ALL INDIA TARIFF

FOR

LOSS OF PROFITS INSURANCE

(following Machinery Breakdown)

&

LOSS OF PROFITS INSURANCE

(following Boiler Explosion)

TARIFF ADVISORY COMMITTEE

ADOR HOUSE,
6, K. DUBASH MARG
MUMBAI

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THE TARIFF ADVISORY COMMITTEE (HEREINAFTER
CALLED THE COMMITTEE) HAS LAID DOWN RULES,
REGULATIONS, ADVANTAGES, TERMS AND
CONDITIONS, AS CONTAINED HEREIN, FOR
TRANSACTION OF MACHINERY LOSS OF PROFITS
INSURANCE BUSINESS IN INDIA IN ACCORDANCE WITH
THE PROVISIONS OF PART II B OF THE INSURANCE ACT,
1938.

ANY BREACH OF TARIFF SHALL BE DEALT WITH AS PER THE

RELEVANT PROVISIONS OF THE INSURANCE ACT, 1938.

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 LOSS OF PROFITS INSURANCE

(FOLLOWING MACHINERY BREAKDOWN AND/OR BOILER EXPLOSION)

INDEX

Contents Page

1. GENERAL RULES & REGULATIONS- 1-3

2. SCHEDULE & STANDARD POLICY FORM – 4-14

3. PROPOSAL FOR
MACHINERY LOSS OF PROFIT INSURANCE - 15-21

4. ENDORSEMENTS - 22

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 MACHINERY LOSS OF PROFIT INSURANCE (MLOP) POLICY (OUTPUT BASIS)

Whereas the Insured named in the Schedule hereto has made to the …………………
CO. Ltd. (hereinafter called ‘the Company’) a written proposal by completing a
Proposal cum Questionnaire, which together with any other statements made in
writing by the Insured for the purpose of this Policy is deemed to be incorporated
herein.

Now this Policy witnesses that in consideration of the Insured having paid to the
Company the premium mentioned in the Schedule and also subject to the Terms,
Exclusions, Provisions, Definitions and Conditions contained herein or endorsed
hereon.

The Company hereby agrees with the Insured that if at any time during the period of
insurance stated in the Schedule, the business carried on by the Insured at the
premises specified in the Schedule be interrupted or interfered with in consequence
of an Accident which shall mean sudden and unforeseen physical damage, as
defined in the Machinery Insurance/Boiler and Pressure Plant Insurance Policy of any
machinery specified in the schedule of machinery then the Company shall in respect
of each item in the Schedule indemnify the Insured against the amount of loss as
hereinafter defined resulting from such interruption or interference.

PROVIDED THAT the liability of the Company during any one-year of Insurance shall in
no case exceed in the whole the total Sum Insured hereby or such other sum or sums
as may hereafter be substituted therefore by endorsement signed by or on behalf of
the Company.

PROVIDED ALSO that at the time of happening of an Accident there shall be in force
an insurance covering the machinery described in the Schedule from any accidental
cause indemnifiable under the Standard Machinery Insurance Policy and or Boiler &
Pressure Plant Insurance Policy and in respect of which liability shall have been
admitted or would have been admitted but for the operation of any Excess there
under.

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 PROVIDED ALWAYS that the due observance and fulfillment of the terms of 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 answer(s) in the proposal shall be conditions
precedent to any liability of the Company.

EXCLUSIONS -

The Company shall not be liable for any loss resulting from interruption of or
interference with the business directly or indirectly attributable to any of the following
causes --
i) Willful act or willful neglect or gross negligence of the insured or his responsible
representatives.

ii) Loss or damage to machinery or other items which are not listed in the list of
machinery insured even if the consequence of material damage to an item
indicated in the list of machinery insured is involved.

iii) Loss or damage caused by any faults or defects existing at the time of
commencement of this insurance within the knowledge of the insured or his
responsible representatives whether such faults or defects were known to the
Company or not.

iv) Shortage, destruction, deterioration and spoilage of or damage to raw materials,

semi finished or finished products or catalyst or operating media (such as fuel,
lubricating oil, refrigerant, heating media and the like) even if the consequence
of material damage to an item indicated in the list of machinery insured is
involved.

