Availability.
This type of policy is available to entities having a total insured
value of U.S $ 5,000,000 or more.
Applications.
The items that may be insured are similar to the Fire policy; i.e.,
buildings, fixed assets such as machinery, furniture, equipment
and others, and inventories. Specifically excluded are road vehicles
and other moving assets.
Fixed assets are insured at replacement cost as opposed to actual
cash value. Inventories are insured at book cost or sales price.
Valuation. Insured values are usually
denominated in US Dollars.
Coverages.
As opposed to a "Named Peril" type policy, which only
covers those occurrences specifically named, this one covers all
risks except those specifically excluded. Exclusions from cover
are quite numerous and detailed. The main exclusions are:
- War
- Gradual and natural deterioration
- Pollution and contamination
- Contraction, evaporation and chemical changes
- Effects of normal weather on outdoor equipment
- Electrical failures on the part of the utility company
- Confiscation of property by government authority
- Goods being transported outside company premises
- Cash, checks, credit cards and other negotiable instruments
- Precious stones and metals
- Losses arising from faulty manufacturing processes or poor planning
- Loss of information on computers or software
- General liability
Premium Rates.
Premiums are computed as a percentage of insured values. The rates
depend on the nature of the business, the degree of perceived hazard,
the type of construction and condition of the building, and the
location. Annual premiums usually fall between 0.3% and 0.7% of
the insured value. Budget for Sales Tax (13%) levied on premiums.
Disclaimer: This document is intended as a summary of most
relevant points of the insurance policy; as such, it does not contain
every provision stated therein. |
