RISK INSPECTION REPORT

FOR

Hitachi Chemical India Pvt. Ltd.

Plot no. SP2 – 82, New Industrial Complex,
(Majrakath), Neemrana, District Alwar
Rajasthan - 301705

ON
3rd November 2017

BY

Universal Sompo General Insurance Company Limited

Gurgaon
Acknowledgement
Universal Sompo General Insurance Company Limited wishes to thank the
executives of Hitachi Chemical India Pvt Ltd espically to Mr. Sumit San, Mr.Ved
Prakash San and Mr. Sanjeev Yadav San for the kind courtesy and cooperation
extended to our Risk Engineer Mr. Mohit Darbari during his visit and inspection of
the plant and subsequent discussions at the site on 3 rd November 2017.

Executive Summary of Risk Inspection

Insured : Hitachi Chemical India Pvt Ltd
Plant : Engineering Workshop (Others)

Class of risk : Risk Code 076/Rate Code 06 under Section IV of

AIFT

Classification of occupancy : Light Hazard Occupancy as per Fire Protection

as per TAC Manual
Location : The risk is located in the Japanese industrial area
of Neemrana
Mailing address : Plot no. SP2 – 82, New Industrial Complex,
(Majrakath), Neemrana, District Alwar, Rajasthan
- 301705
Office Phone No : 01494 - 671237
Fax No : 01494-671-201
Business activity : Manufacturing of Engine gear parts, valve guides
and bearing caps
Capacity : Depend upon the customer’s requirement
however valve guides and bearing capacity
production capacity is 10 Lacs/month
Plant commissioning : Owned Property since June 2013

Total Work force in plant : Around 153 Nos including on roll employees and
contract workers

Certification : Certified for ISO 9001:2008, ISO 14001:2015 and

TS 16949 (for auto ancillaries)

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
About the Insured
Hitachi Chemical India Private Limited is a Private Company incorporated on 30 November
2011. It is classified as Subsidiary of Foreign Company and is registered at Registrar of
Companies, Jaipur. Its authorized share capital is Rs. 1,200,000,000 and its paid up capital
is Rs. 1,200,000,000.It is inolved in Manufacture of Manufacture and sales & marketing of
powder metal products.

Hitachi Chemical India Private Limited's Annual General Meeting (AGM) was last held on 28
September 2015 and as per records from Ministry of Corporate Affairs (MCA), its balance
sheet was last filed on 31 March 2015.

Directors of Hitachi Chemical India Private Limited are Hideto Yao, Tetsuo Ito, Yozo Sato
and Satoshi Takahashi. Hitachi Chemical India Private Limited's Corporate Identification
Number is (CIN) U24232RJ2011FTC037180 and its registration number is 37180.Its Email
address is sumit@hitachi-chem.co.in and its registered address is PLOT NO.SP2, 82, NEW
INDUSTRIAL COMPLEX (MAJRAKATH), NEEMRANA - 301705, Rajasthan INDIA.

HITACHI CHEMICAL INDIA PRIVATE LIMITED is Limited Liability Company with authorized
capital Rs.1200000000.00, shareholders of HITACHI CHEMICAL INDIA PRIVATE LIMITED
cannot sell or transfer their shares without offering them first to other shareholders for
purchase in company.

Source:http://companyinfoz.com/company/hitachi-chemical-india-private-limited

About the Plant

Plant Layout & Construction

Total plot area - 22489.283 Sq. Mtr.

Buildup area (Total Roof area – 6394.508 Sq. Mtr.)

Free area (Road area – 5535.95 Sq. Mtr. + Paved area – 3675.825 Sq. Mtr. + Green area –
6883.0 Sq. Mtr.)

Overall production is under the single block and gas bank area away from main production
block.

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
Major Blocks:-
1. Main Production Block
2. Gas bank area
3. STP and waste disposal area
4. Nitrogen Generation Plant

Main Production Block

Class I constructed with Ground and First floor having GI shed and brick masonry walls.

Ground Floor – Reception area and Main production area

First Floor – Office and some portion inside the production area used for RM storage.

Production blocks itself the tallest structure having height of about 15-16 M.

