Sum Insured

• Fire and related perils

• Overload experiments/tests/abnormal operating conditions

• Gradually developed flaws/defects not necessitating immediate stoppages

• Normal wear and tear

• Willful act/negligence

• Contractual liabilities Pre-existing defects

• Consequential losses

• Parts requiring regular replacements

• Loss for which manufacturer is responsible 
   
   

Basis of Indemnity / Settlement: 
 
- Partial loss 
 

• Full cost of parts, labour charges, freight, duty, dismantling and re-erection charges.  Depreciation applicable only on parts with limited life.

-Total loss

• Actual value immediately before the loss less salvage plus freight and cost of erection

To Elaborate further: 
 

In cases where damage to an insured item can be repaired the Insurance Company will pay expenses necessarily incurred to restore the damaged machine to its former state of service ability plus the cost of dismantling and re-erection incurred for the purpose of effecting the repairs as well as ordinary freight to and from a repair shop customs duties and dues if any to the extent such expenses have been included in the sum insured. 
 

If the repairs are executed at a workshop owned by the insured, the Insurance Company will pay the cost of materials and wages incurred for the purpose of the repairs plus a reasonable percentage to cover overhead charges.   No deduction shall be made for depreciation in respect of parts replaced except for wear and tear parts and parts for which manufacturers have specified a fixed life for use and the like but the value of any salvage will be taken into account.,   If the cost of repairs as detailed here-in above equal’s or exceeds the actual value of the machinery insured immediately before the occurrence of the damage the settlement before the occurrence of the damage the settlement shall be made on the basis provided for in (b) below : 
 

It is understood that the payment with regard to each type of expense such as erection cost, freight, Customs duty and other dues required to be made by the Insurance Company shall be in such proportion as the sum insured bears to the amount actually insured for each of the above item. 
 

In cases where an insured item is destroyed the Insurance Company will pay the actual value of the item immediately before the occurrence of the loss, including costs of ordinary freight erection and customs duties if any, provided such expenses have been included in the sum insured, such actual value to be calculated by deducting proper depreciation from the replacement value of the item.   The Insurance Company will also pay any normal charges for the dismantling of the machinery destroyed, but the salvage will be taken into account.   Any extra charges incurred for overtime night-work.   Work on public holidays, express freight, are covered by this insurance only if especially agreed too in writing. 
 

In the event of the makers drawings patterns and core boxes necessary for the execution of a repair not being available the company shall not be liable for the cost of making any such drawings, patterns and core boxes. 
 

The cost of any alternations, improvements or overhauls shall not be recoverable under this policy. 
 

The cost of any provisional repairs will be borne by the Insurance Company if such repairs constitute part of the final repairs and do not increase the total repair expenses. 
 

If the sum insured is less than the amount required to be insured as per provision herein above, the Insurance Company will pay only in such proportion as the sum insured bears to the amount required to be insured.    
 

The Insurance Company will make payments only after being satisfied, by production of the necessary bills and documents that the repairs have been effected or replacement have taken place as the case may be. 
 
 

Extension Available for: 
 

• Escalation upto 25% of sum insured
• Express freight, overtime and holiday rates of wages
• Air freight
• Owners surrounding property
• Third party liability
• Additional customs duty

Extension to the policy is Machinery Loss of Profit Insurance Policy dealt here under. The loss of profit due to break down is covered.