v) Any restrictions on reconstruction or operation imposed by any public authority.

vi) An extension of the normal repair period for more than 4 weeks on account of -

a) the inability to secure or delays in securing replacement parts, machines or

technical services.

b) the inability to carry or delays in carrying out repairs.

c) the prohibition to operate the machinery due to import and/or export customs
& other restrictions or by statutory regulations.

d) transport of parts to and from the Insured’s premises.

vii) Alterations improvements or overhauls being made while repairs or replacements

of damaged or destroyed property are being carried out.

viii)Loss damage and/or liability caused by or arising from or in consequence

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 directly or indirectly of -

a) 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 a
group of malicious person or persons acting on behalf of or in connection with
any political organisation, requisition or destruction or damage by order of any
government de jure or de facto or by any public. Municipal or Local Authority,
an act of terrorism or the action of any lawfully constituted authority in
suppressing or attempting to suppress or minimise the consequences thereof.

b) Nuclear reaction, nuclear radiation or radioactive contamination.

CONDITIONS -

a) This Policy and the Schedule(s) shall be read together as one contract and any
word or expression to which a specific meaning has been attached in any part of
this Policy or of the Schedule(s) shall bear such meaning wherever it may appear.

b) This Policy shall be avoidable in the event of misrepresentation, mis-description or

nondisclosure in material particular.

c) This Policy shall be avoided if,

i) the business be wound up or carried on by a liquidator or receiver or

permanently discontinued OR

ii) the insured’s interest ceases otherwise than by death OR

iii) any alteration be made whereby the risk of an accident is increased

OR
iv) the retention of standby or spare machinery or any other loss minimising factors
in existence when this insurance was effected be reduced or discontinued
unless its continuance is admitted by an endorsement signed by or on behalf
of the Company

d) The insured shall at his own expense take all reasonable precautions and comply
with all reasonable recommendations of the Company to prevent loss or damage
and comply with statutory requirements and manufacturers’ recommendations.

e) i) Representatives of the Company shall at any reasonable time have the right to
inspect and examine the risk and the Insured shall provide the representatives of
the Company with all details and information necessary for the assessment of the
risk.

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 ii) The Insured shall immediately notify the Company in writing of any material
change in the risk and cause at his own expense, such additional precautions
to be taken as circumstances may require and the scope of cover and/or
premium shall if necessary be adjusted accordingly.

iii) Dismantling and reassembling in connection with any examinations shall be

carried out by the Insured on such date or dates as the Company and the
insured mutually agree upon for the making of such examinations.

No material alteration shall be made or admitted by the insured whereby the risk
is increased, unless the continuance of the cover provided under this Policy is
confirmed in writing by the Company.

f) The Insured shall be obliged to keep complete records. All records e.g. inventories,
production and balance sheets for the three preceding years shall be held in safe
keeping or as a precaution against their being simultaneously destroyed the
insured shall keep separate sets of such records.

g) In the event of any occurrence, which gives rise to or is likely to give rise to a claim
under this Policy the Insured shall -

i) Forthwith give notice thereof to the Company

ii) do and concur in doing and permit to be done all such things as may be
reasonably practicable to minimize or establish the extent of any interruption
of or interference with the business or to avoid or diminish the loss resulting
therefrom.

iii) as far as may be reasonably practicable without causing any increase in the
period of interruption or interference take precautions to preserve any things
which might prove necessary or useful by way of evidence in connection with
any claim

iv) discontinue the use of any damaged machinery unless the Company
authorize otherwise and the Company shall not be liable in respect of any
further interruption or interference arising out of the continued use of any
damaged machinery without their having given their consent to such use until
said machinery has been repaired to the satisfaction of the insurers

v) in the event of a claim being made under this Policy not later than thirty days
after the expiry of the indemnity period or within such further time as the
Company may allow in writing at his own expense deliver to the Company a
written statement setting forth particulars of his claim together with details of
all other policies covering the accident or any part of it or consequential loss
of any kind resulting therefrom and the insured shall at his own expense also
produce and furnish to the Company such books of accounts and other
business books e.g. invoices, balance sheets and other documents, proofs,
information, explanation and other evidence as may reasonably be required
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 by the Company 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.