Office area (Ground + First Floor) Production Block

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
Gas Bank Area

Gas bank of LPG, Nitrogen and Ammonia installed away from the production block having
about 15 M distance.

Diesel area LPG Yard Nitrogen yard Ammonia Yard

STP & Solid waste area

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
Process Details
Raw Material
Raw Material used is Iron Powder, Copper Power, Graphite and other such additives.
Mainly the raw material used in the plant is noncombustible in nature.

Finished Material
Engine Gear Parts, Valve Guides and Bearing Caps

Packing Material
Corrugated boxes, PP Sheet and small quantity of foam which are coming directly from the
vendor are being used as packing material. .

Process Flow Diagram:

RM -> Mixing -> Press Machine (Compaction) -> Sintering (Furnace having max. temp – 1200
deg C) -> Machining -> Anti Rust Oil dipping -> Visual quality check -> Dispatch

Entire manufacturing process is PLC controlled and SCADA monitored. Various interlocks
have been provided in the process for process safety management. 5 Nos electrical
furnace are there in the plant for increasing the mechanical properties for the material
after pressing process and having 1150 Deg C temperature. There is an interlocking system
in the furnace for 1150+-3 Deg C hence the furnace would automatically stopped if the
temperature reached at 1147 Deg C or 1153 Deg C. Continuation supply of Nitrogen is
there in the furnace for deoxidation and plant is having inhouse Nitrogen generation plant
which is also away from main production block. No diode or transformer is there in the
furnace and all the heaters are VFD controlled.

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
Storage Facilities:
All the RM and FG storage are being stored in the metallic racks as well as well as over
pallets however packing material storage was done in FG storage area which is packed in
corrugated boxes and stored in metallic racks. DG Sets and transformer are located in the
compound road of the plant.

Risk Exposure
Exposed Peril Possibility Description
Probable The chances of vapor cloud explosion could not
be ruled out as flammable liquid/chemical
(LPG, Diesel) are stored and handled at the risk
premises and there is continue supply of LPG in
Vapor Cloud Explosion
the furnace for the burning of waste gases and
fuels.
Probable Air compressors used in the plant and N2
generation plant may cause explosion if their
safety valve fail accidently.

Vessel Explosion
Probable Iron dust may cause dust explosion but no such
dust accumulation observed at the occupancy.
Production system is robotics and fully isolated
automatic thus chances of dust cloud formation
Dust Explosion
is low.
Probable Electrical furnace installed at each production
process lines which may cause fire hazards.
Propane, Ammonia gases also used for the
burning of gases in flare attached to each
Fire
furnace generated from furnace may enhance
the fire hazard.
Fire could be probable in the server room, UPS
room, electrical control panels, DG sets, cable
gallery, offices etc. under adverse conditions.

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
Catastrophic perils
Exposed Peril Exposed Peril
As per AIFT the risk falls under earthquake Zone III. Low to
Moderate Risk
Exposure – Low to Moderate

Earth Quake
The plinth height of the plant is above w.r.t main road level
and also the compound is having good drainage
arrangements
Exposure Low
Flood
This area is in Moderate damage zone for wind/cyclone but
considering the construction of the occupancy, the exposure
could be termed as Moderate

Wind / Cyclone
Exposure – Moderate

Others:
Exposed Peril Remarks
As conveyed, that no riot incidents occurred in the past in this
area but chances can’t be ruled out since contract workers are
present in the Plant.
Moderate Exposure.
Riots
The employer – employee relationship seems to be cordial. Till
now, no incidents such as strikes are told to be reported and no
internal union is present inside the plant hence chances can’t be
ignored.
Strike
Low Exposure.
Unexpected risks are, of course different from routine risks with
regard to uncertainty about whether or when they would take
place. There must be general enforcement of security to protect
all type of facilities from acts of violation. With respect to
Malicious and
Terrorism Damage unexpected risks such as terrorism.
No terrorism damage has been reported in this area.
However the probability of above risk cannot be estimated. The
damage due to terrorism can be catastrophic and unknown risk

