Insured shall be considered as being his own insurer for the difference and shall bear a rateable
proportion of the loss accordingly. Every item, if more than one, on stock shall be separately subject to this
condition.
9) It is warranted that every other policy on a declaration basis covering the stocks insured hereby shall be
identical in wording with this policy.
10) This insurance is subject in all respects to the printed conditions of the policy except in so far as they may be
varied by the above conditions.
B.1.7.6. Additional Insureds (to be named in The Schedule)

It is understood and agreed that any individual, firm, corporation and/or its joint ventures, for whom or with
whom The Insured may be operating is hereby named as additional Insured in The Schedule when required by
contract, or as required. It is further understood and agreed that in the event there is any violation of the terms
and conditions of this insurance by one Insured, it shall not affect the rights of other Insureds; including interest
of mortgagees and notice of assignment in respect thereof.
B.1.7.7. Multiple Insured Clause
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If in any Section The Insured comprises of more than one party each operating as a separate and distinct entity, this
Policy of Insurance shall, unless otherwise provided for in this Policy of Insurance, apply as if a separate policy had been
issued to each of these parties provided always that The Insurer’s overall liability towards the parties that constitute
The Insured in any Section shall not exceed the Sum Insured and any limits of indemnity specified in The Schedule to
that Section.
Any payment made by The Insurer to any Insured Party as a result of an occurrence of loss or damage shall reduce,
by the amount of that payment, The Insurer’s liability towards all Insured Parties that constitute The Insured arising
from that occurrence under this Policy of Insurance.
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B.2. SECTION II – BUSINESS INTERRUPTION
B.2.1. Definitions
Annual turnover means the Turnover which, had the interruption of or interference with the
Business Insured not occurred, would have been achieved during the twelve
months preceding either the date when the Business Insured is no longer
affected or when the indemnity period ends, whichever is the earlier.
Business Insured means the commercial operation of the Property Insured specified in The
Schedule to this Section.
Debt service means the amount of the annual payment(s) of interest and if specified the
charges principal on borrowings due by The Insured.
Gross Profit means the amount by which the value of the Turnover and the value of the
closing stock and work in progress exceed the value of the opening stock
and work in progress and the amount of the specified working expenses. The
value of the opening and closing stocks and work in progress shall be
calculated in accordance with The Insured’s normal accounting methods, due
provisions being made for depreciation (Diminution of Value)
Increased Cost of means the additional expenditure necessarily and reasonably incurred for the
Working sole purpose of avoiding or diminishing the loss of Interest Insured, which,
without such expenditure, would have taken place.
Interest Insured means either the Gross Profit including any Increased Cost of Working or the
Specified standing charges including any Increased Cost of Working.
Monetary means the amount to be deducted from any payment otherwise to be made
deductible by The Insurer.
Maximum means the maximum period(s) stated in The Schedule in respect of which
indemnity period cover is afforded for the Interest Insured by this operational business
interruption section, beginning subsequent to the occurrence of the Damage
and ending not later than the period as specified in The Schedule during which
the results of the Business shall be affected in consequence of the damage.
Rate of Gross means the percentage of Gross Profit which, had the interruption of or
Profit interference with the Business Insured not occurred, would have been earned
on the Annual turnover .
Specified standing means any fixed costs specified in The Schedule which continue to be payable
charges/ expenses in full during the indemnity period
Specified working means any costs incurred for the acquisition of goods, raw materials,
Charges/ expenses chemicals and portion of utilities consumption or auxiliaries as well as for
supplies unless required for the upkeep of operations and any costs for
packaging, carriage, freight, intermediate storage, turnover tax, purchase tax,
licence fees, excise duty, interest on bills and royalties, insofar as such costs
are dependent on Turnover.
Turnover means the amount of money (less discounts allowed) paid or payable to The
Insured for goods, products or services sold, delivered or rendered in the
course of the Business Insured.
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B.2.2. Insuring Clause

