HNB Assurance

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Terrorism LPO 437

This policy is backed by a special reinsurance arrangement (usually with the Underwriters in the Europe). It covers loss, damage or destruction to property (Property Damage) and Business Interruption due to acts of Terrorism, but in EXCESS of the cover provided locally by the Government Fund under the ‘Fire’ policy. As this cover is available locally from the aforesaid Fund up to a limited capacity, it is a rule that the Fund’s capacity is fully utilized before opting for this special Policy. For the purpose of information, at present, the Fund offers cover up to LKR 250 million in respect of Terrorism, and LKR 1 billion in respect of Riot, Strike and Civil Commotion. Those wish to obtain cover over and above of these limits, will opt for this cover. Though this cover is commonly called ‘Terrorism’, it usually covers following perils as well:

- Riot, Strike and Civil Commotion (SRCC)
- Malicious Damage
- Sabotage

An act of ‘Terrorism’ involves physical loss or damage caused to property by any or all members of any organization whose aim is or includes the over-throwing of any legal or defacto Government by Terrorism or Violence.

Standard Exclusions
- Burglary or Housebreaking, theft or larceny.
- Confiscation or requisitioning or detention or legal or illegal occupation of property insured.
- War and allied risks.
- Radiation or contamination with radioactive material and nuclear weapons material.
- Loss resulting from total or partial cessation or interruption of work.

Deterioration of Stocks in Cold Storage

Provides cover for losses arising out of deterioration of stock (e.g. frozen meats, dairy produce, fruits and vegetables etc.) in cold storage due to breakdown of chiller/ refrigerator plants. This cover is offered as a combination of Fire & Specified Perils/ Property All Risks and Machinery Breakdown policies. Therefore, any claims under this class of insurance will be admitted consequent to admission of liability under the primary policies, e.g. Machinery Policy.

Following requirements shall apply:

- This insurance class is selectively accepted, usually, if the entire portfolio of insurances is offered to the insurer.

- Completed questionnaire

- There must be Fire and Machinery Breakdown Policies covering the Machinery (refrigerators) in which stocks are stored.

- There must be a maintenance agreement or an in-house maintenance schedule in place.

- Machinery being in brand-new condition.

- Stand-by facilities (generators, spare-parts etc.)

Boiler & Pressure Vessel Covers Explosion or Collapse of boilers/ pressure vessels and possible Third Party Liability (Bodily Injury and/or Property Damage) claims as a result of such Explosions/ Collapses.

It should be noted that the Explosion cover grated under a Fire policy excludes damage to items that operates under internal pressure, as result, own-damage caused to a boiler cannot be covered under a Fire policy. Similarly the explosion of boilers and pressure vessels are excluded from the scope of the basic Public Liability policy, hence an option is offered to cover third-party liability under the Boiler Policy.

As such, following elements can be covered under the original Boiler policy:
- Own damage
- Third-party Liability, i.e. Property Damage and Bodily Injury

An EXPLOSION is defined as, sudden and violent rending or tearing apart of the structure of a boiler or vessel, or any part or parts thereof by force of internal steam, air or fluid pressure, causing bodily injury displacement of said structure accompanied by the forcible ejection of the contents.

Standard Exclusions
- Defects due to wear and tear
- Failure of individual tubes (unless caused by an explosion)
- Damage to (other surrounding) property belonging to the insured or held by him trust or on commission
- Willful negligence
- Loss sustained by stoppage of work
- Perils usually can be insured under a Fire policy (natural perils, malicious damage etc.)
- Any tests other than tests at a pressure not exceeding the maximum pressure permitted by the inspecting authority

Requirements:
- Boiler must be inspected within the statutory period (annually) and certification obtained
- Boilers shall only be operated by an attendant licensed to do so
- Manufacturer’s operating instructions are complied with at all times