Key Issues in Project Insurance
There are several issues which need to be considered while negotiating insurance for large projects and are as follows:
Sum Insured should be adequately calculated and must include at least the contract value, contractors’ plant and machinery, principal’s existing property, projected cost of debris removal, temporary facilities, value added tax and a provision for inflation. To make sure that on site as well as offsite storage facilities are included in the policy. Free issue materials should also be included in case the principal transfers the risk to the contractor under the contract.
Limit for third party liability should be adequate and should clearly reflect the risks. This should be determined keeping in mind the value of the surrounding property and distance from the nearest third party property. In case of underground works, losses to the public utility infrastructure must be kept in mind.
In case the contractor has an annual CPM policy (contractors’ plant & equipment); the TPL at site extension must be endorsed to the policy. Further, the CPM policy must be insured at values equivalent to the replacement cost.
Whether incidental inland transit between offsite storage and project site has been insured.
The project plan must consider weather conditions and open trench works must be avoided during rainy or monsoon seasons. Sometimes, insurers put warranties to this effect.
Professional Indemnity insurance must address retroactive date clause and should reflect the risks and requirements of the architects, designers and engineers. In addition to the claims made or claims occurrence clauses, extended reporting clause must be thoroughly discussed with the insurer. Project specific PI cover is generally not preferred by the insurers and tends to be expensive; therefore annual cover should be sought.
Project Cargo should be insured on a warehouse to warehouse basis while negotiating the deal with the exporter. In the event, the main cargo policy expires at the port, the transit from the port to the warehouse is considered as tail-end risk and is not considered to be a preferred risk from the insurers point of view.
Components of Project Insurance
Components of Project Insurance
Project insurance for large construction risks requires risk treatment on an end-to-end basis. This starts with identification of risks followed by evaluation of various insurance alternatives available and culminates in taking out the suitable insurance covers with relevant and appropriate conditions and extensions.
A typical Contractors’ All Risks insurance or Erection All Risks Insurance covers material damage to the works or the machinery being erected and includes coverage for third party liability for bodily injury or property damage to the surrounding property. The policy can be extended to include consequential losses or losses due to delay in start up following loss or damage under material damage section. This cover is also called Advanced Loss of Profit. Contractors’ Plant and Equipment insurance pays for the loss or damage to the equipments at site which are owned by the contractors and are used as a tool for the construction work.
Professional Indemnity insurance covers errors and omissions and professional negligence on the part of architects, designers and engineers who may be held liable for losses due to bad design or incorrect professional advice. Inherent Defects insurance or Decennial Liability insurance generally protects the owners against losses due to the threat of imminent collapse of the structure and includes debris removal, costs related to remedial measures and legal expenses.
Project Cargo insurance is another area which requires expertise and skilled attention as such cargoes are generally bulky, extremely expensive and crucial to the works being undertaken. Any loss or damage to such cargo may result in the delay in project completion and further consequential losses. Workmen’s compensation insurance pays for the death or bodily injury to the personnel employed at site. Motor fleet for the construction work should not only have comprehensive insurance but should also pick up losses on road as well as off road.
Contractors Plant & Machinery
Contractors Plant & Machinery
Insurance provides cover to Contractors Plant and Machinery against unforeseen and sudden physical damage whether at work or rest, while being dismantled or in the course of such operations or while being shifted, re-erected while such items are at the erection site.
Contractors’ machinery is exposed to the following hazards
Overturning in rugged and unfamiliar terrain
Boom collapse of cranes due to lifting problems or mechanical failure
Exposure to the natural elements
Security
Insurance provides cover to Contractors Plant and Machinery against unforeseen and sudden physical damage whether at work or rest, while being dismantled or in the course of such operations or while being shifted, re-erected while such items are at the erection site.
