Professional Indemnity / Machinery Breakdown Policy / Deterioration of Stock / Electronic Equipment

Professional Indemnity Policy
The cover granted under the policy provide indemnity for legal liability to third party arising out of errors and omissions or negligence in professional service rendered by the insured.
The following professionals can be insured-

1. Doctors
2. Medical Establishments
3. Engineers
4. Architects
5. Chartered Accountants
6. Lawyers

Exclusions-

1. Any criminal act or violation of any Act of Statute
2. Services rendered under the influence of intoxicants or narcotics
3. Performance by Dentists under general anesthesia or any procedures carried out under general anesthesia unless performed in a hospital.
4. Willful neglect or deliberate act
5. Third Party Public Liability
6. Pure financial loss due to loss of goodwill or loss of market

Cover-
Various types of machinery, plant and equipment (mechanical/electrical) can be insured. Any type of installed machinery with an option to insure/to cover only selected equipments. The following persons can be insured -
1- The owner of the machinery.
2- In case of any financier’s interest eg. Bank, IDBI etc. machinery can be insured in the joint names.
The sum insured should represent - Present day replacement value which includes
- Basic cost + customs duty
- Incidental cost

Covers the following risks -
Policy covers the insured machinery, plant and equipments while at work/idle, being dismantled or removed or re-erected, if performed in the same premises, damage to electrical machinery due to fire originating within itself.
It covers loss or damage due to faulty operation, adjustment, casting, vibration, entry of foreign objects, loosening of parts, self heating, centrifugal force, short circuit.

Basis of Indemnity
The sum insured representing the present replacement cost of the machinery.

Partial Loss
Full cost of parts plus the labour charges, to and fro freight, customs duty and charges for dismantling and re-erection. Excess applicable to the affected item is deducted from claim. Depreciation is applied for items with limited life.

Exclusions
1- Fire and allied perils
2- War and War like operations, Nuclear perils
3- Wilful act or gross negligence, existing defects, normal wear and tear and consequential loss
4- Loss or damage falling under manufacturer’s warranty

Usually this policy is issued to cold storages. There should be Machinery Breakdown Insurance for the machineries of concerned cold storage units.
This policy covers the risk of loss or damage to the perishable stock by deterioration or putrefaction due to -
1- Rise or fall in temperature resulting from breakdown of refrigeration plant and equipment at the premises.
2- Damage to the said plant and equipment by an incidental extraneous cause subject to the perils excluded.
3- Failure of electric supply

Basis of Indemnity
The insured is indemnified for damage caused to the stocks by deterioration, contamination or rotting due to an accidental damage to the plant resulting in a rise in temperature.

The total liability of the company under this policy shall be limited to the insured value or market value whichever is less. Provided always that -
1- The insured should possess an unqualified permission in writing of the competent Licensing Authority to the Cold Storage during the entire period of insurance.
2- The damaged stock should be stored at the refrigeration chambers specified in the policy
3- The Plant and Machinery used should be covered by Machinery Insurance.
4- The insured has to maintain daily stock book, Log books as per the format prescribed by company
5- Stock book & log book should be made available for the inspection of company representative

Appropriate deductions for
- Shrinkage and rottage
- Value of damaged stock by sale or survey
- Under insurance, if any
- Excess
- Recovery of rent, if any

Cover -
Electronic equipments such as Computers, Medical, Bio-Medical, Micro Processors, Audio-visual equipments etc.
The owner of the equipment. Interest of any financier may be protected by issuing a policy in the joint names can be insured.

Policy Cover -
Section 1. Material damage.
Section 2. External data Media.
Section 3. Increased cost of working.

Risk covered -
Unforeseen and sudden physical loss or damage from fire and allied perils breakdown, short circuiting etc.
Basis of Indemnity
➢ Section 1:
Partial loss:
Actual expenses incurred to restore it to its former state plus cost of dismantling, re-erection, ordinary freight, Duty (Depreciation only on parts with limited life).
Total loss:
Actual market value immediately before the loss plus ordinary freight, erection charges, Duty Excess, Salvage are deducted.
➢ Section 2:
Expenses incurred within 12 months and strictly necessary for restoring the data media to its pre-accident condition would alone be payable.
➢ Section 3:
1. Rental expenses incurred for substitute equipments on hourly basis.
2. Personal expenses.
3. Transportation charges.

Exclusions:
➢ Section 1:
Excess specified in policy, wear and tear, existing faults, loss/damage to exchangeable parts and consumables.
➢ Section 2:
Excess specified, intrinsic value, consequential loss, Programming error - data media
➢ Section 3:
Expenses due to: restrictions imposed by public authorities, nonavailability of funds.