The Insurer shall indemnify The Insured subject to the terms, definitions, warranties, exclusions, limits provisions
and conditions of this Section and of the Policy of Insurance as a whole for a loss of the Interest Insured unless
specifically excluded if at any time during the Period of Insurance the Property Insured under any of the operational
material damage Sections of this Policy of Insurance suffers loss or damage indemnifiable under the operational
material damage Sections or which would have been indemnifiable under the operational material damage
Sections but for the application of a deductible, thereby causing an interruption of or interference with the Business
Insured in the proportion of said interruption or interference for the part of the Property concerned
B.2.3. Indemnification
The indemnity for the loss of Interest Insured shall be in respect of:
(a) Gross Profit, the loss actually sustained during the indemnity period resulting from a reduction in
Turnover including any Increased Cost of Working
or
(b) Specified standing charges, the amount actually not earned during the indemnity period resulting from a
reduction in Turnover including any Increased Cost of Working.
The indemnity shall not exceed the Sum Insured for the Maximum indemnity period.
B.2.4. Sum Insured
The Sum Insured shall be
(a) the annual Gross Profit specified in The Schedule
or
(b) the annual Specified standing charges.
Should the Maximum indemnity period exceed twelve months, the Gross Profit or the Specified standing charges shall be
the pro rata amount for that period.
B.2.5. Period of Insurance
The Period of Insurance shall be the period specified in The Schedule.
Should at any time after the commencement of this Policy of Insurance
(a) the business be wound up or carried on by a liquidator or receiver or administrator or be permanently
discontinued,
(b) The Insured’s interest cease otherwise than by death, then the cover under this Section shall cease on the
respective date unless specifically agreed by The Insurer in writing.
B.2.6. Indemnity period
The indemnity period shall be the period during which the Interest Insured is affected by an interruption of or
interference with the Business Insured beginning on the date of the occurrence of loss or damage and not exceeding
the Maximum indemnity period specified in The Schedule.
B.2.7. Premium
Premium shall be paid at the inception of this Policy of Insurance and shall be calculated by multiplying the Sum Insured
by the Premium Rate.
If The Insured declares at the latest twelve months after the expiry of any Period of Insurance that the Gross Profit
earned during the accounting period of twelve months most closely concurrent with any Period of Insurance, as
certified by The Insured’s auditors, was less than the Sum Insured thereon, a pro rata return of Premium not exceeding
50% of the Premium paid on such Sum Insured for such Period of Insurance shall be made in respect of the difference.
If any loss or damage has occurred giving rise to any payment under this Section then the amount of any such
payment shall be added to the Gross Profit as certified by The Insured’s auditors and any return of Premium shall be
based on the difference between such sum and the Sum Insured.
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B.2.8. Time excess and monetary Deductible