Contractors’ machinery is exposed to the following hazards
Overturning in rugged and unfamiliar terrain
Boom collapse of cranes due to lifting problems or mechanical failure
Exposure to the natural elements
Security
Erection All Risks Insurance
Erection All Risks Insurance
EAR is the other branch of contract works insurance (EAR) which essentially covers all risks involved in the erection and installation of machinery, plant & equipments and steel structures of many different types. EAR insurance policy protects the project companies, suppliers, manufacturers of the machinery or plant or contractors who carry out the erection work or is responsible for it. A supply and erection contract typically requires the contractor to arrange insurance against physical damage from any cause to the items to be supplied and erected, both whilst in transit and after arrival at the erection site. The insurance usually includes the erection tools and tackle. Erection projects are usually exposed to the following perils:
EAR insurance cover can be extended to cover the following:
Removal of Debris
Surrounding property
Errors and Omissions
Loss minimization expenses
Professional Fees
Automatic Reinstatement of Sum Insured
Expediting Expenses
Escalation Prevention of Access
Offsite storage and fabrication
Removal to place of safety
Time Adjustment (72 Hours clause)
Waiver of subrogation
Non-vitiation clause
On Account Payment
Free issue materials
Extended Maintenance etc.
EAR insurance requires the following information
Technical specification of the relevant project, contract price and value of items
Experience and expertise of the erection firm
Flow chart of the production process and a lay out plan where necessary
Geological, hydrological and meteorological data as applicable
Supply and erection time schedule and detail of pre storage facilities with notes on security and fire prevention in storage and on
site
Availability of replacement parts or machines and extra costs associated therewith e.g. imported machinery
EAR is the other branch of contract works insurance (EAR) which essentially covers all risks involved in the erection and installation of machinery, plant & equipments and steel structures of many different types. EAR insurance policy protects the project companies, suppliers, manufacturers of the machinery or plant or contractors who carry out the erection work or is responsible for it. A supply and erection contract typically requires the contractor to arrange insurance against physical damage from any cause to the items to be supplied and erected, both whilst in transit and after arrival at the erection site. The insurance usually includes the erection tools and tackle. Erection projects are usually exposed to the following perils:
- Fire , lightning , explosion
- Earthquake
- Flood & Inundation
- Windstorm
- Subsidence or collapse
- Theft or burglary
- Faulty workmanship,
- Malicious acts
- Faults in erection
- Negligence, lack of skill, lack of experience
- Short circuiting, arcing, excess voltage
- Excess pressure or vacuum, destruction due to centrifugal force
- Any other unforeseen or sudden event such as collapse
EAR insurance cover can be extended to cover the following:
Removal of Debris
Surrounding property
Errors and Omissions
Loss minimization expenses
Professional Fees
Automatic Reinstatement of Sum Insured
Expediting Expenses
Escalation Prevention of Access
Offsite storage and fabrication
Removal to place of safety
Time Adjustment (72 Hours clause)
Waiver of subrogation
Non-vitiation clause
On Account Payment
Free issue materials
Extended Maintenance etc.
EAR insurance requires the following information
Technical specification of the relevant project, contract price and value of items
Experience and expertise of the erection firm
Flow chart of the production process and a lay out plan where necessary
Geological, hydrological and meteorological data as applicable
Supply and erection time schedule and detail of pre storage facilities with notes on security and fire prevention in storage and on
site
Availability of replacement parts or machines and extra costs associated therewith e.g. imported machinery
Contractors All Risks Insurance
Contractors All Risks Insurance
A major form of contract works insurance is designed to protect the interest of different parties involved in construction activity for all types of civil engineering construction works ranging from small buildings to massive dams as they are susceptible to damage by a variety of external and internal causes during the course of construction. In the Material Damage section of the CAR policy, cover is provided for physical loss or damage to the contract works, construction plant and equipment or machinery.
The CAR policy may be effected by the interested parties in the project but primarily by Principal or by the Contractor engaged for the work and generally includes all sub-contractors. The cover begins from the start except for items of Construction Plant and the like. These are generally only covered after they have been unloaded at the site. The cover terminates when the completed project is handed over or any completed part is taken over or put into service. In respect of Construction Plant and the like, cover terminates when removed from the site. CAR consists of two main types of work: building works and civil works.
