RAHEJA QBE GENERAL INSURANCE COMPANY LIMITED
MACHINERY BREAKDOWN INSURANCE POLICY
WHEREAS the Insured named in the schedule hereto by a proposal and declaration, which shall be
the basis of this contract and is deemed to be incorporated herein has applied to the Raheja QBE
General Insurance Company Limited (hereinafter called the company) for the Insurance hereinafter
contained and has paid the premium as consideration for such Insurance in respect of accident or
damage occurring during the period of Insurance stated in the schedule or during any subsequent
period for which the Insured pays and the Company may accept the premium for the renewal of the
Policy.
NOW THIS POLICY OF INSURANCE WITNESSETH that subject to the terms, exceptions,
exclusions, provisions and conditions contained herein or endorsed hereon, the company will at its
own option by payment or reinstatement or repair indemnify the Insured against unforeseen and
sudden physical damage by any-cause not hereinafter excluded to any insured property specified in
the attached schedule (s) whilst in the premises therein mentioned necessitating its immediate repair
or replacement. This Policy shall apply to the insured items after successful completion of their
performance/acceptance tests, whether they are at work or at rest, or being dismantled for the
purpose of cleaning or overhauling, or in the course of the aforesaid operations themselves, or when
being shifted within the premises, or during subsequent re-erection. The liability of the Company for
any one item of the Insured property shall not exceed in the aggregate in any one period of Insurance
the Sum Insured set against such item in the attached schedule(s), unless the Sum Insured under
such item is reinstated after occurrence of a claim for balance period.
1. GENERAL EXCEPTIONS
The company shall not be liable under this policy in respect of:
1.1. Loss, damage and/or liability caused by or arising from or in consequence, directly or
indirectly of fire including extinguishments of a fire or clearance of debris and dismantling
necessitated thereby, smoke, soot, aggressive substance, lightning explosion of any kind
(other than bursting or disruption of turbines, compressors, cylinders of steam engines,
hydraulic cylinders or flywheels or other apparatus subject to centrifugal force, internal
pressure) theft, collapse of building, subsidence, landslide, rockslide, water which escapes
from water containing apparatus, flood, inundation, storm, tempest, earthquake, volcanic
eruption or other Acts of God, impact of land borne or water borne or airborne craft or
aerial devices and/or articles dropped there from.
1.2. Any loss or damage by fire within the electrical appliances and installation insured by this
Policy arising from or occasioned by overrunning, excessive pressure, short circuiting,
RAHEJA QBE GENERAL INSURANCE COMPANY LIMITED
Windsor House, 5th Floor, CST Road Kalina, Santacruz (East), Mumbai - 400 098, India
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RAHEJA QBE GENERAL INSURANCE COMPANY LIMITED
arcing, self heating or leakage of electricity from whatever cause (lightning included) is
covered; provided that this extension shall apply only to the particular electrical machine;
apparatus fixtures fittings or portions of the electrical installation so affected and not to
other machines apparatus fixtures fittings or portions of the electrical equipment which
may be destroyed or damaged by fire so set up. Loss, damage and/or liability caused by or
arising from or in consequence, directly of:
1.2.1. War, invasion, Act of foreign enemy, Hostilities or war like operations (Whether
war be declared or not). Civil war, rebellion, revolution, Insurrection, Mutiny, Riot,
Strike, Lockout and Malicious Damage, Civil Commotion, Military or Usurped
Power, Martial Law, Conspiracy, Confiscation, Commandeering by a group of
malicious persons or persons acting on behalf of or in connection with any
political Organization, Requisition, or Destruction or damage by order of any
Government de jure or de facto or by any Public, Municipal or Local Authority.
1.2.2. Nuclear reaction, nuclear radiation or radioactive contamination.
1.3. Accident Loss/damage and/or liability resulting from overload experiments or tests
requiring imposition of abnormal conditions.
1.4. Gradually developing flaws, defects, cracks or partial fractures in any part not
necessitating immediate stoppage, although at some future time repair or renewal of the
parts affected may be necessary.
1.5. Deterioration of or wearing away or wearing out of any machine caused by or naturally
resulting from normal use or exposure.
1.6. Loss, damage and/ or liability caused by or arising out of the willful act or willful neglect or
gross negligence of the insured or his responsible representatives.
1.7. Liability assumed by the insured by agreement unless such liability would have attached to
the insured not withstanding such agreement.
1.8. Loss, damage and/or liability due to faults or defects existing in at the time of
commencement of this insurance and known to the Insured or his responsible
representatives but not disclosed to the Company.
1.9. Loss of use of the Insured’s plant or property or any other consequential loss incurred by
the Insured.
1.10. Loss, damage and /or liability due to explosion in chemical recovery Boilers, other than
pressure explosion for eg. Smelt, chemical, ignition, Explosion etc.