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
 with high damage potential.
The plants all blocks were elevated as compared to the
surroundings. The slope of the plot is inclined towards the road.
Exposure to water logging could be considered as low.
Low Exposure
Inundation
The nearest airport (IGI Airport) is about 115 kms away from the
risk, hence the chances of damage due to air craft could be Low
considering the area does not come in direct take off or landing of
the aircrafts.
Aircraft Damage
Low Exposure
Forklifts and EOT cranes are there for men material movement
hence chances of impact damage due to internal vehicular
movement could be taken as Moderate.
Moderate Exposure
Vehicle Damage
The construction of the main production building is of majorly
Class I construction Type and appears to be strong, Structural
collapse could be possible in case of Earthquake or heavy winds /
cyclone.
Structural Collapse
Moderate Exposure
2 Nos security guards reside in the plant in day shift and 3 Nos
including one gun man at night from private security agency.
There is only one fate for men and material movement and the
risk is surrounded by brick boundary wall of around 8 feet.
Theft & Burglary
Low Exposure

Risk Exposure Grading and Block Identification

S. Block Degree of Construction Spacing from Remarks
No Hazard Features nearest Block
Production Partially RCC
& Storage Single Building
Roofing and Ground & first
1. Block Moderate Block
Brick walls with floor
GI sheet roof

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
 Gas Bank Single Building
Area Open Block Ground floor only
2 Moderate

Around 5 Mtr

3 STP & ETP Low Open from Production Ground floor only
Block

N2
Adjacent to Gas
4 Generation Moderate Class I Ground floor only
Bank Area
Plant

Fire Protection

Fire Extinguishers:
Around 97 Nos of CO2, Mechanical Foam and ABC type Fire extinguishers of different
capacities are provided in the Plant at strategic locations in easily accessible and
approachable locations. FEA properly distributed and signage present and easily
approachable.

Sand Buckets:
Sand buckets were installed near the DG Set and transformer installation area.

Hydrant System - 12 Nos Hydrant Points installed in the Plant with proper Fire Hose
Cabinets with 2 Nos of Hose Pipes and One Nozzle.

Small Bore Hose Reels – Total 2 Nos small bore hose reels with each FHC installed at
the staircase in the plant.

Fire Pumps - Hydrant system is in automatic mode, Main Electrical Pump Jockey Pump
and diesel engine installed in the plant.

Fire Water – Underground Reservoir of Capacity 100 KL and the pressure in the fire
line was found 6 Bar.

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
Manual Call Points – MCP and hooters installed in all over areas of the plant.

Fire Detection System – Smoke detectors installed in the office area and utility area
with main fire control panel located at main office area and one repeater panel
installed at the security room. Beam detector installed in the iron and copper powder
storage area which is there at mezzanine floor of the production block. Portable gas
detection system is there in the plant for the gas detection leakage mainly in LPG and
NH3 gas bank area.

Nearest Public Fire Department: The nearest fire brigade is located around 1 km in
Neemrana Industrial area itself from the risk premises & the response time is about 10
Min.

Utilities
Air Compressors:
1 x 600 CFM Capacity in N2 generation plant and 1 x 600 CFM Capacity for Plant, Make –
Atlas Copco

Electrical:
 Sanction load of 2350 KVA and electrical connection from JVVNL.
 Covered electrical fittings found at the production area and storage area.
 Industrial type electrical fitting observed.
 Separate earthing provided for every machines and earthing is being checked by third
party named Vidyut Engineers in every 6 months.
 1 x 2500 KVA Capacity and 1 x 750 KVA Capacity transformers installed in the plant.
 Dehydration and filtration test for transformers are being conducted by third party in
every year. It was done on 31 December 2016 last time as per IS6792:1983.
 3 Nos VCB installed for 2500 KVA Capacity transformer

Diesel Generators:
4 x 750 KVA Capacity, Make - Sudhir

Storage of Fuel:

Tank Capacity Per Day Usage

LPG 1320 Kg ( 40 cylinders of 30 kg each) 80 Kg
HSD 50 KL underground tank -------
Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
 Ammonia 1600 Kg (32 cylinders of 50 kg each) 450 Kg
Nitrogen 58 KL (Surface mounted vessel) -------

Cooling Tower:
1 x 200 TR Capacity, Make – Paharpur

STP & ETP:

16 KLD Capacity for STP and 1 KLD for ETP

Management Programs
Inspection Procedures
Routine inspections & checks of machinery are informed to be carried out by the in-house
maintenance team. Plant & machinery is inspected by the maintenance engineers on
regular basis.