Building Works
Building works involves the construction of dwellings, office blocks, universities, stadiums, hospitals and factories. Important features include:
Civil Works
Civil works involves the construction of roads, airports, railways, tunnels, bridges, viaducts, dams, pipelines and the like. This type of work generally being outdoors and thus exposed to the elements, usually attracts the most frequent and serious losses. In general terms the premium is determined on the basis of the following factors:
Exposure of site to the elements
Design features and building materials
Construction techniques
Measures provided to ensure safe execution of project
Insured's legal liability for compensation in respect of personal injury or property damage to third parties arising from the contract works is covered under Third Party Liability Insurance. The policy can be extended to cover
Removal of Debris
Architects, Engineers or Surveyors Fees
Expediting Expenses.
Surrounding property etc.
A maintenance period is usually incorporated in most CAR policies and it is normal for the policy to cover this period in addition to the period of construction. The maintenance cover is for loss or damage to the works occurring during the maintenance period stipulated in the provisions of the maintenance clauses in the contract relating to the works.
A major form of contract works insurance is designed to protect the interest of different parties involved in construction activity for all types of civil engineering construction works ranging from small buildings to massive dams as they are susceptible to damage by a variety of external and internal causes during the course of construction. In the Material Damage section of the CAR policy, cover is provided for physical loss or damage to the contract works, construction plant and equipment or machinery.
The CAR policy may be effected by the interested parties in the project but primarily by Principal or by the Contractor engaged for the work and generally includes all sub-contractors. The cover begins from the start except for items of Construction Plant and the like. These are generally only covered after they have been unloaded at the site. The cover terminates when the completed project is handed over or any completed part is taken over or put into service. In respect of Construction Plant and the like, cover terminates when removed from the site. CAR consists of two main types of work: building works and civil works.
Building Works
Building works involves the construction of dwellings, office blocks, universities, stadiums, hospitals and factories. Important features include:
- The location (Metropolitan/Country)
- Demolition
- Exposure to adjoining properties and proximity to roads and other structures
- Excavation depth and precautions taken to safeguard adjacent property
- Exposure to the public
- Use of cranes
- Type and method of construction
- Exposure to contractors/sub-contractors, their employees and all workers on site
Civil Works
Civil works involves the construction of roads, airports, railways, tunnels, bridges, viaducts, dams, pipelines and the like. This type of work generally being outdoors and thus exposed to the elements, usually attracts the most frequent and serious losses. In general terms the premium is determined on the basis of the following factors:
Exposure of site to the elements
Design features and building materials
Construction techniques
Measures provided to ensure safe execution of project
Insured's legal liability for compensation in respect of personal injury or property damage to third parties arising from the contract works is covered under Third Party Liability Insurance. The policy can be extended to cover
Removal of Debris
Architects, Engineers or Surveyors Fees
Expediting Expenses.
Surrounding property etc.
A maintenance period is usually incorporated in most CAR policies and it is normal for the policy to cover this period in addition to the period of construction. The maintenance cover is for loss or damage to the works occurring during the maintenance period stipulated in the provisions of the maintenance clauses in the contract relating to the works.
AIRPORT OWNERS AND OPERATORS LIABILITY
AIRPORT OWNERS AND OPERATORS LIABILITY INSURANCE POLICY (48FLY00001)
The Insurers hereby agree to the extent and in the manner hereinafter provided, to pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay or by final judgement be adjudged to pay up to but not exceeding the amounts specified in the Schedule, to any person or persons as damages
a) for bodily injury including death at any time resulting therefrom (hereinafter referred to as bodily injury) or
b) for loss of or damage to property of others (hereinafter referred to as property damage)
caused by accident occurring during the period mentioned in the Schedule and arising out of the hazards set forth in Sections 1, 2 and 3 below.
SECTION 1
Bodily injury or property damage
a) in or about the premises specified in the Schedule, as a direct result of the services granted by the Insured
b) elsewhere in the course of any work or of the performance of any duties carried out by the Insured or his employees in connection with the business or operations specified in the Schedule
caused by the fault or negligence of the Insured or any of his employees engaged in the Insured's business or by any defect in the Insured's premises, ways, works, machinery or plant used in the Insured's business.