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2. SPECIAL EXCLUSIONS
The Company shall not be liable for: -
2.1. The Excess, as stated in the Schedule, to be first borne by the insured out of each and
every claim; where more than one item is damaged in one and the same occurrence, the
insured shall not, however, be called upon to bear more than the highest Excess
applicable to any one such item;
2.2. Loss of or damage to belts, ropes, chains, rubber tyres, dies, moulds, blades, cutters,
knives or exchangeable tools, engraved or impression cylinders or rolls; objects made of
glass, porcelain, ceramics, all operating media (e.g. lubricating oil, fuel, catalyst, refrigerant,
dowtherm) felts, endless conveyor belts or wires; sieves, fabrics, heat resisting and anti-
corrosive lining and parts of similar nature, packing material, parts not made of metal
(except insulating material) and non-metallic lining or coating of metal parts.
2.3. Loss or damage for which the manufacturer or supplier or repairer of the property is
responsible either by law or under contract;
In any action, suit or other proceeding where the Company alleges that by reason of the
exceptions or exclusions above, any loss, destruction, damage or liability is not covered by this
insurance, the burden of proving that such loss, destruction, damage or liability is covered shall
be upon the Insured.
3. PROVISIONS
3.1. SUM INSURED:
It is a requirement of this Insurance that the Sum Insured shall be equal to the cost of
replacement of the insured property by new property of the same kind and same capacity
which shall mean its replacement cost including freight and customs duties, if any, and
erection costs.
3.2. BASIS OF INDEMNITY:
3.2.1.In cases where damage to an insured item can be repaired, the Company will pay
expense necessarily incurred to restore the damaged machine to its former state of
serviceability 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
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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
1. Wear and tear parts and
2. 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 herein above equals or exceeds the actual value of
the machinery insured immediately before the occurrence of the damage the
settlement shall be made on the basis provided for in (b) below.
3.2.2.In cases where an insured item is destroyed the Company will pay the actual value
of the item immediately before the occurrence of the loss including costs for
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 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 to in writing.
In the event of the maker’s 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
alterations, improvements or overhauls shall not be recoverable under this Policy.
The cost of any provisional repairs will be borne by the 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 Provision1
herein above, the Company will pay only in such proportion as the Sum Insured
bears to the amount required to be insured. Every item if more than one shall be
subject to this condition separately.
The company will make payments only after being satisfied, with the necessary bills
and documents that the repairs have been affected or replacement have taken
place, as the case may be. The company may, however, not insist for the bills and
the documents in case of total loss where the insured is unable to replace the
damaged equipments for the reasons beyond their control. In such case claims can
be settled on indemnity Basis.
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3.3. INSPECTION OF TURBINES AND TURBO-GENERATORS
All Mechanical and Electrical parts of any steam turbine, gas turbine, water turbine or
generator up to 30,000 KW shall be inspected and overhauled thoroughly under the
supervision of Maker’s representatives or any competent agency in the field, in a
completely opened up state at least every 2 yrs: for turbine and generators exceeding
30,000Kw such inspection and overhaul shall take place after32,000 hours of operation or
every four years. The extensions for the interval between successive overhauls to 64,000
hrs / 8 years are as under.
PERIOD BETWEEN SUCCESSIVE TERMS AND CONDITIONS
OVERHAUL
Beyond 32000 hr/4years and upto Excess shall be 25% of claim amount subject to a
48000 hrs/6 years minimum of 150% of the normal excess
Beyond 48000hr/6years and upto Excess shall be 37.5% of claim amount subject to
56000 hrs/7 years a minimum of 200% of the normal excess
Beyond 56000 hr/7years and upto Excess shall be 50% of claim amount subject to a
64000 hrs/8 years minimum of 300% of the normal excess
Beyond 64000 hr/8years To be referred to Chief Underwriter
The cost of inspection and overhauling shall be borne by the Insured and a copy of the
Report issued by the Maker’s representative or competent agency on such inspection and
overhauling shall be furnished to the Company immediately after the work has been carried
out.
The Insured shall arrange for these regular inspections in such a way as to enable the
company’s representative to be present at the inspection at their own expenses. The
Company shall be notified at least seven days in advance of the commencement of any
overhauling necessary according to expert opinion.
If the insured fails to comply with the requirements of this condition, the Company shall be
free from all liability for loss or damage caused by any circumstances, whatsoever. The
insured may apply for an extension of the period between any two regular inspections, and
such extension shall be considered if in the opinion of the Company, the risk is not
aggravated thereby.
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3.4. CONDITIONS:
3.4.1.This Policy and the attached Schedule(s) 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 attached Schedule (s) shall bear the same meaning wherever
they may appear.
3.4.2.If a claim is in any respect fraudulent or if any false declaration is made or used in
support thereof or if any fraudulent means or devices are used by the insured or any
one acting on his behalf to obtain any benefit under this Policy or if a claim is made
and rejected and no action, or suit is commenced within three months after such
rejection or in case of arbitration taking place as provided herein within three months
after the arbitrator or arbitrators or umpire have made their awards, all benefit under
this Policy shall be forfeited.