In any one occurrence of loss or damage The Insurer shall not be liable for the amount obtained by multiplying the
average daily value of the Interest Insured by the number of days specified in The Schedule as the time excess plus any
additional amount of any Monetary deductible specified in The Schedule,
B.2.9. Additional Exclusions for Business Interruption
In addition to the exclusions under General Conditions of this Policy of Insurance this Section II shall not cover any
loss resulting from interruption of or interference with the Business directly or indirectly attributable to any of the
following causes:
(a) loss or damage covered under the operational material damage Section by way of endorsement, unless
expressly specified as covered in The Schedule;
(b) any restrictions imposed by public authority, including restrictions imposed on reconstruction or operation;
(c) Consequential Loss due to causes such as suspension, lapse or cancellation of a lease, licence or order, etc.,
which occurs after the date when the items lost, destroyed or damaged are in operating condition again and
the Business Insured could have been resumed if said lease, licence or order, etc. had not lapsed or had not
been suspended or cancelled
(d) shortage of raw materials, semi-finished or finished products or other materials required for proper
operation, not caused by loss or damage to such property by an insured peril under Section I.
(e) erasure, loss, distortion or corruption of information on computer systems or other records or software
programs unless resulting from an occurrence of loss or damage indemnifiable under the operational
material damage section.
(f) loss or damage for which the manufacturer or supplier of the property is responsible either by law or under
contract.
(g) The Insured not having at his disposal in good time sufficient capital for repairing or replacing destroyed or
damaged machinery;
(h) The Insurer shall not be liable for the amount of any fines or damages for breach of contract, for late or non-
completion of orders, or for penalties of whatever nature.
B.2.10. Special Conditions pertaining to Claims notification and The Insured’s special obligations
following an occurrence of loss or damage
(a) The Insured shall be obliged to keep for the Period of Insurance complete records of the Business Insured,
including without limitation - inventories, production and balance sheets for the three preceding years. All records
shall be held in safekeeping and, as a precaution against their being simultaneously destroyed, The Insured shall
keep separate sets of such records.
(b) In the event of any occurrence of loss or damage which might cause an interruption of or interference
with the Business Insured
i. The Insured shall immediately notify The Insurer and send it written confirmation thereof within forty-
eight hours of the occurrence;
ii. The Insurer and The Insurer’s Agents shall have unlimited access to the Premises to establish the possible
cause and extent of the loss or damage, its effect on the Interest Insured, to examine the possibilities for
minimizing the interruption of or interference with the Business Insured, and if necessary to make
reasonable recommendations for the avoidance or minimization of such interruption or interference;
iii. The Insurer and The Insurer’s Agents shall have the right to enter any building where the loss has
happened and may take possession of or require that any of the damaged Property Insured be rendered to
35
them and may keep possession of and deal with such damaged Property Insured for all reasonable
purposes and in any reasonable manner. This condition shall be evidence of the leave and licence of
The Insured to The Insurer so to do.
(c) If The Insured or anyone acting on his behalf hinders or obstructs The Insurer in any way or does not
comply with any recommendations The Insurer may make pursuant to clause B.2.10 (b) above, all benefits under
this Section shall be forfeited.
(d) In the event of a claim being made under this Section, The Insured shall at his own expense deliver to The
Insurer not later than thirty days after the interruption of or interference with the Business Insured or within such
further periods as The Insurer may allow in writing a written statement setting forth particulars of the claim.
(e) The Insured shall at his own expense produce and furnish to The Insurer such books of account and
other business books or other evidence as may reasonably be required by The Insurer for the purpose of
investigating or verifying the claim together with, if required, a statutory declaration of the truth of the claim and
of any matters connected therewith.
B.2.11. Conditions for Loss settlement under Section II

In the event of an interruption of or interference with the Business Insured the basis of loss settlement under this
Section shall be as follows:
B.2.11.1. Loss of Gross Profit
In respect of loss of Gross Profit, The Insurer shall pay the amount obtained by multiplying the Rate of Gross Profit
with the amount by which the actual Turnover during the indemnity period falls short of the Turnover, which would
have been achieved, had the loss or damage not occurred.
If the annual Sum Insured hereunder is less than the amount obtained by multiplying the Rate of Gross Profit by the
Annual turnover or, if the indemnity period exceeds twelve months, the Turnover calculated for the equivalent
period, the amount payable shall be reduced proportionately.
B.2.11.2. Specified standing charges

In respect of Specified standing charges, The Insurer shall pay the amount obtained by multiplying the percentage by
which the actual Turnover during the indemnity period falls short of the Turnover which would have been achieved
had the interruption of or interference with the Business Insured not occurred by the amount of Specified standing
charges incurred during the interruption or interference.
If the Sum Insured hereunder is less than the amount obtained by multiplying the Rate of Gross Profit by the Annual
turnover or, if the indemnity period exceeds twelve months, the pro rata Turnover for that period, the amount
payable shall be reduced proportionately.
B.2.11.3. Increased Cost of Working

In respect of Increased Cost of Working, The Insurer shall pay the additional expenditure necessarily and reasonably
incurred for the sole purpose of avoiding or diminishing the reduction in Turnover which, without such
expenditure, would have occurred during the indemnity period.
The indemnity shall not exceed the amount of loss of Interest Insured thereby avoided.
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B.2.11.4. Calculation of Rate of Gross Profit and Annual turnover