THIS SECTION IS SUBJECT TO THE FOLLOWING EXCLUSIONS:
1. Loss of or damage to property owned, rented, leased or occupied by; whilst in the care, custody or control of; whilst being handled, serviced or maintained by the Insured or any servant of the Insured, but this exclusion shall be deemed not to apply to vehicles that are not the property of the Insured whilst on the premises specified in the Schedule.
2. Bodily injury or property damage caused by
a) any mechanically propelled vehicle which the Insured may cause or permit any other person to use on the road in such a manner as to render them responsible for insurance under any domestic or international law appertaining to road traffic, or where no such law exists, whilst such vehicle is on any public highway.
b) any Ships, Vessels, Craft or Aircraft owned, chartered, used or operated by or on account of the Insured, but this exclusion shall be deemed not to apply to aircraft owned by others which are on the ground and for which indemnity is otherwise granted under Section 2 of this Policy, whether such Section is insured hereunder or not.
3. Bodily injury or property damage arising out of any Airmeet, Air Race, or Air Show, nor any stand used for the accommodation of spectators in connection therewith, unless previously agreed by Insurers.
4. Bodily injury or property damage arising out of construction of, demolition of or alterations to Buildings, Runways, or Installations by the Insured or his contractors or sub-contractors (other than normal maintenance operations) unless previously agreed by Insurers.
5. Bodily injury or property damage arising out of any goods or products manufactured, constructed, altered, repaired, serviced, treated, sold, supplied, or distributed by the Insured or his employees after such goods or products have ceased to be in the possession or under the control of the Insured, but this exclusion shall be deemed not to apply to the supply, by the Insured, of food or drink at the premises specified in the Schedule.
SECTION 2
Loss of or damage to Aircraft or Aircraft equipment, not owned, rented or leased by the Insured, whilst on the ground in the care, custody or control of or whilst being serviced, handled or maintained by the Insured or any servant of the Insured.
THIS SECTION IS SUBJECT TO THE FOLLOWING EXCLUSIONS:
a) Loss of or damage to robes, wearing apparel, personal effects or merchandise of any description.
b) Loss of or damage to Aircraft or Aircraft equipment, hired or leased by or loaned to the Insured.
c) Loss of or damage to any Aircraft while in flight as defined.
SECTION 3
Bodily injury or property damage arising out of the possession, use, consumption or handling of any goods or products manufactured, constructed, altered, repaired, serviced, treated, sold, supplied or distributed by the Insured or his employees, but only in respect of such goods or products which form part of or are used in conjunction with aircraft, and then only after such goods or products have ceased to be in the possession or under the control of the Insured.
THIS SECTION IS SUBJECT TO THE FOLLOWING EXCLUSIONS:
(a) Damage to the property of the Insured or to property within his care, custody or control.
(b) The cost of repairing or replacing any defective goods or products manufactured, constructed, altered, repaired, serviced, treated, sold, supplied or distributed by the Insured or any defective part or parts thereof.
(c) Loss arising out of improper or inadequate performance, design or specification but this exclusion shall be deemed not to apply to bodily injury or property damage as insured hereby resulting therefrom.
(d) Loss of use of any Aircraft not actually lost or damaged in an accident giving rise to a claim hereunder.
EXCLUSIONS APPLICABLE TO ALL SECTIONS OF THIS POLICY
1. THIS POLICY DOES NOT COVER liability for bodily injury to any person, who at the time of sustaining such injury is engaged in the service of the Insured or acting on his behalf, or liability for which the Insured or his insurer may be held liable under any workmans compensation, unemployment compensation or disability benefits law or any similar law.
2. THIS POLICY DOES NOT COVER the cost of making good any faulty workmanship for which the Insured, his employees, contractors or subcontractors may be liable (but this limitation shall not exclude resulting damage arising out of such faulty workmanship).