No claim under this Policy shall be payable unless the terms of this condition
have been complied with and in the event of non-compliance therewith in
any respect any payment already made on account of the claims shall be
repaid to the Company forthwith.

h) In the event of an accident to any insured machinery likely to give rise to a claim
under this Policy, the Company shall have the right to take over and control all
necessary repairs or replacements.

i) 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 or remedies or
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 are or become
necessary or required before or after his indemnification by the Company

j) If the claim be in any respect fraudulent or if any false declaration be 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
the Accident be occasioned by the willful act or with the connivance of the
insured or if the claim be made and rejected and an action or suit be not
commenced within three months after such rejection or in case of an arbitration
taking place as provided hereunder within three months of this policy after the
Arbitrator or Arbitrators or Umpire shall have made their award, all benefit under
this Policy shall be forfeited.

k) If at the time of any accident resulting in a loss under this Policy there be any other
insurance covering the same loss or damage, the Company shall not be liable to
pay more than its rateable proportion of the loss.

l) This insurance may be terminated at the request of the insured in which case the
Company will retain 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 on 7 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 cancellation less any
reasonable inspection charges the Company may have incurred.

m) Midterm increase in Sum Insured -

‘If the sum insured is increased during the currency of the policy -

i) Short period scale of rate shall apply to the increased amount.

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 ii) If the policy is renewed thereafter for twelve months, for an amount not less
than the increased total sum insured, the difference of premium between the
short period scale of rates and pro-rata rate, may be refunded, or a new policy
for the full increased sum insured, may be issued, at the tariff rate (annual or
short period, as required) canceling the old insurance and allowing a pro-rata
refund for the unexpired period of the cancelled policy’.

n) Departmental Clause - Applicable when business has separate sections

or departments, each earning a different rate of gross profit.)

If the business be conducted in departments, the independent trading results of

which are ascertainable, the provision of clauses (a) & (b) of item 1 of the
specification shall apply separately to each department affected by the
damage; provided that if the sum insured by the said item be less than the
aggregate of the sum produced by applying the rate of gross profit provided for
each department of the business (whether affected by the accident or not) to
the relative annual output thereof, the amount payable shall be proportionately
reduced.

o) 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 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 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.

p) In no case whatever shall the Company be liable in respect of any claim under
this Policy after the expiry of -

i) One year from the end of the indemnity period or if later

ii) Three months from the date on which payment shall have been made or
liability admitted by the Company covering the Accident giving rise to the said
claim unless the claim is the subject of pending action or Arbitration

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 q) Every notice and other communication required by these conditions must be
written or printed.

*****

SCHEDULE

Particular Function Relative Country of Is it under Are you Did the What spare parts or
s of (i.e. Nature Importance manufacture Manufacturer’s aware of Machinery suffer standby do you hold
Machine of work (See Note Name of guarantee? defects in any damage or for the machinery
or Vessel performed) (d)) manufacturer If so, upto what the breakdown in the (See note (b)
(Refer (See Note (c )) date? machiner last three years. If Imported/indigenous
Note (a)) y (If so, so, state the )
please nature of
state breakdown, time
details) taken for repairs
and who carried
out the repairs?

(1) (2) (3) (4) (5) (6) (7)

(8)
SCHEDULE ‘A’ (Machinery insured under Machinery Insurance Policy)

SCHEDULE ‘B’ (Boilers and Pressure Plant Insurance Policy)

Notes: (a) The Particulars of the machine should be as informative as possible including description, year of
manufacture, type, performance, speed, number
of cylinders, transmission ratio of the gearings, voltage, pressure, temperature, heating surface
Auxiliary equipment such as gearings driving units
and switchgear etc. should be listed separately.

(b) Spare machines should be marked and their sphere of utility indicated.

(c) Any machine of foreign manufacture should be noted, unless their importance from the point of view
of production is negligible.

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 (d) Relative importance is the maximum percentage effect which a breakdown of a particular machine
will have on the total gross profit disregarding any loss minimization measures.

(e) In the event of a breakdown state whether production can be maintained and to what extent by:

(i) Additional load on other machines.