Maintenance Procedures
1. Preventive breakdown & scheduled maintenance of all plant, machinery and
equipment is regularly carried out by the Maintenance Dept. Regular preventive
maintenance/ inspection is carried out in-house on machinery and equipment. All
precautions and safeguards have been taken care while maintenance is going on.
2. Repair facility- Most of the breakdown problems can be handled by the in-house
maintenance team. A fully fledged workshop is being set-up for most of the
required maintenance jobs as well as OEM maintenance takes place in case of any
special work requirement.
3. As informed the clients have not faced any major breakdown problem so far.
4. Planned shut down is there in the plant in the month of June & December.

Safety Management
The Management is committed towards safety and loss prevention. Maintenance team is
looking after the safety management
Fire exits are identified and clearly marked. Security guards keep ward and watch of
risk premises. Adequate guards have been deputed for round the clock security of risk
premises. Fire safety training imparted to all employees including security guards on
quarterly basis and mock drill conducted in the plant on half yearly basis. Records are
being maintained by admin department regarding mock drill and training. Last mock
drill was conducted on 27.9.17 in day shift and before that, it was conducted on
22.3.17 at 9 PM. There are two assembly points in the plant for emergency evacuation.

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
Safety briefing to all employees are being done at every Monday. Safety committee is
there in the plant including 15 members and they are meeting every second Tuesday
regarding safety related issues, incident and accident including near misses reporting.

Summary of Observations & Recommendations

General
1. It was found that the occupancy is being protected with 2 Nos lightening arrestors but it
is suggested that a study may be conducted to exactly check up adequacy of lightning
protection for plant facilities. IEC-62305 may be referred in this regard.

Specific Locations:
1. No automatic fire protection system found in the server room located at the office
area of the plant. Since office area is well adjoining and communicating with each other
hence it is suggested that 2 x 5 Kg ABC type modular should be installed in the server
room.

2. It was found that packing material were stored near electrical wiring of the fan
installed in finished goods and packing area. It is suggested to avoid such practices and
maintain minimum 3 feet distance between storage and any electrical installations.

3. It was found that fully addressable fire control panel was installed at the first floor in
the office area but there was no zone identification chart displayed near fire control
panel. It is suggested that proper zone identification chart should be displayed over main
fire control panel as well as over repeater panel in all understable languages.

4. Fire alarm receiving panel room in office area located at first floor “ SYSTEM TROUBLE”
indicating lamp was blinking during this survey. In this condition, a fire cannot be
Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
detected by the fire alarm system, and the fire might spread. It is recommended to make
sure the cause of trouble, and repair the fire alarm receiving panel. It is also suggested
that Zone familiarization training as a whole should be imparted to all employees
including security guards.

5. During the inspection, it was found that no automatic gas leak detection system
installed in LPG and NH3 gas bank area as plant is having portable gas leak detectors. It is
suggested that automatic gas leak detectors should be installed in LPG and NH3 gas bank
area considering the hazard associated with LPG and NH3.

6. It was found that there were uncovered tube lights installed in the FG storage area. It is
suggested that all the uncovered tube lights installed in the FG storage area should be
replaced with covered tube lights or LED lights.

7. It was found that Wall to wall cable entries is not close with fire sealant material in DG
set area. It is suggested that wall to wall cable entries to be closed by fire resistant
material to make compartmentalization as per IS 12459.

8. It was found that thermography was not conducted in the plant since long hence it is
suggested that thermography should be conducted in the plant for the detection of hot
spot.
The advent of computerized thermal imaging system has revolutionized the predictive
maintenance practices not only in electrical equipment’s but also in mechanical items like
Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
drives, gearboxes, bearings etc. The management should consider conducting
Thermography studies for their plant facility to diagnose the fire conditions and failures of
equipment early enough. Thermography shall be conducted as per IS Standard MTD 21
(5044)W.

