Page 58 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

Agreed Bank Clause

When a bank advances a loan to a customer it has interest in the
property up to the amount of loan and interest advanced. Hence while
taking insurance cover the bank is made up party in the contract and
in case of any loss that claim would be payable to the bank instead of
the insured. For this an agreed bank clause is inserted in the policy
where banks/mortgagors are interested.

The clause provides :

a. Any claim under the policy shall be payable to the bank/financial
institution and not the insured

b. Receipt of money by bank shall be final discharge on behalf of the
insured.

c. If any notice is required to be given under the policy it will be
considered as given if the notice is up to the bank

d. That any adjustment, settlement, compromise made by the bank
shall be valid on all parties.

e. The interest of the bank shall not be affected due to any breach
by insured

Contract Price Insurance Clause

In the case of insurance of imported goods only (and not for goods of
local manufacture) which are sold under a contract which is cancelled
either wholly or to the extent of loss or damage, it is permissible to
issue a policy on the basis of Contract Price

Designation of Property Clause

For the purpose of determining, where necessary, the item under which

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