(ii) Working in other premises.
(iii) Use of hired machinery.

(f) State whether the machine is prototype or of latest design. Date of last inspection and any defects
noted should be mentioned. Also state whether any special operating media is used.

*****

MACHINERY LOSS OF PROFITS INSURANCE

GENERAL REGULATIONS:-

1. The Insurers should not quote a rate lower than Rs.1.40 even provisionally when
they underwrite new proposals in respect of Fertilizer risks.

2. Policies are normally issued on turnover basis.The policies can be issued on `output'
basis for loss of profits cover following machinery breakdown and/or boiler
explosion only to manufacturers having single end products. For manufacturers
having multiple end products individual proposals must be submitted to Tariff
Advisory Committee for approval before granting LOP cover on `output' basis.

3. Insurers can extend MLOP Cover on DG Sets subject to adequate re-insurance

support .

4. With regard to the issuance of MB (LOP) policies in the first year of operation such
proposals will be considered by the Committee on case to case basis and the
rates will be decided by the Committee.

5. RULES FOR CANCELLATION -

For cancellation of insurance during the currency either wholly or in part

a) At the option of the Insurer, a pro-rata refund of premium may be allowed for the
unexpired term on demand.

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 b) At the Insured’s request, refund of premium may be allowed after charging
premium for the time insurance was in force on short period scale as defined in
the All India Fire Tariff subject to the retention of minimum premium by the Insurer.

However, if, policy is replaced by new annual one, covering identical

equipment/machines for Sum Insured not less than the respective Sums Insured under
the cancelled policy, refund of premium may be allowed on pro-rata basis subject to
retention of minimum premium.

If the risk is insured under short period scale, refund may be calculated at pro-rata of
the short period scale premium provided such cancellation is followed by an annual
policy for Sum Insured not less than the Sum Insured under cancelled policy.
Otherwise, retention of premium shall be on short period scale.

For the Sum Insured not replaced in the renewed policy after cancellation, refund
must be calculated after charging premium on such sum for the time insurance was
in force on short period scale subject to retention of minimum premium by the Insurer.

For the policy issued or renewed for periods shorter than 12 months, the premium rate
shall be charged as per the short period scales prescribed under CPM Tariff. The short
period scale of rates under CPM Tariff shall also be followed in respect of cancellation
of policies during the currency of the policy by the Insured.

c) In case of revision of Tariff rates/excess, it is not permissible to cancel the policy

and allow a refund of premium whereby an Insured pays lower premium for an
insurance than is payable at the rates applicable at the commencement of the
policy.

6. INCREASE IN SUM INSURED -

If the Sum Insured is increased during the currency of the policy.

i) Short period scale of rates shall apply to increased amounts.

ii) If the policy is renewed thereafter for 12 months for an amount not less than the
increased Sum Insured, the difference of premium between short period scale of
rates and pro-rata rate may be refunded.

7. Minimum Time Exclusion under LOP Policies -

i) 14 days for Power Plants (both captive and public), Fertilizer Plants, Petroleum
Refineries, Petrochemical Plants, Explosive Mfg. Plant.

Insurers may accept 7 days ‘Time Excess’ for all MLOP proposals
for Fertilizer Risks with adequate Reinsurance support.

ii) 7 days for all other industries.

Note - The Time Exclusion for Boiler will follow the industry in which it is installed.

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 8. RATING

Rates under this tariff will be decided at Insurers discretion.

9. ROUNDING OFF RATES:

Premium rates shall not be rounded off in case of MLOP policies .

10. MLOP INSURANCE COVER FOR DG SETS

Insurers can extend MLOP cover on DG Sets subject to adequate

Reinsurance Support.

*****

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 SCHEDULE
(MACHINERY LOSS OF PROFITS INSURANCE)

POLICY No. ISSUED AT DATE

Name & address of Insured

The Business

The Premises

INVENTORY OF THE PROPERTY INSURED AGAINST

Loss of profits following Machinery Breakdown

Item Number Description of Machinery Relative

Importance in %

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 Note: Relative importance means the percentage effect which a breakdown of the
particular machine will have on the total gross profit disregarding any loss
minimisation measures.

