Storage Insurance Claim Process
Scope of Cover and Documents required for Claims
The policy comprises of 2 Sections:
- Section I-Material Damage-covering physical loss, damage or destruction of the property insured by any cause, other than those specifically excluded in the policy.
- Section II-Third Party Liability-covering the legal liability falling on the insured contractor as a result of bodily injury or property damage belonging to a third party.
The policy covers all risk of physical loss or damage of insured property other than those specifically excluded, including:-
- Marine voyage for imports.
- Offloading / storage at port.
- Inland transit to site.
- Storage, handling, erection at site.
- Testing and commissioning at site.
The main exclusions are:-
- Loss or damage due to faulty design, defective material or casting, bad workmanship other than faults in erection. This exclusion is limited to the items immediately affected and does not apply to any consequential loss to correctly executed items.
- Cost necessary for rectification or correction of any error during erection unless resulting in physical loss or damage.
- Loss or damage due to gradual deterioration, atmospheric condition, rusting etc.
- Loss discovered only at the time of taking inventory.
- Loss arising out of penalty for delay, non-fulfillment of terms of contract.
Add on covers
- The policy can be extended to cover the following on payment of additional premium.
- Clearance and removal of debris.
- Damage to owner`s surrounding property.
- Maintenance visit / extended maintenance cover.
- Additional customs duty.
- Civil works.
- Express freight.
- Air freight.
- Deletion of duration clause under marine.
- This is a comprehensive policy covering all physical risks which a project is exposed to right from the warehouse of the supplier of equipments - whether imported or indigenous - to its erection, testing and commissioning at the site.
- In case the supplier has arranged transit insurance up to the site, Storage cum erection policy can be issued limiting coverage to risks that the project is exposed to at the site only.
- In case the policy period exceeds 12 months, the premium can be paid in quarterly installments with the first installment being more by 5% and the last installment being paid 6 months before expiry of the policy. The policy can be taken by the principal, contractor or sub contractor, jointly or separately.
How to select the sum insured?
- The sum insured selected under section I should not is less than the completely erected value of the property inclusive of estimated freights, customs duty, and erection cost etc.
- In case of long term contracts, there is bound to be escalation in prices i.e. prime cost. The basic policy will pay only as per the original cost and prices. However escalation clause can be opted for, under which escalation up to 50%, can be selected to take care of such increase in prices during the policy period.
- The sum insured shall be adjustable on completion of the erection, on the basis of actual values incurred by the insured in respect of freights, handling charges, customs dues, cost of erection etc. and premium adjusted accordingly.
- The sum insured under section II should represent per accident limit (the maximum legal liability that may fall on the insured as a result of an accident in the insured`s site). The limit per policy period should be fixed taking into account the maximum number of such accidents which can reasonably be expected to occur.
Period of Insurance
- The period of insurance should not be less than the period of contract and should commence from the date of unloading of the first consignment at the site of the erection and shall continue up to the conclusion of the first test operation or test loading subject to a maximum of 4weeks from the date trial running is made and / or readiness for work is declared by the erectors. If a part of the plant or one or several machines are tested and put into the operation, the coverage under the policy for that particular part of the plant or machine will cease, whereas the coverage will continue for the remaining parts which are not yet ready.
- In case approval of the plant or any part thereof is not given by the concerned authorities even after expiry of 4weeks of trial running, the policy can be extended and the extra premium to be arranged beforehand.
Documents required for Inland Dispatches:
- Intimation to Insurance Company
- Originals or copies of the Supply Invoice and Packing/Weight specification.
- Copy of Carriers Receipt.
- In case of Non Delivery or Damage/Shortage the Carriers Certificate for the same.
- Photographs of damaged articles.
- Copies of Notices of Claim against the Carrier and other Third Party together with postal registration receipts and receipted A/D card and copies of all correspondences exchanged with them. The following procedure to be followed:
- For Transportation by Railways: The Claim should be lodged on The General Manager/ Chief Commercial Superintendent of the Railway Administration on which the booking and destination stations lie within 6 months from the date of Booking in terms of Sec.78B and 140 of the Indian Railways (Amendment) Act 1961.
- For Transportation by Inland vessels or Road Carriers (booking and destination offices) within 6 months from the date of booking in terms of Sec10 of the Carriers Act 1865.
- For Transportation by Air, the concerned Air carriers within 7 days from the date of delivery of goods at the destination or in non delivery within 14 days from the date of booking in terms of Rule26(2) Chapter III of the Indian Carriage of Air Act.
