Industry Care Policy

Industry Care Policy

Draft Underwriting Guidelines - Industrial Care Policy

Applicability: Underwriting guidelines is applicable to All New Business/Renewal/Roll-over / co-insurance proposal of Industrial Care policy. This guideline supersedes all guidelines issued earlier.

Effective Date:The guideline is effective from January 01, 2007.

Underwriting authority is delegated as per Fire Underwriting Guidelines based upon the Sum Insured under Section I, II & IV. However, if for any other section (except Section XIIB), approval authority lies at higher level then, the proposal has to be referred to that level in the property segment. e.g: If the acceptance limit under PA section lies with segment head while as per Section I, II & IV the approval authority is with regional underwriter, the proposal has to be referred to the Segment Head, Property.

No quote shall be issued without approval of the competent authority as prescribed herein. The limits given are based on full sum insured Under Sections I, II & IV of all the policies issued for the properties in the particular location. However, in cases where initial quotes are not submitted by us and we are offered coinsurance share on lead insurer terms, our share of co-insurance under section I II IV will be the basis to decide the underwriting authority.

This Policy has 10 Sections which provide comprehensive protection for manufacturing units with maximum sum insured of Rs.100 Crore under Section I.

SECTION I – Standard Fire & Special Perils

This section coversbuilding & contents of the insured premisesagainst the perils named under Standard Fire & Special Perils Policy

Section I A – Building: The bifurcation of S.I of plinth / foundation & superstructure should be taken if the insured wishes to coverplinth & foundation against earthquake only and superstructure against all perils including EQ.

Section I B – Contents: It may include goods held in trust by the insured in the insured premises. Contents, if any, covered under Section IV of the policy (i.e. Electronic Equipment) may not be covered under this Sub-section.

  • Add-on Covers/Perils:All (including earthquake and terrorism) normally available under Standard Fire & Special Peril Policy.
  • Basis of Valuation:

Stock Market Value

Other than stock (building, plant & machinery etc.) Reinstatement Value / Market Value

  • Excess: As per Standard Fire & Special Perils Policy.

Section II- Fire Loss of Profit

  • Coverage under this section may be availed as per different specification and extensions as per Fire Loss of Profit Tariff.
  • Underwriting Acceptance limit (Combined for Section I and Section II) shall be based upon the risk classification & Fire Underwriting Guidelines.
  • Declined & Caution List as per Fire Underwriting Guidelines shall also be applicable.

Section III –Electrical & Mechanical Appliances

  • This Section covers all electrical and/or mechanical appliances, apparatus, gadgets and/or any electrical or mechanical equipments installed in the insured premises against Electrical and Mechanical Breakdown
  • Items mentioned here must be covered under Section I
  • Coverage as per terms & conditions of Machinery Breakdown Policy.
  • Sum insured shall be the cost of replacement.
  • Excess as per Machinery Breakdown Policy.
  • Selection of items eligible for coverage under this Section is permitted.
  • Make, year, serial number, model etc., shall be collected at the time of proposal.
  • Items covered under this Section should be less than 5 years old.
  • Declined List as per Engineering Underwriting Guidelines.
  • Underwriting Acceptance Limit as per Machinery Breakdown insurance Guidelines

Section IV - Electronic appliances

  • This Section covers electronic appliances, apparatus, gadgets, and/or any

electronic eqipments installed in the insured premises and the data carrying

materials and data contained in or on such data carrying materials and/or Software/Computer Programs.

  • Software and computer programs developed in-house will not be covered under

this Section.

  • Coverage under this Section is as per the Electronic Equipment Policy.
  • Valuation: Sum Insured shall be equal to the cost of replacement.
  • Selection of items eligible for coverage under this Section is permitted.
  • Make, year of make, serial number, model etc., shall be collected at the time of acceptance of the proposal itself and incorporated in the policy.
  • Items covered under this Section should be less than 5 years old.
  • Extensions including terrorism as as per Engineering Tariff
  • Excessunder this section shall be as per Electronic Equipment Policy.
  • Decline List under this section shall be as per Engineering Department.
  • Underwriting Acceptance Limit as per EEI Guidelines
SECTION V - Burglary & Housebreaking
  • Coverscontents covered under Section IB only in the insured premises with the same S.I
  • Itmay include“Goods held in trust”.
  • First Loss Basis:At the option of the proposer, S.I under this section can be on “First Loss Basis” for bulk items for a specified percentage not less than 25% of Total sum insured covered under this Section.
  • Basic rate would be charged on the percentage selected and a nominal premium at 10% of the basic rate would be charged on the balance contents.
  • Extra Benefits:Any damage to the proposer’s office premises and/or safe resulting from Burglary and/or Housebreaking or any attempt thereat subject to a maximum of 5% of the sum insured under this Section without any extra premium. However, the claim for loss to the content and damage to the premises together shall not exceed the sum insured covered under this Section.
  • Basis of Valuation:

Stock : Market Value

Contents other than incidental stock :Reinstatement Value or Market Value

  • Underwriting Acceptance Limit as per Burglary & Housebreaking insurance Guidelines

Section VI - Money Insurance:

  • CoversMoney in Transit whilst being carried by an authorized representative by

robbery, hold up or any other fortuitous cause & Money in premises during or after business hours - in safe and during business hours in till.

  • Sum Insured:

Cash in TransitSingle Carrying limit / Maximum value at risk at any point of time

Cash in safe / till Respective limit specified for coverage

  • Total S.I under this section cannot exceed 20% of Section I
  • Reinstatement of Sum Insured: Sum Insured to be reinstated by the full amount by collecting premium - on settlement of any claim under the policy.
  • Special Exclusion:Cash carried by persons who are not in the permanent employment of the Insured is not covered under the Policy.