3. THIS POLICY DOES NOT COVER liability assumed by the Insured by Agreement under any Contract unless such liability would have attached to the Insured even in the absence of such Agreement.
4. THIS POLICY DOES NOT COVER liability of the Insured directly or indirectly occasioned by, happening through or in consequence of War, invasions, act of foreign enemy, hostilities (whether War be declared or not), civil war, rebellion, revolution, insurrection or military or usurped power.
5. THIS POLICY DOES NOT COVER liability arising out of the operation of an airfield control tower unless previously agreed by Insurers.
6. Each section of this Policy excludes liability which is or would be covered under any other section of the Policy, whether such other section is insured hereunder or not.
7. This Policy is subject to the attached Nuclear Risks Exclusion Clause.
PAYMENT OF COSTS
In addition to the limits set out in the Schedule, Insurers will pay all legal and other costs incurred with their consent in the defence of any claim made against the Insured,
PROVIDED THAT
in the event of their requiring any claim to be contested
(a) If the claim be successfully resisted by the Insured the Insurers will pay all costs, charges and expenses incurred by the Insured in connection therewith up to but not exceeding the sum insured under this Policy.
(b) If a payment exceeding the sum insured has to be made to dispose of a claim, the liability of Insurers to pay any costs, charges and expenses in connection therewith shall be limited to such proportion of the said costs, charges and expenses as the sum insured by this Policy bears to the amount paid to dispose of the claim.
DEFINITIONS
1. ACCIDENT. The word "accident" shall be understood to mean an accident or series of accidents arising out of one event or occurrence.
2. FLIGHT. The term "in flight" means the time commencing with the actual take off run of the aircraft and continuing thereafter until it has completed its landing run.
GENERAL CONDITIONS:
1. Upon the happening of any accident likely to give rise to a claim under this Policy or upon the receipt by the Insured of notice of any claim or of any other subsequent proceedings, notice in writing with full particulars shall be given to Insurers as soon as possible after the same shall come to the knowledge of the Insured or the Insured's representative. Every letter, claim, writ, summons or process shall be forwarded to Insurers immediately on receipt by the Insured.
2. All notices as specified above shall be given by the Insured to the person(s) or firm named for the purpose in the Schedule.
3. If any claim under this Policy is also covered in whole or in part by any other insurance, the liability of Insurers shall be limited to their rateable proportion of such claim.
4. If the Insured shall make any claim knowing the same to be false or fraudulent as regards amount or otherwise, this Policy shall become void, and all claims hereunder shall be forfeited.
5. This Policy may be cancelled at any time at the written request of the Insured or may be cancelled by or on behalf of the Insurers provided 15 days notice in writing be given. (Where 15 days notice is contrary to the law or statute then the minimum period that is permitted shall be substituted therefor).
If the Policy shall be cancelled by the Insured the Insurers shall retain the earned premium hereon for the period that this Policy has been in force calculated in accordance with the basis in the Schedule, or the short rate proportion of the minimum premium, calculated in accordance with the customary scale whichever is the greater.
If the Policy shall be cancelled by Insurers they shall retain the earned premium hereon for the period that this Policy has been in force, calculated in accordance with the basis in the Schedule or pro rata of the minimum premium whichever is the greater. Notice of cancellation by the Insurers shall be effective even though the Insurers make no payment or tender of return premium.
6. It is a condition precedent to the right of the Insured to be indemnified under this Insurance that
(a) If after this Insurance has been effected, the risk is materially altered, such alterations must be notified in writing to the Insurers immediately.
(b) No liability shall be admitted and no admission, arrangement, offer, promise or payment shall be made by the Insured without the written consent of Insurers, who shall be entitled, if they so desire, to take over and conduct in the name of the Insured the defence of any claim or to prosecute in the name of the Insured for their own benefit any claim for indemnity or damages or otherwise against any third party, and shall have full discretion in the conduct of any negotiations or proceedings or the settlement of any claim, and the Insured shall give all such information and assistance as Insurers may require.