Type of Concurrent Policy Policy No. Period Insurer

Machinery Insurance Policy

Boiler Insurance Policy

TOTAL SUM INSURED HEREBY Rs.

Period of Insurance From ……………… To…………….

Indemnity Period Time Exclusion

First Premium Renewal Premium Due

IN WITNESS WHEREOF the undersigned being duly authorised by the Direcors of the
Company and on behalf of the Company has/have hereunto set his/their hand on this
………….. day of ………… 200..

Examined ………….. For……………..Company Ltd.

Entered ……………. Duly Constituted Attorney

SPECIFICATION A – INSURANCE ON GROSS PROFIT ON OUTPUT BASIS

Item No. Sum Insured

On Gross Profit Rs. ……………..

The cover provided under this Policy shall be limited to loss of gross profit due to (a)
reduction in output and (b) increase in cost of working and the amount payable as
indemnity thereunder shall be

a) In respect of Reduction in output the sum produced by applying the rate of gross profit
to the amount by which the output during the indemnity period shall in consequence
of the damage fall short of the standard output.

b) In respect of Increase in Cost of Working ; the additional expenditure (subject to

provision of memos) necessarily and reasonably incurred for the sole purpose of
avoiding or diminishing the reduction in output which but for that expenditure would
have taken place during the indemnity period in consequence of the damage, but
not exceeding the sum produced by applying the rate of gross profit to the amount
of the reduction thereby avoided.

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Less any sum saved during the indemnity period in respect of such of the Insured standing
charges as may cease or be reduced in consequence of the damage.

Provided that if the sum insured by this item be less than the sum produced by applying
the date of gross profit to the annual output, the amount payable shall be
proportionately reduced.

DEFINITIONS -

1. GROSS PROFIT -

The sum produced by adding to the Net Profit the amount of the Insured standing
charges or if there be no Net Profit, the amount of the Insured Standing Charges less
such a proportion of any net trading loss as the amount of the Insured Standing
Charges bears to all the Standing Charges of the business.

2. NET PROFIT -

The Net Trading Profit (exclusive of all capital receipts and accretions and all outlay
properly chargeable to capital) resulting from the business of the Insured at the
Premises after due provision has been made for all Standing and Other Charges
including depreciation but before the deduction of any taxation chargeable on
profits.

3. OUTPUT -

The quantity of___ produced at the premises, measured in units of ___

4. INDEMNITY PERIOD AND TIME EXCESS -

The Period not exceeding the indemnity period limit stated in the list of machinery and
plant insured commencing with the occurrence of the accident during which the
results of the business are affected in consequence of such accident provided always
that the insurers are not liable for the amount equivalent to the rate of gross profit
applied to the standard output during the period of time excess (in terms of __ days)
stated in the policy.

5. RATE OF GROSS OUTPUT –

a) Rate of Gross Profit: To which such adjustments shall be

Rate of Gross Profit per unit earned made as may be necessary to
on the output during the financial provide for the trend of business and
year immediately before the date for variations in or special business
of damage. circumstances affecting the business
either before or after the damage or

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 b) Standard Output: which would have affected the
Output during that period in 12 business had damage not occurred
months immediately before the so that the figures thus adjusted shall
date of damage which correspond represent as nearly as may be
to indemnity period. reasonably practicable. The results
which but for the damage would
c) Annual Output: have been obtained during the
The output during 12 months relative period after the accident.
immediately before the date of
damage.

PROVISIONS -

1. MEMO 1 - BENEFITS FROM OTHER PREMISES –

If during the indemnity period goods are sold or services are rendered elsewhere than
at the premises for the benefit of the business either by the Insured or by others acting
on his behalf, the money paid or payable in respect of such sales or services shall be
taken into account in arriving at the turnover during the indemnity period.

2. MEMO 2 - RELATIVE IMPORTANCE –

The term relative importance referred to in the list of machinery and plant insured shall
be the percentage effect which a breakdown of a particular machine will have on
the total gross profit, disregarding any loss minimizing measures.

