Page 413 - IC38 GENERAL INSURANCE

Since fire policy and boiler insurance policy are mutually exclusive, for
adequate cover, both the policies need to be taken. Sum insured under all
Engineering Policies should be the current replacement value.

6. Machinery Loss of Profits (MLOP) Policy

This policy is suitable for industries where interruptions or delays as a result of
machinery breakdown or boiler explosion result in huge consequential losses.

Where the time lag between the breakdown or loss and the restoration is large,
this policy compensates for the loss of profits during the intervening period due
to reduction in turnover and increase in cost of working. The terms and
conditions and coverage of business interruption policy is the same as the
business interruption policy following a fire policy loss, which has been
discussed earlier in this chapter.

7. Deterioration of Stock Policy

This policy is suitable for the owner of the cold storage (individual or a
cooperative society) or those who take the cold storage on lease or hire for
storage of perishable commodities. The cover is against the risk of deterioration
and contamination following breakdown of the refrigeration plant and
machinery and also due to rise in temperature and sudden and unforeseen
escape of refrigerants into the cold storage rooms.

8. Electronic Equipment Policy

This covers various kinds of electronic equipment, which includes the entire
computer system consisting of CPU, keyboards, monitors, printers, UPS, system
software etc. Auxiliary equipment such as air-conditioning, heating and power
conversion, etc. are also covered.

This policy is a combination of fire policy, machinery insurance policy and
burglary policy. The policy covers the contingencies such as defective design
(not covered under a warranty), effects of natural phenomena; defective
functioning due to voltage fluctuations, impact shock etc., burglary,
housebreaking & theft are also covered.

The policy is available to the owner, lessor or hirer, depending upon the
responsibility or liability in each case. It has usually three sections that cover
various types of losses:

a) Section 1: Loss and damage to equipment

b) Section 2: Loss and damage to external data media like computer
external hard disks

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