(c) The Insured shall and will at all times exercise reasonable care in seeing that the ways, implements, plant, machinery and appliances used in the Insured's business are substantial and sound and in proper order, and fit for the purpose for which they are used, and that all reasonable safeguards and precautions against accidents are provided and used.
(d) The Insured shall comply with all International and Government Regulations and Civil Instructions.
7. Notwithstanding the inclusion herein of more than one Insured, whether by endorsement or otherwise, the total liability of the Insurers in respect of any or all Insureds shall not exceed the limit(s) of liability stated in this Policy.
The Insurers hereby agree to the extent and in the manner hereinafter provided, to pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay or by final judgement be adjudged to pay up to but not exceeding the amounts specified in the Schedule, to any person or persons as damages
a) for bodily injury including death at any time resulting therefrom (hereinafter referred to as bodily injury) or
b) for loss of or damage to property of others (hereinafter referred to as property damage)
caused by accident occurring during the period mentioned in the Schedule and arising out of the hazards set forth in Sections 1, 2 and 3 below.
SECTION 1
Bodily injury or property damage
a) in or about the premises specified in the Schedule, as a direct result of the services granted by the Insured
b) elsewhere in the course of any work or of the performance of any duties carried out by the Insured or his employees in connection with the business or operations specified in the Schedule
caused by the fault or negligence of the Insured or any of his employees engaged in the Insured's business or by any defect in the Insured's premises, ways, works, machinery or plant used in the Insured's business.
THIS SECTION IS SUBJECT TO THE FOLLOWING EXCLUSIONS:
1. Loss of or damage to property owned, rented, leased or occupied by; whilst in the care, custody or control of; whilst being handled, serviced or maintained by the Insured or any servant of the Insured, but this exclusion shall be deemed not to apply to vehicles that are not the property of the Insured whilst on the premises specified in the Schedule.
2. Bodily injury or property damage caused by
a) any mechanically propelled vehicle which the Insured may cause or permit any other person to use on the road in such a manner as to render them responsible for insurance under any domestic or international law appertaining to road traffic, or where no such law exists, whilst such vehicle is on any public highway.
b) any Ships, Vessels, Craft or Aircraft owned, chartered, used or operated by or on account of the Insured, but this exclusion shall be deemed not to apply to aircraft owned by others which are on the ground and for which indemnity is otherwise granted under Section 2 of this Policy, whether such Section is insured hereunder or not.
3. Bodily injury or property damage arising out of any Airmeet, Air Race, or Air Show, nor any stand used for the accommodation of spectators in connection therewith, unless previously agreed by Insurers.
4. Bodily injury or property damage arising out of construction of, demolition of or alterations to Buildings, Runways, or Installations by the Insured or his contractors or sub-contractors (other than normal maintenance operations) unless previously agreed by Insurers.
5. Bodily injury or property damage arising out of any goods or products manufactured, constructed, altered, repaired, serviced, treated, sold, supplied, or distributed by the Insured or his employees after such goods or products have ceased to be in the possession or under the control of the Insured, but this exclusion shall be deemed not to apply to the supply, by the Insured, of food or drink at the premises specified in the Schedule.
SECTION 2
Loss of or damage to Aircraft or Aircraft equipment, not owned, rented or leased by the Insured, whilst on the ground in the care, custody or control of or whilst being serviced, handled or maintained by the Insured or any servant of the Insured.
THIS SECTION IS SUBJECT TO THE FOLLOWING EXCLUSIONS:
a) Loss of or damage to robes, wearing apparel, personal effects or merchandise of any description.
b) Loss of or damage to Aircraft or Aircraft equipment, hired or leased by or loaned to the Insured.
c) Loss of or damage to any Aircraft while in flight as defined.
SECTION 3
Bodily injury or property damage arising out of the possession, use, consumption or handling of any goods or products manufactured, constructed, altered, repaired, serviced, treated, sold, supplied or distributed by the Insured or his employees, but only in respect of such goods or products which form part of or are used in conjunction with aircraft, and then only after such goods or products have ceased to be in the possession or under the control of the Insured.