If in the event of an accident affecting an insured item of machinery, the percentage

of relative importance stated in the list of machinery and plant insured for this item is
lower than the actual percentage of relative importance subsequently arrived at for
the period of interruption, the Company shall only be liable to indemnify the
proportion which the percentage of relative importance stated in the list of
machinery and plant insured bears to the actual percentage.

3. MEMO 3 - RETURNS OF PREMIUM –

If the Insured declares at the latest twelve months after the expiry of any Policy year
that the gross profit earned during the accounting period of twelve months most
nearly 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
one half of the premium paid on such sum insured for such period of Insurance shall
be made in respect of the difference.

If any accident has occurred giving rise to a claim under this Policy, the amount of
such claim shall be added to the revised Gross Profit as certified by the insured’s
auditors before calculating the proportion of return of premium.

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 4. MEMO 4 - 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.

5. MEMO 5 – REINSTATEMENT OF SUM INSURED –

For the period following the occurrence of an accident up to the end of the Policy
period, the sum insured shall be reinstated by payment of an additional premium on
a pro-rata basis. Such additional premium shall be adjusted against the net claim
amount payable and such premium shall be calculated for that part of the sum
insured, which corresponds to the indemnity, paid. The agreed sum insured shall
remain unaltered.
*****

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 PROPOSAL FOR LOSS OF PROFITS INSURANCE
(Following Machinery Breakdown and/or Boiler Explosion)

a) Name and Address of Proposer ______________________________

b) Business Premises ______________________________

c) Nature of Trade or Business ______________________________

1. Do you wish to cover the risk of Loss of

Profits arising from -

a) Breakdown of Machinery in your

premises Yes No

If so, please complete schedule ‘A’

b) Explosion of Boiler and Pressure Plant in

your premises Yes No

If so, please complete schedule ‘B’

2. Is the plant and Machinery specified in

Schedule A & B insured against material Yes No
damage risk ie breakdown and/or
explosion?

If yes, please state -

a) Name of the Insurer ________________________________

b) Title of the Policy ________________________________
c) Policy Nos. ________________________________
d) Period(s) of Insurance From __________ To _____________

3. a) Are the lists of the Machinery in Schedule

A and B representing the whole or only a Whole Part
part of the Machinery in the premises?

b) Are all your Machineries subject to

periodical inspection? Yes No

If yes, state by whom and at what

intervals inspections are carried out. _________________________________
Supply details of your maintenance
Schedule.

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 4. Give description of the manufacturing __________________________________
process and utility supplies such as __________________________________
power, steam, air ,water etc. required for __________________________________
production. __________________________________

Please attach a process flow diagram

showing connected machinery and
indicate bottlenecks or buffer stocks if
any

Please attach separate line diagram for

utility supplies such as power, steam, air
and water showing interconnected
machinery.

5. In the event of stoppage of any of the

machines proposed for insurance -

a) Can machines, which remain in

operation, carry the load originally borne Yes No
by the machine, which has failed?

b) Are there any alternative means of

maintaining production by -

i) the work being done at other

premises ? Yes No

If yes, to what extent? __________________________________

ii) hiring temporarily suitable replace-

ment machine Yes No

iii) by any other means Yes No

6. Are any of the machines described in the

schedule A & B de-rated? Yes No

If yes please give details _________________________________

7. State repair facilities available in regard

to machinery specified in Schedule A & B

a) In your own premises _________________________________

b) Any other nearest place __________________________________

8. Which machines proposed under this

insurance are the machines for which _________________________________
the spare parts would need to be
imported?

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 9. State the estimated period of
interruption affecting resumption of __________________________________
normal production, on account of __________________________________
spoilage of materials in process following __________________________________
a breakdown or failure of utility supplies.

10. a) What are your normal working hours? a) _____ hrs. per day

b) __________ days per week.

c) ___________ days per year.

b) Can extra shifts be worked to make up

production loss? Yes No

11. a) Have you ever suffered Loss of Profit

following Machinery Breakdown and/or Yes No
Boiler Explosion?

b) If so give details of the cause, duration __________________________________

and loss suffered in each stoppage, __________________________________
during the last three years.

12. If the business is ‘Seasonal’ indicate the

period of high and low output or turnover __________________________________
and indicate the degree of fluctuation. __________________________________
State if there is a tendency of fluctuations
due to demands.

