Application of excess in single incident on equipments covered under MBD and EEI

[Subodh Ramesh Raje]

--
Dear Brothers,

Greetings of the day.

A package policy had been issued where in coverage was taken for a hospital in various sections which included Fire, Engineering, Electronic, Burglary, Portable equipment, Public liability, etc.

Due to some reason, there was loss of neutral in the supply, leading to 400 volts being supplied to various single phase equipment and damaging them.

Some of the equipment was covered under MBD section in the package policy and some of it was under EEI section of the package policy.

In the wordings of both the sections, regarding excess, the policy clearly states that single highest excess would be applicable.

The policy wordings under MBD state as below:

The  Excess, as stated in the Schedule, to be first borne by the insured out of each and every claim; where more than one item is damaged in one and same occurrence, the insured shall not, however, be called upon to bear more than the highest Excess applicable to any one such item;

The excess in EEI policy states as below:

The Excess stated in the Schedule to be borne by the Insured in any one occurrence; if more than one item is lost or damaged in one occurrence, the insured shall not,  however,  be called  upon   to  bear  more  than  the  highest  single  Excess applicable to such items;

Kindly advise me how the excess would be triggered
1. i. One - single highest excess on various equipment under MBD
    ii. Second - single highest excess on various equipment under EEI policy

2. Only a single highest excess would be applicable on the various equipments covered under both the policies.

Looking forward to your advise.
With warm regards

Subodh R. Raje
Surveyor & Loss Assessor
313, Race Course Towers,
Opp. Citibank, Race Course Circle,
Vadodara, Gujarat - 390007
Mo: +91 9825048913 / +91 9427054665
LL: 0265 - 2341389
email: subodh...@gmail.com


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[Sushil Maroo Sushil Maroo & Co. Indore 9827022654]

 Single highest excess in any of section (MB or EE) will be applicable only. Your option no. 2

[pcshukla6549]

Dear Friends,

The package policy is a package of several policies so we should not confuse it with one policy. MB & EEI are totally different cover with different schedule of plant and machinery. The basis of excess to be deducted is different in both the section. For EEI it is normally 5% of the claim amount up to min....But for MB it is normally 1% of the SI up to max,,,.Subodh has not mentioned this but what I have discussed above is customary for these two policies. Secondly  if you carefully see the highest excess stipulation it says 

"he  Excess, as stated in the Schedule, to be first borne by the insured out of each and every claim; where more than one item is damaged in one and same occurrence, the insured shall not, however, be called upon to bear more than the highest Excess applicable to any one such item;

In engg policies machines are covered specifically with different sum insured ,therefore,any one item as referred hereto would be different for both policies. So both basis of excess to be deducted  and also any one item are totally different in both sections ,therefore, in my opinion it would option -1 only.

P.C.Shukla

On Thursday, January 5, 2017 at 2:41:03 PM UTC+5:30, pcshukla6549 wrote:

[pcshukla6549]

On Wednesday, January 4, 2017 at 2:58:36 PM UTC+5:30, subodh.r.raje wrote:

[Prem Chandra Shukla]

Mr Anil,

You are referring to fire policy., Where , it has been stipulated on the face of the policy. But no such stipulation is made in  engg policy.

P.C.Shuka

On Jan 5, 2017 3:10 PM, "anil arya" <anil....@gmail.com> wrote:

Dear Sir,
Excess is applied per location per insured, therefore in my opinion highest excess wiĺl be deducted.
Anil Arya

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[Sandeep Mashru]

Dear Shukla Sir,

You suggested Option 1 as below.

1. i. One - single highest excess on various equipment under MBD
    ii. Second - single highest excess on various equipment under EEI policy

In this 1.i is fine but

1.ii - Second - single highest excess on various equipment under EEI policy :

Will we calculated Single highest excess of EEI OR 5% of entire Claim Amount i.e. Assessed Loss after UI and compare it with the Excess of MB and highest one to be adjusted.

 

Please share your view.

Regards

Sandeep Mashru

9422147160

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[swapan basu]

In my opinion Mr. Shukla is right. MBD & EEI are separate Policies under a package. It is not an IAR  Policy .

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From: pcshukla6549
Sent: ‎05-‎01-‎2017 15:04

To: Indian Independent Insurance Surveyor And Loss Assessors Bengal
Cc: insurance...@googlegroups.com

Subject: Re: Application of excess in single incident on equipments coveredunder MBD and EEI

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[Prem Chandra Shukla]

Dear Sandeep,

In EEI policy the condition of excess stipulates:-

the Excess stated in the Schedule to be borne by the Insured in any one occurrence; if more than one item is lost or damaged in one occurrence, the insured shall not, however, be called upon to bear more than the highest single Excess applicable to such items

So if more than one time is involved in EEI Policy the excess will be first calculated separately by first arriving loss for each item damaged item which means (cost of repaires/replcment less salavge) less UI .Then 5% of the so arrived value is to calculated for each item . Highest value of the excess so calculated is considered for deduction as excess.

P.C.Shukla

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[Love Patel]

Dear Mr. Subodh Raje Ji,

Greetings,

I understand you are mentioning about Compact Policy.

If it is the same, then every section is clearly defined with coverage, exclusions and excess, including no. of expousers for X ray or scanners.

in EEI, series of losses considered as single incident, then flat 10% of highest individual claim amount is applicable, as single deductible excess. { EEI portion on compact policy (which i have seen in three different policy) 10% of claim amount is applicable as excess}

Same way in M B Portion,applicable excess on highest sum insured, should be adjusted.

Here, it draw more importance as single sum insured is mentioned in policy with list of equipment enclosed or every item with individual sum insured is mentioned in the policy. Prudent insurer prefers to enlist individual item on schedule of the policy. There it may attract individual excess, at the time of process.

This is answer we must get from the detailed study of the policy, terms of contract.

However, working for every section has to be carried out separately. 

I also request you to have a check on Reinstatement of Sum insured post payment procedure and share it for knowledge purpose.

  

On Thu, Jan 5, 2017 at 5:37 PM, rajesh rajesh <rajesha...@rediffmail.com> wrote:

What I understood from PCShuklaSirs mail is that excess for 02 sections to be deducted separately.

MBDSection (Excess 1% SI) : If Compressor SI is Rs 25 Lac & Net Amount of Loss is Rs 2 Lac: Excess Rs
25000/-

EEISection(Excess 5% CA): If CTscanner SI is Rs 100 Lac & Net Amount of Loss is Rs 2 Lac: Excess Rs
10000/-

Total Excess to be deducted: Rs 35000/-

Please correct if i have mistaken

Regards,
R.M. Barad
Surveyor
9420103141


On Thu, 05 Jan 2017 16:38:46 +0530 Prem Chandra Shukla wrote

>Mr Anil,
You are referring to fire policy., Where , it has been stipulated on the face of the policy. But no
such stipulation is made in  engg policy.
P.C.Shuka

On Jan 5, 2017 3:10 PM, "anil arya" wrote:Dear Sir,

Excess is applied per location per insured, therefore in my opinion highest excess wiĺl be deducted.

Anil Arya

On 5 Jan 2017 15:04, "pcshukla6549" wrote:Dear Friends,

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Thanks & regards
 
*Love Patel*
(Surveyor)

HIG 91, Bharhut Nagar, Satna
Madhy pradesh, India 485001
Contact 9425172741