THIS SECTION IS SUBJECT TO THE FOLLOWING EXCLUSIONS:
(a) Damage to the property of the Insured or to property within his care, custody or control.
(b) The cost of repairing or replacing any defective goods or products manufactured, constructed, altered, repaired, serviced, treated, sold, supplied or distributed by the Insured or any defective part or parts thereof.
(c) Loss arising out of improper or inadequate performance, design or specification but this exclusion shall be deemed not to apply to bodily injury or property damage as insured hereby resulting therefrom.
(d) Loss of use of any Aircraft not actually lost or damaged in an accident giving rise to a claim hereunder.
EXCLUSIONS APPLICABLE TO ALL SECTIONS OF THIS POLICY
1. THIS POLICY DOES NOT COVER liability for bodily injury to any person, who at the time of sustaining such injury is engaged in the service of the Insured or acting on his behalf, or liability for which the Insured or his insurer may be held liable under any workmans compensation, unemployment compensation or disability benefits law or any similar law.
2. THIS POLICY DOES NOT COVER the cost of making good any faulty workmanship for which the Insured, his employees, contractors or subcontractors may be liable (but this limitation shall not exclude resulting damage arising out of such faulty workmanship).
3. THIS POLICY DOES NOT COVER liability assumed by the Insured by Agreement under any Contract unless such liability would have attached to the Insured even in the absence of such Agreement.
4. THIS POLICY DOES NOT COVER liability of the Insured directly or indirectly occasioned by, happening through or in consequence of War, invasions, act of foreign enemy, hostilities (whether War be declared or not), civil war, rebellion, revolution, insurrection or military or usurped power.
5. THIS POLICY DOES NOT COVER liability arising out of the operation of an airfield control tower unless previously agreed by Insurers.
6. Each section of this Policy excludes liability which is or would be covered under any other section of the Policy, whether such other section is insured hereunder or not.
7. This Policy is subject to the attached Nuclear Risks Exclusion Clause.
PAYMENT OF COSTS
In addition to the limits set out in the Schedule, Insurers will pay all legal and other costs incurred with their consent in the defence of any claim made against the Insured,
PROVIDED THAT
in the event of their requiring any claim to be contested
(a) If the claim be successfully resisted by the Insured the Insurers will pay all costs, charges and expenses incurred by the Insured in connection therewith up to but not exceeding the sum insured under this Policy.
(b) If a payment exceeding the sum insured has to be made to dispose of a claim, the liability of Insurers to pay any costs, charges and expenses in connection therewith shall be limited to such proportion of the said costs, charges and expenses as the sum insured by this Policy bears to the amount paid to dispose of the claim.
DEFINITIONS
1. ACCIDENT. The word "accident" shall be understood to mean an accident or series of accidents arising out of one event or occurrence.
2. FLIGHT. The term "in flight" means the time commencing with the actual take off run of the aircraft and continuing thereafter until it has completed its landing run.
GENERAL CONDITIONS:
1. Upon the happening of any accident likely to give rise to a claim under this Policy or upon the receipt by the Insured of notice of any claim or of any other subsequent proceedings, notice in writing with full particulars shall be given to Insurers as soon as possible after the same shall come to the knowledge of the Insured or the Insured's representative. Every letter, claim, writ, summons or process shall be forwarded to Insurers immediately on receipt by the Insured.
2. All notices as specified above shall be given by the Insured to the person(s) or firm named for the purpose in the Schedule.
3. If any claim under this Policy is also covered in whole or in part by any other insurance, the liability of Insurers shall be limited to their rateable proportion of such claim.
4. If the Insured shall make any claim knowing the same to be false or fraudulent as regards amount or otherwise, this Policy shall become void, and all claims hereunder shall be forfeited.
5. This Policy may be cancelled at any time at the written request of the Insured or may be cancelled by or on behalf of the Insurers provided 15 days notice in writing be given. (Where 15 days notice is contrary to the law or statute then the minimum period that is permitted shall be substituted therefor).