13. State what terms are required for Loss of

Profits insurance with regard to -

a) Indemnity period (max.12 months) __________________________________

Note - The Indemnity period should be

selected based on an estimate of the
Maximum time, which would be required
to resume normal production after a
serious accident.
Different periods can be selected for
different items.

b) Time Exclusion (Min.7 working days) 7 days 14 days

28 days

14. INSURED STANDING CHARGES - Please

indicate charges to be insured - delete
or supplement as appropriate -

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 a) Interest on Debentures Motor Upkeep
and Licenses:

b) Mortgages, Loans and Lighting, Heating

Power and Bank Overdrafts:

c) Water Charges

d) Directors' Fees and Office Expenses:

e) Remuneration

f) Rents and Rates

g) Salaries including State Insurance

Contribution

h) Taxes other than those chargeable on

Profits

i) Insurance Premiums

j) Contributions to Pension Fund

k) Telephone Rentals

l) Miscellaneous Charges (not travelling

expenses) exceeding 5% of the total
amount of the aforesaid Standing
Charges.

m) Traveling Expenses

n) Advertising Cost

o) Auditors’ and Legal Fees

p) Trade and Charitable Subscriptions

q) Repairs and renewals chargeable to

revenue account

r) Depreciations of Buildings/ Machinery

Plant and Motor Vehicles

15. State the Sum Insured on –

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 a) Gross Profit under the Loss of profits Policy Sum Insured – Indemnity
(The Gross Profit for the current financial Rs. ____ period -
year to be computed from the last _____ months
annual balance sheet being the Sum of
net profit and Standing Charges with
adjustment for upward or downward
trend of business for the period of
Insurance.)

b) On Wages (Alternative forms of cover

available)

i) _____ weeks wages to the extent of

_____ % of the total wage roll. OR Rs. ____

ii) Wages to the extent of ____ % of the

total wages for roll. OR Rs. ____

iii) Total wages for the first ____ weeks

followed by _____ % for the remainder Rs. ____
of the Indemnity Period

c) On Auditors/Accountants Fees - (cost

incurred in the preparation of claims.) Rs. ____

16. Are your books regularly audited? Yes No

a) If so, give name and address of your

Auditors.

b) When does your financial year end?

c) Date of commencement of Insurance? From ______ To _______

17. Are you insured or have you made a

proposal in respect of loss of Profit Yes No
following Machinery Breakdown and/or
Boiler Explosion?

If so, give name of the Company

concerned and state if renewal has __________________________________
been (a) declined (b) subjected to
increased rates or special conditions

18. Are you insured against Loss of profit

following Fire? Yes No
If so, please state -

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 a) Name of the Insurer

b) Sum Insured

c) Policy No.

I/WE HEREBY DECLARE AND WARRANT that the above statements are true
and complete and that I/We have withheld no information whatsoever
which is material for the acceptance of this proposal.

I/We agree that this declaration and the answers given above shall be
the basis of the contract between me/us and the Company shall be
deemed to be incorporated in such contract. And that if any untrue
statement be contained therein the said contract shall be absolutely null
and void. I/We undertake to exercise all reasonable and ordinary
precaution for the safety of the machinery and I/We agree to accept
the policy in the form issued by the Company subject to the terms
exceptions and conditions prescribed therein or endorsed on the policy.

Place ________________

Date________________
Signature

Notes –

If the space above is insufficient for any answer please continue on

separate sheet and attach hereto.

************
ENDORSEMENTS:

Time Excess Clause –

‘It is hereby declared and agreed that the Insured shall bear the amount of loss
as computed hereunder, of each and every admissible claim under the policy -

i) In respect of a policy insuring reduction in turnover, the amount equivalent to

the rates of Gross Profit applied to the Standard Turnover for _______ days (insert
no. of days excess opted).

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 ii) In respect of a policy insuring reduction in output, the amount equivalent to
the rate of Gross Profit applied to the Standard Output for ______ days (insert
no. of days excess opted).

First of all loss amount should be calculated and from this assessment of indemnity,
monetary value of the loss for the no. of days excess opted should be deducted’.

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