Page 33 - The Insurance Times June 2020

DEMYSTIFYING

POLICY

EXCLUSIONS AND

CONDITIONS -

INDUSTRIAL ALL

RISK

T his is the first in the series of articles I plan to by a cause not excluded in the Policy ensues and then the

write on various Policy Conditions and Exclusions
Insurer shall be liable only for the ensuing damage.
mainly in Property Policies as per the various
Policy Wordings used in Inda.
If we look at the above exclusion we can identify the
following:
The Industrial All Risk Policy has an interesting 1. Defective Design is not a Peril it is a situation.
exclusion. 2. Defective Workmanship is not a Peril it is a situation.
3. Inherent Vice is not a Peril and is an inbuilt situation.
Let us try and break up this exclusion into a logical analysis
and let us see the modus-operandi of this exclusion/ 4. Latent Defect is not a Peril it is a situation which may
or may not result into something.
The Policy does not cover damage to Insured Property 5. Deterioration is not a Peril but a consequence.
caused by: 6. Deformation is not a Peril but a consequence.

7. Wear and Tear is not a Peril but a gradual loss of value
Faulty or Defective Design materials or workmanship
induced by something.
inherent vice latent defect gradual deterioration
deformation or distortion or wear and tear unless damaged
Defective Design is generally defined as something in a
About the author product that is so great, the product cannot be utilized for
the purposes intended or is even made hazardous as a result
Prantik Mitra of the defect, imperfection.
Associate Director,
Alliance Insurance Brokers Inherent vice is the tendency in objects to deteriorate
B Tech, AIII, AMIE, MBA ( Finance ) because of the fundamental instability of the components

The Insurance Times, June 2020 33