This policy covers loss or damage to your property due to:
a) Fire,
b) Lightning and Explosion caused by gas used for domestic purposes.
For an additional premium, coverage may be extended to these risks:
a) Malicious damage,
b) Bursting or overflowing of water tank or pipes,
c) Damage by aerial devices,
d) Earthquake,
f) Volcanic eruption or
e) Windstorm and flood.
Stocks and merchandise are insured on Indemnity Basis and all property other than stocks and merchandise, e.g. building, plant & machinery, furniture, fixtures, fittings and the like, are insured on Reinstatement Value Basis.
On an Indemnity Basis, we will try to reinstate you to the position before the loss occured, i.e. put you in the position as if you had never suffered a loss. In other words, we will settle the claim on the basis of a new replacement value less depreciation, wear and tear.
On Reinstatement Value Basis, however, we will settle the claim without deduction for depreciation, wear and tear. Therefore if you are over insured, you will not be paid the higher amount that you have insured.
It is always better to over insure than to under insure. This is because the policy is subject to the Average Condition, which means that if the sum insured is not adequate, you will have to bear a proportion of the loss. It is also advisable that the sum insured should take into account any inflation.
You can insure your stock on declaration basis.
The sum insured selected by you should represent the highest amount of stock that you are most likely to have at a particular point of time. For example during the festive season you are likely to carry more stock than usual. You therefore select the highest stock level during this period as the sum insured.
We will charge you a provisional premium based on 75% of the rate. At the end of each month you will have to declare the highest stock level for that month. At the end of the insurance period, the we will total the stock for the 12 months and arrive at the average stock for that particular period of insurance.
The actual premium is then charged on this. If this exceeds the provisional premium, you are required to pay an additional premium. However, if this is the reverse, the insurance company will make a refund to you, subject to a maximum of 50% of the provisional premium.
