Page 397 - IC38 GENERAL INSURANCE

There are two important features which differentiate commercial insurance
from individual and retail lines.

a) The insurance needs of firms or business enterprises are much larger
than that of individuals. The reason is that the value of the assets of a
commercial enterprise is much larger than that of an individual‟s assets.
Their loss or damage could adversely impact the very survival and future
of the company.

b) The demand for insurance of commercial enterprise is often mandated
or made necessary by legal or other requirements. For instance, when
plants and assets are set up through a bank loan, their insurance may be
a condition of the loan. Many corporate enterprises in India are
professionally run companies and a number of them are multinationals.

They are required to maintain global quality standards, including the
adoption of appropriate risk management strategies and insurance for
protecting their assets.

Any loss arising out of the above perils is covered by the policy subject to some
exclusion.

2. What are the exclusions?

The exclusions are:

a) Losses due to excepted perils like

i. War and war like activities.
ii. Nuclear perils
iii. Ionisation and radiation
iv. Pollution and contamination losses

b) Perils that are covered by other policies in General Insurance

i. Machinery Breakdown,
ii. Business Interruption

ADD- ON COVERS
However some perils can be covered by payment of additional premium like
earth quake, fire and shock; deterioration of stock in the cold storages
following power failure as a result of insured peril, additional expenditure
involved in removal of debris, architect, consulting engineers‟ fee over and
above the amount covered by the policy, forest fire, spontaneous combustion
and impact damage due to own vehicles.

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