11

ELECTRONIC EQUIPMENT ELECTRONIC EQUIPMENT INSURANCEINSURANCE

22

ELECTRONIC EQUIPMENTELECTRONIC EQUIPMENT

The EEI Policy covers sudden and unforeseen material damage to Electronic equipments due to any cause not specifically excluded.

(Policy covers fire & allied perils as well as Machinery breakdown, Theft and Burglary).

33

Sudden / unforeseen damage to electronics

Its an all risk cover

EE Insurance is, of immense importance to the users of electronic equipments.

44

EQUIPMENTS COVERED IN EEIEQUIPMENTS COVERED IN EEI

All Electronic equipments like Computers, Medical, Bio-medical and microprocessors, Audio / visual equipments

Electronic data processing machine

55

Transmitting and receiving installations Radio, T. V. Cinema sound reproduction and studio-equipments

66

Lets see an example of one of the coverage's – Short circuit

There was a electric skip on the main electric board due to the high voltage fluctuations, resulting in short circuit in the computer

Will it be covered under the policy ?

The equipment will be covered for the short circuit under EEI

77

WHAT DOES EEI POLICY WHAT DOES EEI POLICY COVER?COVER?

EEI is an all risk policy which covers Damage due to;

Smoke, soot, dust, corrosive gases etc Environmental contamination Water and Humidity Short circuit Falling objects and entry of foreign objects

88

Fire, lightning, explosionFire, lightning, explosion Human Errors like faulty/Careless/negligent Human Errors like faulty/Careless/negligent

operationsoperations Riot, Strikes, Malicious damageRiot, Strikes, Malicious damage Theft and BurglaryTheft and Burglary Natural calamities like flood, Inundation, Natural calamities like flood, Inundation,

Storm, Cyclone, EarthquakeStorm, Cyclone, Earthquake Subsidence, Land-slide, Rockslide.Subsidence, Land-slide, Rockslide.

99

Scope of CoverScope of Cover

Location risksLocation risks : Fire, lightning, theft, : Fire, lightning, theft, burglary and house-breaking burglary and house-breaking

Operational risksOperational risks: : Electrical/mechanical breakdown, faulty Electrical/mechanical breakdown, faulty design, faulty material, faults in design, faulty material, faults in manufacturingmanufacturing

1010

Scope of cover-Contd:Scope of cover-Contd: Risks of human elementRisks of human element : Faulty/ : Faulty/

careless/negligent operation, riot, strike, careless/negligent operation, riot, strike, malicious damagemalicious damage

Act of God risksAct of God risks: Storm, tempest, : Storm, tempest, hurricane, flood, inundation, subsidence, hurricane, flood, inundation, subsidence, landslide, rockslide, earthquake.landslide, rockslide, earthquake.

1111

War and similar risks including nuclear reactions, radiations and radio active contaminations.

Normal Wear and Tear, gradual deterioration,

Corrosion (Eg: Rust) Willful act, gross negligence

EXCLUDED PERILSEXCLUDED PERILS

1212

Consequential loss of any kind

The excess stated in the schedule

Malicious damage by workmen

1313

Defects existing at the time of taking insurance within the knowledge of insured or his representatives.

1414

The printer in Ajanta digital printers stops functioning suddenly due to some unforeseen condition and the production comes to a halt. Ajanta digital printers face a huge loss, because their printing orders get delayed and some even got cancelled. Hence the company demands a compensation for the production loss.

Will this production loss be covered?

UNDERSTANDING EXCLUSIONS UNDERSTANDING EXCLUSIONS BETTERBETTER

1515

No. The production loss will not be covered as it comes under the exclusions (Consequential loss)

But the machinery damage cost will be settled.

1616

The policy has “Excess” stated at the time the policy is taken.

If an excess amount exceeds the claim amount, Will the claim amount be paid?

1717

No. If the “excess amount” stated in the policy exceeds the claim amount it shall not be paid .

1818

Electronic Equipment Insurance - Electronic Equipment Insurance - ExtensionsExtensions

Extension of cover is available for;Extension of cover is available for; External data media :External data media :

Cover may be obtained for financial loss that may Cover may be obtained for financial loss that may arise from accidental loss of information stored on arise from accidental loss of information stored on the external data media such as floppies.the external data media such as floppies.

The sum insured for this additional cover should be The sum insured for this additional cover should be the amount required for lost or damaged data media the amount required for lost or damaged data media by new material and reproducing lost information. by new material and reproducing lost information.