In calculating the Rate of Gross Profit and Annual turnover, the following aspects shall be taken into consideration:
(a) the trend of the Business Insured;
(b) the results of the Business Insured during the financial year preceding the date of the loss or damage or, in
the event of the loss or damage occurring during the first year of commercial operation, the Turnover
during the following financial year;
(c) any circumstances affecting the Business Insured either before or after loss or damage or which would have
affected the Business Insured had the loss or damage not occurred;
(d) any benefits from deferred sales as a consequence of an interruption of or interference with the Business
Insured which The Insured may receive during a period of six months immediately following the re-
commissioning of insured plant and/or machinery after a loss or damage;
(e) allowance for the time spent on any overhauls, inspections or modifications carried out during the period
the Business Insured was affected by any interruption or interference;
(f) any money paid or payable in respect of goods which are sold or services which are rendered elsewhere
than at the Premises for the benefit of the Business Insured either by The Insured or by another party acting on
his behalf;
(g) any amount saved during the indemnity period in respect of any charges and expenses of the business
payable out of the Gross Profit that may cease or be reduced in consequence of loss or damage.
The final figures shall represent as closely as may be deemed reasonable the results, which the Business Insured
would have achieved, had the loss or damage not occurred
B.2.11.5. Payment of Indemnity

The Insurer shall be entitled to postpone payment if
(a) there are doubts as to The Insured’s right to receive payment, in which case payment shall not
become due until such time as the necessary proof is furnished by The Insured or The Insurer accepts liability;
(b) as a result of any loss or damage or any interference with or interruption of the Business Insured,
police or criminal investigations have been initiated against The Insured, in which case payment will not
become due until the completion of such investigations, provided always that if The Insured is convicted of
any offence in respect of any claim for indemnity under this Policy of Insurance, the insurance cover under this
Section shall be void.
B.2.12. Special Conditions pertaining to Section II

B.2.12.1. Alternative Trading Clause:
If during the Indemnity Period goods shall be sold or services shall be rendered elsewhere than at the Premises for
the benefit of the Business either by The Insured or by others on his behalf the money paid or payable in respect of
such sales or services shall be brought into account in arriving at the Turnover during the Indemnity Period.
B.2.12.2. Uninsured Standing Charges Clause

If any standing charges of the Business be not insured by this Policy of Insurance (having been deducted in arriving
at the Gross Profit as defined herein) then in computing the amount recoverable hereunder as Increase in Cost of
Working, that proportion only of any additional expenditure shall be brought into account which the Gross Profit
bears to the sum of the Gross Profit and the uninsured standing charges.
Where the Specified working Charges are recognised variable charges, the Uninsured Standing Charges Clause and the
reference hereto should be deleted.
37
B.2.12.3. Professional Accountants Clause:

Any particulars or details contained in The Insured’s books of account or other business books or documents
which may be required by The Insurer for the purpose of investigating or verifying any claim hereunder may be
produced by professional accountants and their report shall be prima facie evidence of the particulars and details
to which such report relates.
The Insurer will pay to The Insured the reasonable charges payable by The Insured to their professional accountants
for producing such particulars or details or any other proofs, information or evidence as may be required by The
Insurer and reporting that such particulars or details are in accordance with The Insured’s books of account or other
business books or documents provided that the sum of the amount payable under this clause shall not exceed the
limit stated in The Schedule and the amount otherwise payable under the Policy of Insurance shall in no case exceed the
liability of The Insurer as stated.
B.2.13. Additional Memoranda for Business Interruption
B.2.13.1. Overhauls
In calculating the loss, due allowance shall be made for the time spent on any overhauls, inspections or
modifications carried out during any period of interruption.
B.2.13.2. Departmental Clause
If the Business be conducted in Departments, the independent trading results of which are ascertainable the
indemnity provisions of clauses 1 a) and 1 b) of the item of Gross Profit shall apply separately to each Department
affected by the incident.
B.2.13.3. Accumulated Stock Clause:
In adjusting any loss, account shall be taken and an equitable allowance made if any shortage in Turnover due to the
damage is postponed by reason of the Turnover being temporarily maintained from accumulated stocks of finished
goods in The Insured’s warehouses.
B.2.13.4. Arbitration
If any dispute or difference shall arise as to the quantum to be paid under this policy (liability being otherwise
admitted) such difference shall independently of all other questions be referred to the decision of a sole arbitrator
to be appointed in writing by the parties to or if they cannot agree upon a single arbitrator within 30 days of any
party invoking arbitration, the same shall be referred to a panel of three arbitrators, comprising of two arbitrators,
one to be appointed by each of the parties to the dispute/difference and the third arbitrator to be appointed by
such two arbitrators and arbitration shall be conducted under and in accordance with the provisions of the
Arbitration and Conciliation Act, 1996.
It is clearly agreed and understood that no difference or dispute shall be referable to arbitration as hereinbefore
provided, if the Company has disputed or not accepted liability under or in respect of this policy.
It is hereby expressly stipulated and declared that it shall be a condition precedent to any right of action or suit
upon this policy arising out of the above that the award by such arbitrator/ arbitrators of the amount of the loss
or damage shall be first obtained.
B.2.14. Extensions to Section II
B.2.14.1. Power and Utilities extension

Subject to the sublimit shown in The Schedule
this Section II of the Policy of Insurance extends to include insured interest as defined in B.2.3. of this Section II for
interruption of or interference with The Insured’s operation during the period of failure that exceeds the agreed
time excess and resulting from Loss or Damage (as within defined) which occurs within the term of this Policy of
Insurance to:
(a) Electrical Transmission and other Electrical Equipment and to Gas, Telephone, Telecommunications,
Fuel, Water, Steam, Nitrogen, Air, Hydrogen, Sewage and Effluent, Refrigeration, Transmission Lines and
38
related Plants, Substations and Equipment or other Utility Systems all situated on or outside The Insured’s
Locations limited however to not exceeding 60 consecutive days.
(b) Dams, Reservoirs or Equipment connected therewith where water, used as Raw Material or for other
manufacturing purposes stored behind such Dams or Reservoirs is released from storage and causes an
interruption of business as a result of lack of Water Supply from such sources, limited however to not
exceeding 60 consecutive days.
Provided that after application of all the terms and conditions of this Policy of Insurance, the liability of The
Insurer under this Section of the Policy of Insurance shall not exceed the Sum Insured.
The Insurer shall not be liable for any loss resulting from the interruption of supply directly or indirectly
attributable to:
(a) rationing, which was not caused by unforeseen material loss or damage to the public supply;
(b) water shortage due to climatic or meteorological conditions;
(c) the production in The Insured’s plant still being interrupted or disturbed after the resumption of the public
supply, unless otherwise agreed.
B.2.14.2. Specified Customers (as named in The Schedule)
This Section is extended to include the actual loss of Gross Profit sustained as a result of direct accidental physical
loss or accidental physical damage to property (including pipelines of) one or more of The Insured’s direct
customers Premises arising out of a peril which would have been Insured under Section I of this Policy of Insurance.
Provided that after the application of all other terms, conditions and provisions of the Policy of Insurance the liability
under this extension in respect of any one occurrence shall not exceed the Maximum indemnity periods under Section
II of this Policy of Insurance.
For the purposes of this Extension the term “customers“ means those companies, organisations or individuals as
named in The Schedule with whom The Insured has contracts or trading relationships for supply of goods or services.
B.2.14.3. Fabricators/Processors/Suppliers (as agreed in The Schedule)
This Section is extended to include the actual loss of Gross Profit sustained as a result of direct accidental physical
loss or accidental physical damage to property (including pipelines) of The Insured´s Fabricators or Processors or
Suppliers arising out of a peril, which would have been insured under Section I of this Policy of Insurance.
Provided that after the application of all other terms, conditions and provisions of policy the liability under this
extension in respect of any one occurrence shall not exceed the Maximum indemnity periods under Section II of this
Policy of Insurance but always subject to the Sum Insured stated in the Particular Conditions.
For the purposes of this Extension the term “Fabricators or Processors or Suppliers” means those companies,
organisations or individuals as named in The Schedule with whom The Insured has contracts or trading relationships
for supply of goods or services.
B.2.14.4. Interruption by Civil Authority
Insurers shall be liable for damage as covered hereunder by any peril insured against whilst access to location(s) of
property described in The Schedule is prohibited by civil authority but only when such order is given as a direct
result of a loss by a peril insured in the vicinity of the said location(s) max. within a radius of 1 km from such
locations subject to a Maximum indemnity period as specified in The Schedule.
B.2.14.5. Ingress – Egress
Insurers shall be liable for a damage as covered hereunder by any Peril insured against during the period of time
access to or egress from property described in B.2.1 of this Section is prevented as a direct result of loss by a peril
insured in the vicinity of the said location(s) subject to a Maximum indemnity period as specified in The Schedule.
39

