ELECTRONIC EQUIPMENT INSURANCE
1
ELECTRONIC EQUIPMENT
The EEI Policy covers sudden and unforeseen material damage to Electronic equipments due to any cause not specifically excluded. (Policy covers fire & allied perils as well as Machinery breakdown, Theft and Burglary).
2
Sudden
/ unforeseen damage to electronics
Its an all risk cover EE Insurance is, of immense importance to the users of electronic equipments.
3
EQUIPMENTS COVERED IN EEI
All
Electronic equipments like Computers Computers,, Medical, Bio-medical and microprocessors, Audio / visual equipments
Electronic data processing machine
4
Transmitting and receiving installations Radio, Transmitting T. V. Cinema sound reproduction and studioequipments
5
Lets
see an example of one of the coverage's ± Short circuit
There was a electric skip on the main electric board due to the high voltage fluctuations fluctuations,, resulting in short circuit in the computer Will it be covered under the policy ? The equipment equipment will be covered for the short circuit under EEI 6
WHAT
DOES EEI POLICY COVER?
EEI is an all risk policy which covers Damage due to;
Smoke,
soot, dust, corrosive gases etc
Environmental contamination
Water and Humidity
Short
Falling objects and entry of foreign objects
circuit
7
Fire, lightning, explosion Human Errors Human E rrors like faulty/Careless/negligent faulty/ Careless/negligent operations
Riot, Strikes, Malicious damage
Theft and Burglary
Natural calamities like flood, Inundation, Storm, Cyclone, Earthquake and-slide, -slide, Subsidence, Land-
Rockslide. 8
Scope of Cover
Location risks : Fire, lightning, theft, burglary and househouse -breaking - breaking breaking
Operational risks: Electrical/mechanical breakdown, faulty design, faulty material, faults in manufacturing 9
Scope of covercover-Contd: -Contd:
Risks of human element : Faulty/ careless/negligent operation, riot, strike, malicious damage
Act of God risks: Storm, tempest, hurricane, flood, inundation, subsidence, landslide, rockslide, earthquake.
10
EXCLUDED PERILS
War and similar risks including nuclear reactions, radiations and radio active contaminations. Normall Wear and Tear, gradual deterioration, Norma Corrosion (Eg: Rust)
Willful act, gross negligence 11
Consequential loss of any kind
The excess stated in the schedule
Malicious damage by workmen
12
Defects existing at the time of taking insurance within the knowledge of insured or his representatives.
13
UNDERSTANDING EXCLUSIONS BETTER
The printer in A janta digital printers stops functioning functionin g suddenly due to some unforeseen condition and the production comes comes to a halt. A janta digital printers face a huge loss, because their printing orders get delayed and some even got cancelled. Hence the company demands a compensation for the production loss. Will this production loss be covered? 14
No. The production loss will not be covered as it comes under the exclusions (Consequential loss) But the machinery damage cost will be settled.
15
The policy has ³Excess´ stated at at the time the policy is taken. If an excess amount exceeds the claim amount, Will the claim amount be paid?
16
No. If the ³excess ³excess amount´ amount´ stated in the policy policy exceeds the claim amount it shall not be paid .
17
Electronic Equipment Insurance Extensions Extension of cover is available for;
External data media : Cover may be obtained for financial loss that may arise from accidental loss of informati information on stored on the external data media such as floppies. The sum insured for this additional cover should be the amount required for lost or damaged data media by new material and reproducing lost information. 18
Increased cost of working: Eg: In the event of a breakdown of the insured computer, the required computing capacity may have to be hired from other sources. Cover may be obtained for the reimbursement of these additional expenses involved such as hire charges, transportation costs etc. The Sum Insured should be the estimated amount which the insured would have to pay as a s additional expenditure for 12 months use of substitute equipment
19
Electronic Equipment Insurance ± ± Sum Insured
Sum
Insured should represent the present day replacement value of similar new equipment including all incidentals and cost of Erection.
20
Special Warranty in EEI
EEI is subject to Maintenance warranty, that the Maintenance Agreement in force at inception should continue during during the currency of policy
Maintenance includes: Maintenance Safety Checks Preventive maintenance Rectification of loss/ damage/ faults arising from normal operation as well as from ageing 21
The AMC warranty can be waived for Personal computers with SI upto Rs 1lakh or for equipments where the insured has a competent in-house in-house maintenance facility The AMC warranty can be deleted by charging Additional Loading on the EEI rates ( 50% for equipments equipmen ts upto Rs 1 lakh SI and 100% loading for equipments equipmen ts above Rs 1 lakh SI).
22
Claim settlement and First condition of loss
2 Types of losses are considered before settling a claim:
Partial Loss
Total Loss
23
Partial loss
Where damage to the insured item can be repaired: The full cost or replacement of part damaged damage d without deducting depreciation
24
Total loss
Insured value less depreciation for the period it was in use
25
Underwriting Considerations:
Description of equipment and its function, manufacturer and model The age of the equipment The nature of the business, institution or profession in which the equipment operates 26
What is the frequency and intensity of use?
Are
Loss
the operators skilled and experienced? What training is given and does it follow manufacturer¶s manuf acturer¶s guidelines? prevention, control and security factors
27
Repair facilities
Location/Nature
Loss
of the risk
experience
28
An
³attractive´ risk would involve;
Reputablee manufacturer, proven design and operation Reputabl
Trained & skilled personnel
Purpose--built Purpose - built built and controlled working environmen environment, t, air--conditioned air -conditioned and dust dust--free -free with minim minimum um exposure to impact and water damage Careful application of loss prevention, maintenance maintenance and security standards.
29
An
³Unattractive´ risk would involve; Usage and operation by unskilled or inexperienced personnel Non--proven Non - proven proven design and technology
30
Rules for Cancellation
At
the option of the Insurer, a propro-rata -rata refund of premium may be allowed for the unexpired unexpired term on demand At
the Insured's request, refund of premium may be allowed after charging c harging premium for for the time insurance was in force, on short period scale, subject to retention of minimum premium by the Insurer. 31
Short Period Policies
The policies, if to be issued for f or shorter period than twelve months, should months, should be issued at the rates r ates set set out hereunder hereunder Policy P olicy Period Period Required Required % of of Annual Annual Rate Rate Not N ot eexceeding xceeding 1 w week ee k 10 10 % Not exceeding 1 month 25 % Not N ot exceeding exceeding 2 months months 35 35 % Not N ot exceeding exceeding 3 months months 50 50 % Not exceeding 4 months 60 % Not N ot exceeding exceeding 6 months months 75 75 % Not N ot exceeding exceeding 8 months months 85 85 % Exceeding E xceeding 8 months months Full Full Annual Annual Rate Rate 32