1919

Increased cost of workingIncreased cost of working: :

Eg: In the event of a breakdown of the insured computer, Eg: In the event of a breakdown of the insured computer, the required computing capacity may have to be hired the required computing capacity may have to be hired from other sources. Cover may be obtained for the from other sources. Cover may be obtained for the reimbursement of these additional expenses involved such reimbursement of these additional expenses involved such as hire charges, transportation costs etc. as hire charges, transportation costs etc.

The Sum Insured should be the estimated amount which The Sum Insured should be the estimated amount which the insured would have to pay as additional expenditure the insured would have to pay as additional expenditure for 12 months use of substitute equipment for 12 months use of substitute equipment

2020

Electronic Equipment Insurance – Electronic Equipment Insurance – Sum InsuredSum Insured

Sum Insured should represent the present day Sum Insured should represent the present day replacement value of similar new equipment replacement value of similar new equipment including all incidentals and cost of Erection.including all incidentals and cost of Erection.

2121

Special Warranty in EEISpecial Warranty in EEI

EEI is subject to Maintenance warranty, that the Maintenance Agreement in force at inception should continue during the currency of policy

Maintenance includes: Safety Checks Preventive maintenance Rectification of loss/ damage/ faults arising from

normal operation as well as from ageing

2222

The AMC warranty can be waived for Personal computers with SI upto Rs 1lakh or for equipments where the insured has a competent in-house maintenance facility

The AMC warranty can be deleted by charging Additional Loading on the EEI rates (50% for equipments upto Rs 1 lakh SI and 100% loading for

equipments above Rs 1 lakh SI).

2323

2 Types of losses are considered before settling a claim:

Partial Loss Total Loss

Claim settlement and First condition of loss

2424

Where damage to the insured item can be repaired: The full cost or replacement of part damaged without deducting depreciation

Partial lossPartial loss

2525

Total loss

Insured value less depreciation for the period it was in use

2626

Underwriting Considerations:Underwriting Considerations:

Description of equipment and its function, Description of equipment and its function, manufacturer and modelmanufacturer and model

The age of the equipmentThe age of the equipment

The nature of the business, institution or The nature of the business, institution or profession in which the equipment operatesprofession in which the equipment operates

2727

What is the frequency and intensity of use? What is the frequency and intensity of use?

Are the operators skilled and experienced? Are the operators skilled and experienced? What training is given and does it follow What training is given and does it follow manufacturer’s guidelines? manufacturer’s guidelines?

Loss prevention, control and security factorsLoss prevention, control and security factors

2828

Repair facilitiesRepair facilities

Location/Nature of the riskLocation/Nature of the risk

Loss experience Loss experience

2929

An “attractive” risk would involve;An “attractive” risk would involve;

Reputable manufacturer, proven design and operation Reputable manufacturer, proven design and operation Trained & skilled personnel Trained & skilled personnel Purpose-built and controlled working environment, Purpose-built and controlled working environment,

air-conditioned and dust-free with minimum exposure air-conditioned and dust-free with minimum exposure to impact and water damageto impact and water damage

Careful application of loss prevention, maintenance Careful application of loss prevention, maintenance and security standards. and security standards.

3030

An “Unattractive” risk would involve;An “Unattractive” risk would involve;

Usage and operation by unskilled or Usage and operation by unskilled or inexperienced personnelinexperienced personnel

Non-proven design and technology Non-proven design and technology

3131

Rules for CancellationRules for Cancellation

At the option of the Insurer, a pro-rata refund of At the option of the Insurer, a pro-rata refund of premium may be allowed for the unexpired term premium may be allowed for the unexpired term on demandon demand

At the Insured's request, refund of premium may At the Insured's request, refund of premium may be allowed after charging premium for the time be allowed after charging premium for the time insurance was in force, on short period scale, insurance was in force, on short period scale, subject to retention of minimum premium by the subject to retention of minimum premium by the Insurer.Insurer.

3232

Short Period PoliciesShort Period Policies

The policies, if to be issued for The policies, if to be issued for shorter period than twelve shorter period than twelve months,months, should be issued at the rates set out hereunder should be issued at the rates set out hereunderPolicy Period RequiredPolicy Period Required % of Annual Rate% of Annual Rate

Not exceeding 1 weekNot exceeding 1 week 10 % 10 % Not exceeding 1 month Not exceeding 1 month 25 % 25 % Not exceeding 2 monthsNot exceeding 2 months 35 % 35 % Not exceeding 3 monthsNot exceeding 3 months 50 % 50 % Not exceeding 4 months Not exceeding 4 months 60 % 60 % Not exceeding 6 monthsNot exceeding 6 months 75 % 75 % Not exceeding 8 monthsNot exceeding 8 months 85 % 85 % Exceeding 8 monthsExceeding 8 months Full Annual RateFull Annual Rate