9. During Inspection it was observed that the electrical panel was protected fire
Extinguishers only. The electrical fire in the panel is not detected very easily and it may
incur a huge loss if there is no detection system provided in the electrical panels. It is
recommended that the fire trace suppression system to provided in the electrical panel.
As the fire begins, the portion of the tube nearest the point where the most heat is
detected ruptures, forming an effective spray nozzle. The pressure will then drop as the
tube releases the entire contents of the cylinder through the distribution nozzle to
effectively suppress the fire.

10. It was observed that yellow pipeline was there for both Nitrogen and Ammonia in
Nitrogen generation area. If the color is not provided for the various pipelines as per the
code the workers may start /shut the valves which are not required. It is recommended
that pipes shall be coloured as per IS 2379. It is also suggested that Display boards that
indicate the color code followed for pipelines at the entrance of the sections/buildings.
Mark the content and direction of flow on the pipelines.

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
Insurance Related Recommendations
Age of the risk Since June 2013

Claims There was a short circuit in HT VCB Panel in December’15

and due to this, there was brekdown in VCB Panel. Extent
of loss was around INR 20 Lacs.
Construction Partially Class I constructon and Open Type
Distance from neighboring Single building block for production and storage as well as
risk adequate distance among neighboring occupancies
Housekeeping Above Average
Any facility in basement No (Basement is not present in the plant)
Fire Protection Available Fire extinguishers and hydrant system are there for fire
protection
Fire Detection Available Smoke Detectors are there for fire detection
Security Round the clock security is provided
Maintenance Maintenance team is present in the occupancy
Insurance Related It was found that there was no physical valutaion exercise
Recommendations conducted in the plant since inception hence it is
suggested that asset valuation should be conducted in the
plant.
Opinion About the Risk Above Average Risk due to:
 Light Hazard Occupancy
 Good Fire Fighting Arrangement
 Single Building Block for Production and Storage
 Non Combustible Raw Material & Finsihed Goods
 Class I Construction.

INSURANCE RELATED RECOMMENDATIONS

Valuation: - In case of insurance Policies it is essential to work out the sum insured
keeping in view the impact of underinsurance/ over insurance at the time of claim. The
present day replacement value and the future value interest factor including inflation
especially for the models of machinery which are presently available with improved
features needs to be carefully dealt with. In view of the rapid changes in the industry it is
felt that revaluation of the assets should be taken. Construction of a similar plant now
would require a totally different amount compared to what it would have taken some

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
years ago not only because of the inflation over the years but also because of the
technological improvements in the market.

Adequacy of sum insured must be ensured by taking care of Reinstatement value (RIV),
present day new replacement value (PDNRV) and market value with consideration of
inflation, technological up-gradation, obsolesce, index and other variances.

RMIP- Holistic and integrated risk management and insurance portfolio study is advised
with respect to exposures and hazards emanating from every constituent of business
environment, following insurable risks vis-à-vis insurance policies must be included in the
study.
Loss of profit from fire
Machinery breakdown policy
Boiler and pressure vessel insurance
Electronic equipment insurance
Machinery loss of profit
Marine (cargo)
Public liability insurance act policy
Commercial general liability
Directors and officer’s liability
Different employee benefit insurance (Group Medi-claim, Group Personal accident etc)
which will include contractual labours also.)

PML Assessment
Probable Maximum Loss (PML-Fire) –
The Probable maximum Loss is defined as the amount of maximum loss that can be
anticipated due to a fire and/or explosion, with all fire protection out of service and no
firefighting effort. The loss would be that which occurs if the fire were allowed to burn
freely until it burns itself out.

The PML of a risk will primarily depend upon following three parameters:
1. Construction of Block.
2. Hazard Grade of the Block.
3. Separating Distances.
The following factors will be considered when determining the extend of loss for the PML:
1. Occupancy - Inherent Hazards of the occupancy.
2. Continuity of Combustibles.
Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
 3. Combustible loading.
* Construction - Fire Resistivity
- Structural Integrity.
- Space Separation.

Guidelines for PML

Scenarios are selected and as per construction of the unit all blocks falling within the
stipulated distances would constitute as a single entity.