If the Policy shall be cancelled by the Insured the Insurers shall retain the earned premium hereon for the period that this Policy has been in force calculated in accordance with the basis in the Schedule, or the short rate proportion of the minimum premium, calculated in accordance with the customary scale whichever is the greater.
If the Policy shall be cancelled by Insurers they shall retain the earned premium hereon for the period that this Policy has been in force, calculated in accordance with the basis in the Schedule or pro rata of the minimum premium whichever is the greater. Notice of cancellation by the Insurers shall be effective even though the Insurers make no payment or tender of return premium.
6. It is a condition precedent to the right of the Insured to be indemnified under this Insurance that
(a) If after this Insurance has been effected, the risk is materially altered, such alterations must be notified in writing to the Insurers immediately.
(b) No liability shall be admitted and no admission, arrangement, offer, promise or payment shall be made by the Insured without the written consent of Insurers, who shall be entitled, if they so desire, to take over and conduct in the name of the Insured the defence of any claim or to prosecute in the name of the Insured for their own benefit any claim for indemnity or damages or otherwise against any third party, and shall have full discretion in the conduct of any negotiations or proceedings or the settlement of any claim, and the Insured shall give all such information and assistance as Insurers may require.
(c) The Insured shall and will at all times exercise reasonable care in seeing that the ways, implements, plant, machinery and appliances used in the Insured's business are substantial and sound and in proper order, and fit for the purpose for which they are used, and that all reasonable safeguards and precautions against accidents are provided and used.
(d) The Insured shall comply with all International and Government Regulations and Civil Instructions.
7. Notwithstanding the inclusion herein of more than one Insured, whether by endorsement or otherwise, the total liability of the Insurers in respect of any or all Insureds shall not exceed the limit(s) of liability stated in this Policy.
Earthquake Coverage
Earthquake Coverage
Every offer of earthquake insurance must provide coverage for your dwelling, for your personal property (not less than $5,000 or 10% of the covered dwelling loss), and for any additional living expense (ALE) of at least $1,500. You may waive ALE coverage if you or your family do not occupy the dwelling you wish to insure. CIC Section 10089(b) states that the maximum deductible that can be charged is 15% of the policy dwelling limit. If you desire earthquake insurance offering more than the minimum limits and a deductible less than the maximum established by law, then you may contact your current residential property insurer or earthquake insurer to see if higher limits or lower deductibles are available. Stand-alone policies are offered by a few specialty insurance companies who do not require you to purchase your homeowners insurance from them in order to offer you earthquake coverage. They offer a stand-alone policy, which is referred to as a monoline policy (one line of insurance) by the insurance industry.
Every offer of earthquake insurance must provide coverage for your dwelling, for your personal property (not less than $5,000 or 10% of the covered dwelling loss), and for any additional living expense (ALE) of at least $1,500. You may waive ALE coverage if you or your family do not occupy the dwelling you wish to insure. CIC Section 10089(b) states that the maximum deductible that can be charged is 15% of the policy dwelling limit. If you desire earthquake insurance offering more than the minimum limits and a deductible less than the maximum established by law, then you may contact your current residential property insurer or earthquake insurer to see if higher limits or lower deductibles are available. Stand-alone policies are offered by a few specialty insurance companies who do not require you to purchase your homeowners insurance from them in order to offer you earthquake coverage. They offer a stand-alone policy, which is referred to as a monoline policy (one line of insurance) by the insurance industry.
ALE coverage is designed to pay for the cost associated with living somewhere
else while repairs are being made to your home. Typically your insurer will
cover increases in your normal living expenses to help you maintain the
standard of living you had before an earthquake damaged your home and personal
property. ALE coverage can include costs for the following:
Temporary rental home, apartment, or hotel room
Restaurant meals
Telephone or utility installation in a temporary residence
Relocation and storage
Furniture Rental
Laundry
ALE coverage can also pay costs you may incur due
to the police or other civil authority denying access to your home in the event
of an evacuation
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