3.4.3.No admission, offer, promise, payment or indemnity shall be made or given by or on
behalf of the Insured without the written consent of the Company who shall be entitled
if they so desire to take over and conduct in the name of the Insured the defence or
settlement of any claim for indemnity or damage or otherwise and shall have full
discretion in the conduct of any proceeding or in the settlement of any claim and the
Insured shall give such information and assistance as the Company may require.
3.4.4.The due observance and fulfillment of the terms, provisions and conditions of and
endorsement on this Policy in so far as they relate to anything to be done or complied
with by the Insured and the truth of the statements and answers in the said proposal
shall be conditions precedent to any liability of the Company to make any payment
under this Policy.
3.5. OBLIGATIONS OF THE INSURED:
3.5.1.The Insured shall take all reasonable steps to maintain the insured property in
efficient working order and to ensure that no item is habitually or intentionally over
loaded. The Insured shall fully observe the manufacturers instructions for operating,
inspection and overhaul, as well as government, statutory municipal and all other
binding regulations in force concerning the operation and maintenance of the insured
plant and machinery.
3.5.2.The Company’s Officials shall at all reasonable times have the right to inspect and
examine any property insured hereunder and the Insured shall provide the Officials of
the Company with all details and information necessary for the assessment of the risk.
The Company shall provide the Insured with a copy of the inspecting Official’s report;
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which shall however be treated as strictly confidential both by the Insured and the
Company.
3.5.3.In the event of any;
i) Material change in the original risk
ii) Alteration, modification or addition to an insured item
iii) Departure from prescribed operating conditions, whereby the risk of loss or
damage increases
iv) Changes in the Insured’s interest (such as discontinuation or liquidation of the
business or being placed in receivership) taking place,
common to all points
Policy shall be void unless its continuance be agreed by endorsement signed by the
Company
3.6. DUTIES FOLLOWING AN ACCIDENT:
3.6.1.In the event of any occurrence which might give rise to a claim under this Policy the
Insured shall; Immediately notify the Company by telephone or telegram as well as in
writing giving an indication as to the nature and extent of loss or damage;
3.6.2.Take all reasonable steps within his power to minimize the extent of the loss or
damage;
3.6.3.Preserve the damaged or defective parts and make them available for inspection by
an official or surveyor of the Company.
3.6.4.Furnish all such information and documentary evidence as the Company may require.
The Company shall not be liable for any loss or damage of which no notice and completed
claim form have been received by the Company within Fourteen days of its occurrence.
Upon notification of a claim being given to the Company the Insured may proceed with the
repair of any minor damage not exceeding Rs.2, 500/- provided that the carrying out of such
repair is without prejudice to any question of liability of the Company and that any damaged
part requiring replacement is kept for inspection by the Company, but in all other cases
representative of the Company shall have the opportunity of inspecting the damage before
any alterations, repairs or replacement are effected. Nothing contained herein shall prevent
the Insured from taking such steps as are absolutely necessary to maintain the operation of
the plant.
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The liability of the Company under this Policy in respect of any item of property sustaining
damage, for which indemnity is provided, shall cease if the said item is kept in operation
without being repaired to the satisfaction of the Company.
3.7. OTHER INSURANCE:
If at the time any claim arises under this Policy there is any other insurance covering the
same loss damage or liability, the Company shall not be liable to pay or contribute more
than its ratable proportion of such loss damage or liability.
3.8. POSITION AFTER A CLAIM:
a) The Insured shall not be entitled to abandon any property whether taken possession
of by the Company or not.
b) As from the day of the loss the Sum Insured for the remainder of the period of
Insurance is reduced by the amount of the compensation. To prevent under
insurance during the remainder of the current period of insurance the amount
insured must be reinstated. The premium will be calculated pro-rata from the day
repaired item is again put to work. For subsequent period of insurance the original
indemnity and premium are again in force unless circumstances justify an alteration
3.9. TRANSFER OF INTEREST:
The Insurance granted by this Policy shall cease to attach to any items described in the
Schedule the interest in which shall pass from the Insured otherwise than by will or
operation of law. Unless the consent of the Company for the continuance of the Insurance
shall be obtained and signified by endorsement hereon.
3.10. TERMINATION OF INSURANCE:
This insurance may be terminated at any time at the request of the insured, in which case
the Company will retain the premium calculated at the customary short period rate for the
time the Policy has been in force. This insurance may also at any time be terminated at the
option of the Company by 15 days notice to that effect being given to the insured, in which
case the Company shall be liable to repay on demand a ratable proportion of the premium
for the unexpired term from the date of the cancellation.
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3.11. RECOURSE:
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 required by the Company in
enforcing any right or remedies or of obtaining relief or indemnity from parties (other than
those insured under this Policy) to which the Company shall be or would become entitled or
subrogated upon their paying for or making good of any loss or damage under this policy,
whether such acts and things shall be or become necessary or required before or after the
Insured’s indemnification by the Company.
3.12. 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 in
difference, 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 herein before 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 that the award by such Arbitrator/ Arbitrators of the
amount of the loss or damage shall be first obtained:
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