Approval Authority:-

Authority / Sum Insured (Rs. In lakhs.)
Underwriting Manager / 5
Regional Underwriter / 100
Segment Head / 1000
Head – Underwriting / All proposals exceeding authority of segment head

Section VII: Goods in Transit

  • Coversinland, import & export transit of goods consisting of raw material, finished goods, semi finished goods, spares, consumables etc.
  • Decline Listshall be as per Marine Underwriting Guidelines
  • Premium Calculation:Premium under this section shall be calculated on the total sum insured/turnover.
  • Underwriting Acceptance Limit as per MarineCargo insurance Guidelines

Section VIII - Personal Accident

  • This Section covers proprietor, partner, director or an employee in the permanent employment of the proposer. and may also be extended to cover spouse and dependant children of the insured person in which case the usual discounts for group size as per PA policy are applicable.
  • The persons proposed for insurance should be between 18 and 70 years of age.
  • Medical expenses under this Section is fixed at 40% of the compensation payable for a valid claim or 20% of the CSI whichever is less. No other variation in the percentage of medical expenses shall be allowed.
  • Sum Insured under this section not to exceed 50% of the S.I of Section I.
  • Underwriting Acceptance Limit as per GPA insurance Guidelines

Section IX - Infidelity/Dishonesty of employees

  • This Section covers direct pecuniary losses caused to you by any act of fraud or dishonesty committed by the employees of the insured.
  • Persons employed by the contractor of the proposer or employed on temporary basis shall not becovered under the policy.
  • Sum Insured under this section not to exceed 20% of the S.I of Section I.
  • Underwriting Acceptance Limit as per Fidelity Guarantee insurance Guidelines

Section X - Legal Liability

Section X A - Towards Employees:

  • Covers proposer's legal liability to employees under Fatal Accidents Act 1855/ Workmen's Compensation Act 1923 and in Common Law to pay compensation (including claimant's cost, fees and expenses incurred in defending a claim).
  • Total Annual wages covered under this section should not exceed 10% of the S.I under Section I
  • Underwriting Acceptance Limit as per Workmen’s Compensation insurance guidelines

Section X B - Towards Third Parties:

  • Covers proposer's legal liability (other than liability under the Public Liability Insurance Act, 1991). This is a TP Liability cover without any Add on Extensions.
  • Excess: 0.5 % of the limit of indemnity per any one accident, subject to a maximum of Rs 3,00,000/- and a minimum of Rs 2,000/-. The excess is applicable to both property damage claims and death/bodily injury claims inclusive of defence costs arising out of any one accident.
  • AOA / AOYlimitunder this Sub-section for any one policy period shall not exceed 50% of the sum insured under Section I B of the policy or Rs. 50,00,000/- whichever is less.

General Regulations:-

Premium: Premium payable under the policy is as per the following rating schedule.

Rating Schedule

No. / Section / Premium Rate
I. / Fire & Allied Perils / As per Internal Underwriting Rating Guidelines
Terrorism / As per Terrorism Pool Rates
II. / Fire Loss of Profit / As per FLOP Tariff
III / Machinery Breakdown / As per MB Tariff
IV / Electronic Equipments/appliances / As per EEI tariff
Terrorism under Electronic Equipments/ Appliances / As per Terrorism pool rates
V / Burglary and Housebreaking / 0.20 %o
VI / Money Insurance (to be applied on i. single carrying limit for CIT ii. sum insured for CIS iii. sum insured for Cash in TIL/Counter) / 2.00%o
VII / Goods – in – transit / As per marine underwriting guidelines
VIII / Personal Accident / As per Group PA Policy rating
IX / Infidelity /Dishonesty of employees / 5.00%o
X / Legal Liability
A) Workmen Compensation / As per Workmen's Compensation Tariff
B) Public Liability / 0.50 %o
  • No restriction on minimum no of sections to be selected under the policy. Section I B is compulsory.
  • Section wise Sum Insured and Premium Details is compulsory.


Section Discounts

For CoveringDiscount Percentage

4 to 5 sections 10%

6 to 8 sections 15%

More than 8 sections 20%

Discount for favorable Claims Experience:-

Incurred Claim Ratio for the 4 yearsDiscount Percentage

excluding the expiring Policy(%)

Up to 20 %20

21 % - 35 %15

36 % - 50 %10

51 % - 60 %5

Loading Percentage for high claim ratio:

Incurred Claim Ratio for the 4 yearsLoading Percentage

excluding the expiring Policy(%)

Between 80 % and 90 %5

Between 91 % and 100 %10

Between 101 % and 115%15

Between 116 % and 125 %20

Over 126%Cover to be reviewed

Special Discount : Discount is available depending upon the risk profile of the insured (i.e. Past Claims Experience, Security Measure and Fire Fighting Equipment available in the premises). Underwriting Office should use this discretion appropriately.

Competent Authority / % of Discount
Regional Underwriting Manager / 5%
Segment Head / 10%
Head – Underwriting / More than 10%

Renewal discount is available for policies which are renewed with us and not for policies which are taken with us for the first time.


  • Special Discount, Section Discount and Low Claim Discount/High Claim Loadingshall not beapplicable to Tariff sections.
  • The discounts shall be allowed on step-down method in the following order:
  • Section Discount
  • Low Claim Discount/High Claim Loading.
  • Special Discount

U/w / UW Guidelines- Industry Care Package/ Ver1.1 / 1st Jan 07