FOR the first time, a general insurer has started covering ‘exclusions’ at a slightly higher premium after the Insurance Regulatory Development Authority (IRDA) allowed partial freedom of wordings. In insurance parlance, ‘exclusions’ relate to developments where insurers will not come up with a compensation. These are explicitly mentioned in the wordings of any policy.
For one, till sometime ago, if there was a fire in a factory, insurers did not pay claims for the equipment that specifically triggered it. The policy only paid for damages caused to other equipment and premises as a result of the fire. From now on, the equipment that caused the fire is also being covered at an extra premium. In insurance parlance, the event of not covering the equipment that sparks off the fire is called the dynamo clause. We are doing away with the dynamo clause in any industrial policy at an extra premium. These are exclusions that have been part of the standard wordings for quite sometime. However, they did not make much sense. Hence, we have decided to cover these too. Similarly, if a machine rotating at high speed, like a mixer, broke and damaged other equipment in the vicinity, the rotating machine would not have been eligible for claims earlier.
Industrial clients were losing out as a result of the dynamo clause, since they had to shell out a sum to replace the equipment that caused the fire, despite having an insurance policy. There have been several cases in different industries where insurers have not paid for replacing the equipment causing trouble.
If a fire is the result of a turbine in an industrial workshop, the affected equipment around it would qualify for payment of claims but not the turbine. HDFC Ergo is also planning to cover losses spelt by personnel of public utilities. Damages to buildings brought on by telephone workers digging up a road near your building were not covered till now. This would now be covered.
For one, till sometime ago, if there was a fire in a factory, insurers did not pay claims for the equipment that specifically triggered it. The policy only paid for damages caused to other equipment and premises as a result of the fire. From now on, the equipment that caused the fire is also being covered at an extra premium. In insurance parlance, the event of not covering the equipment that sparks off the fire is called the dynamo clause. We are doing away with the dynamo clause in any industrial policy at an extra premium. These are exclusions that have been part of the standard wordings for quite sometime. However, they did not make much sense. Hence, we have decided to cover these too. Similarly, if a machine rotating at high speed, like a mixer, broke and damaged other equipment in the vicinity, the rotating machine would not have been eligible for claims earlier.
Industrial clients were losing out as a result of the dynamo clause, since they had to shell out a sum to replace the equipment that caused the fire, despite having an insurance policy. There have been several cases in different industries where insurers have not paid for replacing the equipment causing trouble.
If a fire is the result of a turbine in an industrial workshop, the affected equipment around it would qualify for payment of claims but not the turbine. HDFC Ergo is also planning to cover losses spelt by personnel of public utilities. Damages to buildings brought on by telephone workers digging up a road near your building were not covered till now. This would now be covered.
