Page 322 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

Important Points to Remember

The rate of premium for C.L. policy consists of two components -
Basis rate and percentage for the Indemnity Period.

Basis rate

a) The basis rate for consequential loss resulting from material
damage caused by the perils covered under fire policy shall not
be less than 1.25 times the full 'Average Fire Rate of the items
covering the contents of the process blocks of the premises
occupied by the insured

b) For other business premises where no manufacturing process is
carried on, the basis rate shall be 1.25 times the average fire rate of
the contents of the whole premises.

c) The average fire rate shall be the percentage which the aggregate
net premium is respect of the whole of the annual standard fire
and special perils insurance of contents of Process Blocks and /
or the whole premises as applicable under sub-paragraphs (a)
and (b) above., bears to the aggregate sums insured on such
contents.

d) The basis rate should not be altered when the factory becomes
silent during the policy period.

Extensions

On payment of additional premium, the C.L. Policy can be extended
to include "Add-on" covers included in the Fire policy, e.g.,
earthquake, spontaneous combustion, accidental failure of public
electricity / gas / water supply, etc. Appropriate endorsements are
attached to the policy.

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