Methodology
Identification of single risk & visualization of realization loss scenario and estimation of
loss as per the guidelines. It is assumed that as per single Risk Concept "The Probable
Maximum Loss is an estimate of the monetary loss that can be sustained by Insured on a
single risk as a result of single fire or explosion considered by the underwriter to be within
the realms of probability. The estimate ignores such remote coincidence and catastrophes
as may be possibility but will remain unlikely."

Scenario Visualization
The Visualization and scenarios for PML estimates are based purely on the anticipated
severity of the incident and its effect on the property damage. Traditionally only one PML
is estimated per location.
PML Estimates methodology
The PML Estimates has been carried out by the methodology recommended by the Tarriff
Advisory Committee (TAC) vide their circular Ref : FT/24/2001 dated 21.12.2001.The TAC
prescribed methodology for estimation of PML is based on the concept of Risk which be
affected in the fire incident.

Construction Layout & PML Estimate-

The Visualization and selection of Scenarios for PML estimates are based purely on the
anticipated severity of the incident and its effect on the property damage.
In the present Risk, following areas are more susceptible to fire or where severity of fire
could be high:
1. Production & Storage Area including Utilities
2. Gas Bank Area
3. Nitrogen Generation Plant

During the physical inspection of the risk, it was found that occupancy is single building
Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
block for production and storage and having transformers, DG Sets and LT Panel adjacent
to this block as well. Total SI for the building is INR 10 Crores and SI for F&F is INR155.53
Crores hence for Material damage. Considering the separation among other blocks, we can
safely assume that around 90% VAR would be lying in the production and storage block
hence SI in production block would be as follows:
TSI in Production = 90% of TSI of the plant = Around INR 140 Cr
Material damage PML would be as follows:
Sum Insured Damage PML
Building INR 31.65 Cr 25 INR 7.91 Cr
Plant & Machinery INR 115.53 80 INR 92.424 Cr
and other accessories
excluding electrical
cables outside the
premises
Stock INR 6.83 Cr 100 INR 6.83 Cr
Total Material ------------ ---------- INR 107.164 Cr
Damage PML

BI (FLOP) PML – It was understand that the total sum insured for business interruption
policy is INR 25.91 Cr and indemnity period is 12 months.
It was found that there was single building block for production and storage and all the 5
Nos furnaces (Critical Machine for production) are installed in this block only. Though
there is always a standby facility available in production area if any fire happens in one
furnace and does not propagate to other furnace or nearby areas. But considering the
worst possible case scenario, any fire happened in the production area could propagate to
entire production and storage area since there was no passive fire protection system
installed hence BI PML would be as follows:

TSI for FLOP = INR 25.91 Cr

Indemnity Period = 12 Months
BI PML = 100 % of TSI (FLOP) = INR 25.91 Cr
Material Damage PML = INR 107.164 Cr
Fire PML (MD+BI) = INR 133.074 Cr
Total Sum Insured (MD+BI) = INR 155.53 + INR 25.91 = INR 181.44 Cr
Fire PML % = Fire PML / Total Sum Insured = 73.34 %

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same
Photos (not allowed in the Production Area)

Fire Pump House Catchment Pit for diesel leakage for day tank

Metallaic jumpers on the flanges LT Panel Room

Disclaimer:
"The Assessment, Report and Suggestions are made solely for the purpose of assisting Universal Sompo General
Insurance Company Limited (the Company) to evaluate the proposed risk for the purpose of underwriting. The
suggestions made by the Company are only indicative in nature and to inform the Policyholder about the
measures to prevention the loss by bringing the same to their attention certain potential hazards involved
thereto. The Assessment, Report or Suggestion does not claim to be complete and comprehensive in all respect
and it does not mean that all other hazards and potential risk are controlled, averted or excluded thereof. The
suggestions rendered by the Company are in the nature of general guidelines and the Company does not
assume any liability thereof."

Our Assessment, Report & Suggestions are made solely to assist under-writers in under-writing, and insured in loss prevention by bringing to their
attention certain potential hazards. It does not mean that all other hazards & conditions are under control. The advice rendered by the Organization
is in the nature of guidelines and the Organization does not accept any liability for the same