- For Postal Bookings the Postal Authorities within 6 months from the date of booking. For Theft or Pilferage Claims- the Insured or the contractor should produce the details for the items that have been lost. In case of bulk goods the weighting slip at the point of loading and the weighting slip at the point of delivery should be submitted. Also the Carrier Receipt must be duly caused as to shortage.
- Claim Bill.
Documents required for Ocean Shipments:
- Original copy of Shipping Invoice together with shipping specifications and weight notes.
- Original Bill of Lading and / other contract carriage.
- Survey report done by the Insured at the port of landing together with photographs of damage or other documentary evidence to show the extent of damages.
- Lading Account and Weight notes, Remarks list at final destination.
- In case of General Average/Salvage Loss, loss certificate from the Captain of the ship detailing the details for General Average/Salvage loss.
- Copies of correspondences exchanged with the Carriers and other parties regarding their liability for the loss of or damage.
- In case of Total Loss at the port of transshipment a certificate from the Carriers/Bailers as to the happening of the event.
- In case of Delivery by containers if the Container is Delivered damaged or with seals broken or seals missing as mentioned in the shipping documents, to clause the delivery receipt and retail all defective seals or irregular seals for subsequent identification. Also it is better to conduct a Survey at Insured’s cost with photographs of the damages.
- In case of damage at Port then a claim must be made on the port authorities before delivery a copy of which should be submitted to the Insurance Company.
- Claim Bill
Documents required for Duty Insurance Claims:
- The Insured should prove that he is the holder or assignee of the Import license or is the actual user who has purchased the goods from recognized Export House/ Channeling Agency.
- Certificate from the Captain of the Ship for Total Loss of whole or part of the cargo.
- Certificate from the Captain of the Ship where the loss is on account of General Average/ Salvage claims.
- To lodge Protest with the Port authorities and to Protest on the Bill of lading before taking delivery. Clean Receipt of delivery should not be given to the carrier.
- To Lodge a claim on the Carrier for loss of goods whether total or partial.
- To submit Letter of Indemnity for claims that is recoverable.
Documents required for material Damage claims and Contractors Plant and Machinery for Fire Claims:
- Completed Claim Form.
- Estimate of Loss.
- Fire Brigade Report.
- Damaged area Plan Copy/Plant Plan Copy.
- In case of Flood Claims- Meteorological Report.
- Approved Plan Copy of Municipal Authorities.
- In case of Implosion/Explosion report from Inspector of Boilers.
- In case of falling of Foreign Objects/Aircraft Damage FIR for local Police Station.
- In case of terrorist attacks FIR from Local Police Station.
- In case of Riot and Strike FIR from Local Police Station.
For Burglary Claims:
- Immediately report to the police and obtain a non-traceable certificate that the items are not found.
- The insurers will insist upon a letter of undertaking on a stamp paper of appropriate value - letter of Subrogation, for refunding the claim amount when the stolen property is recovered.
- Obtain a final report from Police.
- Insured has to provide the surveyor complete book of accounts and bills substantiating the loss on the day of incidence to know the value of property stolen.
- Photographs of the Damage to the premises and damages to lockers etc. to be submitted.
- Details of personnel who have been on security duty.
- Details of surveillance equipment installed.
- Statement of witnesses for the loss of materials.
Documents required for claims of Insured Surrounding property:
- Estimate of loss.
- If property can be repaired then cost of repairs.
- If total loss then the cost of damage.
- If the loss occurs on existing civil construction then the cost of renovation/repairs.
Documents required for third party Claims:
- Copy of FIR from Police authorities.
- In cases of death, Postmortem Certificate, Inquest report and Final Investigation report from Police authorities.
- To provide information whether such person has been in the premises with the permission of the Insured.
- In case of disability the Certificate from Government Medical practitioner.
- In case of injury the details of treatment provided along with the necessary medical reports.
- In case of death or injury to persons outside the premises of the insured then the distance as to which the loss occurred.
- Details of interim compensation if any paid.
Documents Required for Third party Property Claims:
- Copy of FIR lodged with the Police authorities.
- Detailed description of the damages to property and the distance from the Insured premises together with estimated cost of repairs.
- Details of other Insurances available with the Third party who is making claim for damages.
- Photographs of the damage to such property.
- Final Investigation report from the Police authorities.
In the event of Claims being repudiated by the Insurance Company the following options are available as a recourse:
- Make a representation to the Insurance Company/TPA.
- If no reply is received within 15 days on making such representation make a representation to the Grievance Cell of the Insurance Company.
- If No Reply is received or if the reply is not satisfactory then make a representation to the Insurance Ombudsman who has Quasi Judicial powers to hear the case and make adjudication.
- If still not satisfied the next option is to go to court.