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WHITEHILLS PUBLICATIONS PVT.

Standard Fire Policy

3. Long Term Policies

Pro-rata condition of Average will continue to apply as usual.

General Guidelines for Section II

3. Cover for Standing Charges only

STANDARD FIRE POLICY

(hereinafter called the Insuring Party) named in The Schedule hereto

(hereinafter called The Insurer or Company)

The Language of Communication under this Policy of Insurance shall be English

Policy issued at dated / / 200_

SIGNED for and on behalf of

Being the Issuing Office Duly Authorised By the Participating Insurers

A.1. DEFINITIONS APPLICABLE TO ALL SECTIONS

Premises means the location(s) of the Property Insured.

A.2. POLICY OUTLINE

A.3. GENERAL CONDITIONS (Applicable to All Sections)

A.3.1. Policy Interpretation, Rights and Obligations

A.3.1.2. Order of Precedence

A.3.1.3. Captions, Headings and Language

A.3.1.5. Designation of Property Clause

A.3.1.6. Information rights of The Insurer and Confidentiality Agreement

A.3.1.7. Sum Insured

A.3.1.9. Fraud and Forfeiture

A.3.1.10. Misdescription and Non-disclosure

A.3.1.11. Material Change

A.3.1.12. Reasonable precautions

A.3.1.13. Preventive Maintenance

A.3.1.14. Clarification Agreement

Consequently the following are excluded from this Agreement:

A.3.1.15. Protections-Fire Extinguishing Appliances

A.4.1. Political Risks Exclusion

A.4.2. Radioactive Contamination

(c) nuclear reaction, nuclear radiation or radioactive contamination

A.4.3. Act of default

A.4.5. Pollution and Contamination

damage caused to the insured property by pollution or contamination excluding

B.1. SECTION I - STANDARD FIRE POLICY

B.1.1. Property Insured

B.1.2. Insuring Clause

VI. Leakage from Automatic Sprinkler Installations

B.1.4. Excluded property

B.1.5.2. Basis of Settlement

B.1.5.3. Rights of The Insurer in case of a loss

B.1.5.7. Loss Payee

B.1.5.8. Reinstatement of policy limit

B.1.5.9. Disclaimer of Liability

B.1.6. Endorsements to Sections I

B.1.6.1. Fees of Architects, Engineers and Others

B.1.6.2. Debris Removal Costs (in excess of 1% of claim amount)

B.1.6.3. Deterioration of stocks in Cold storage

B.1.6.5. Spontaneous Combustion

B.1.6.6. Capital Additions / Newly acquired Property / Interest

Subject to the sublimit shown in The Schedule,

B.1.6.7. Inadvertent Omissions

Subject to the sublimit shown in The Schedule,

Subject to the specified percentage limit shown in The Schedule,

At each renewal date The Insured shall notify The Insurers:-

B.1.6.9. Floater Cover

B.1.6.10. Riot, Strike and Malicious Damage