INSURANCE DOCUMENTS

PROPOSAL FORM Companys printed proposal form is an application for the required Insurance cover. The questions are designed to elicit all material information about the proposed risk.In marine cargo insurance, it is not the practice to use a proposal form whereas Data Sheet is used.In fire insurance, for large industrial risks risk inspection reports forms part of proposal.In Misc. Insurance Incl. Motor, proposals are invariably used.

COMMON QUESTIONS ASKED:Name and address For identificationProfession, Occupation or business In Personal Accident, Mediclaim this has a material bearing on the risk.Previous and present insurance Names of the Insurers, Whether any insurer had declined his proposal, imposed special conditions, increased the premium, applied any special conditions, warranties, or refused to renew the policy or cancelled the policy during its currency.

Loss Experience Full details of losses suffered by him whether or not they were insured.Sum Insured - Maximum limit of liability under the policyDeclaration Makes the proposal a basis for the contract. Lastly, signature, date & time

POLLICY FORMSIt is an evidence of the contract, stamped in accordance with the Indian Stamp Act, 1899 and can be divided in distinct sections:The Heading Companys Name & AddressThe Preamble or Recital Clause introduces the parties to the contract, makes a reference to proposal and premium paid as consideration

Operative or insuring clause Clearly defines the perils covered, perils excluded, the sum insured and other limits and the circumstances under which the Company is liable to pay to Insured. Schedule Contains relevant matter of the contract. Ex. Insured name and address, Policy No., Date of issue, Agency, Risk covered, premium charged, period of insurance, and details of the subject matter of the insurance.

Conditions Express conditions serve various purposes. Ex. Time notice of loss, cancellation, lay emphasis, some legal principles like subrogation and contribution, arbitration, etc. Implied conditions - not expressed on the policy. Ex. Seaworthiness of a ship.Conditions precedent material factConditions subsequent alterations in riskCondition precedent to liability prevents Insured from recovering a loss.

CLASSIFICATION OF CONDITIONS

CLASSIFICATION OF EXPRESS & IMPLIED CONDITIONS

WHAT ARE THE CONSEQUENCES OF BREACH OF CONDITIONS?

COVER NOTECOVER NOTES are issued In advance of the policyWhen negotiations are in progress Provide cover on a provisional basisUnstamped documentsNevertheless CNs are subject to usual terms, conditions, warranties etc., of the policy. Ex. Agreed Bank Clause, Declaration Clause, Spl. Warranties etc.

CNs contain name, address, sum insured, period of insurance, risk covered, rate and premium (if not known, provisional rate), Description of the risk, serial number of the CN date and signature.Motor cover notes are issued in accordance with the provisions of Chapters X and XI of the Motor Vehicles Act, 1988. In Motor Insurance Cover Note is issued as per the provisions of MV Act Form No. 52 [ Rule 142(1) of Motor Vehicle Rules 1989] Motor tariff regulations provide that a cover note is valid for a period of 15 days and the same can be extended by 15 days at a time, total period shall not exceed 2 months.

CERTIFICTE OF INSURANCEMOTOR INSURNCE It is required by M.V. Act that in addition to a policy a certificate of insurance is given to provide evidence to Police and Registration Authorities. It contains essential features of the cover.MARINE INSURANCE Certificates of insurance are issued to provide evidence of cover on consignments insured under Open Policies or Open Covers.

ENDORSEMENTSTo modify the terms and conditions in a policy endorsements are used.In Workmen's Compensation policies for a particular rate the relevant endorsement has to be incorporated.In Motor insurance under various circumstances relative endorsements are used.In both the above the wordings are set out by Tariff.

Endorsements are also to record alteration, generally in these circumstances during the currency of the policyVariation in Sum Insured (increase/decrease)Change of Insurable InterestTo cover additional perilsChange of risk like occupancy of the buildingTransfer of proper to another locationChange in name Cancellation of insuranceAdjustment of policy (like declaration policy)

WARRANTIESHaving accepted a risk for certain rate of premium and, subject to certain terms and conditions , the insurer would like to ensure that the risk remains, throughout the duration of the policy, the same as it existed at the time of proposal.The insurer would like to be protected against the introduction of some feature which may increase the risk.For this purpose , warranties are inserted in the policy

Warranties These are incorporated to ensure that the risk remains through out the policy period, the same as it existed at the inception, to protect himself (Insurer) against increase in the risk. Warranties may be printed on the policy, or separately attached.

EXMPLES OF WARRANTIESFire: Construction,FEA,Category of Materials I,II,III, Coir waste,Coir fibre caddies.Marine: Packing in double gunny bags, shipped in First class steamer, Professionally packed.Other Classes:Motor: Motor cycle not to used without side Car attached Misc : Premises are guarded by watchmen all the times under BP & JB policies.Eng :BPP insurance inspection of Boiler inspectors appointed by Govt. Boiler operated by attendants having valid certificate . : EEI Maintenance contract during period of insurance.

RENEWAL NOTICEAs a matter of courtesy and healthy business practice we issue renewal notice to the Insured that his policy is due to expire and invite him to renew his policy. There is no legal obligation to issue renewal notice.Renewal notice also calls for intimation about material alterations if any.Motor renewal notices also advise the Insured to revised the sum insured.It is also advised that no risk can be assumed unless full premium is paid in advance.

CONDITIONS WARRANTIES- REPRESENTATIONSA condition goes to the root of the contract and thus governs the validity of .A warranty , according to the general law of contract, is collateral and thus does not go to the root of the contract. In contract of insurance, however, a warranty has the quality of essentiality and thus effect the validity of a policy in precisely the same way as a condition. Strict compliance with warranties is obligatory.A representation is in a different category . It maybe a statement of opinion or of intention and it is not incorporated in the contract itself. A representation must be substantially accurate, but trivial misstatements are immaterial unless a representation is a warranty, as happens with the contractual duty of good faith, when all statements on the proposal form must be accurate in the absolute sense.