GUIDELINES

FOR ASSISTING
DISPOSAL OF CLAIMS

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 INDEX

1. General guidelines

2. Fire Insurance

3. Engineering Insurance

4. Miscellaneous Insurance

5. Liability Insurance

6. Marine Cargo Insurance

7. Marine Hull Insurance

8. Motor Own Damage

9. Motor Third Party

10. Disposal of Salvage

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 GENERAL
GUIDELINES

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1. Introduction: The Guidelines laid down here are not exhaustive
and are of general nature. It may be possible that some of the
Guidelines laid down can not in practice be complied with due to
particular circumstances of a case. Such non-compliance need not,
therefore, render the claim as invalid. The Claim Settling
Authority can use discretion by recording the reasons.

2. Appointment of surveyor :

2.1 The Insurance Act stipulates that all claims of Rs.20,000/- and above
are to be surveyed by a licensed surveyor. Therefore, for claims less
than Rs.20,000, survey by a licensed surveyor is not mandatory.
Such losses may be surveyed by the Company’s officials (In-house
Survey) if survey is required.

2.2 Ministry of Finance vide Gazette Notification No. Part II Section 3(ii)
dated 30/5/70 have exempted certain clauses of claims from the
operation of Section 64 UM sub-section (10) irrespective of the claim
amount and hence such claims can be processed without insisting on a
report from a licensed surveyor.

2.3 The following must be kept in view before a surveyor is appointed for
any claim:

a) The surveyor should be holding a valid licence

b) The surveyor should be selected depending upon the type of loss
and the nature of the subject matter involved.
c) For assessment of some losses specific technical expertise may be
required and consultants having such technical expertise may be
associated with the surveyors. The consultants’ remuneration
should be negotiated in advance bearing the expertise in mind.
This will be in addition to the survey fee payable.
d) Wherever business interruption losses are involved, the surveyors
for the material damage and the business interruption losses,if
several, should be competent to complement one another. One
surveyor can be utilised for both the losses if the Company is
satisfied about the surveyor’s competence for both the jobs.
e) Appointment of Joint Surveyors may be done on the merits of the
case.
2.4 Companies may frame guidelines on Authority for appointment of
surveyor if they so desire.

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2.5 Where a servicing DO is approached for appointment of surveyor
even though they are not the policy issuing office, surveyor must be
appointed by the servicing DO immediately, with intimation to the
policy issuing office.

3. Appointment of Investigator:
3.1 Depending upon circumstances it may be necessary to appoint an
investigator to verify the claimed version of loss. A separate
surveyor appointment may be considered if any actual physical
survey/assessment is possible and called for.

3.2 The letter appointing the investigator should mention the terms of
reference and make it clear that the report should contain no
inferences or doubts unless these are well documented and
substantiated and can stand the scrutiny of a court if so required.

3.3 In the absence of a laid down schedule of fees for investigators, it is

advisable to negotiate and decide the fees to be paid in addition to
expenses actually incurred before formally appointing the investigator
and the determined/decided fee recorded in the letter of appointment.

4. Processing of Claims:

4.1 Documents generally required for processing of claims are specified

in the respective sections and as far as possible all documents must
be called for from the insured in one go and not in piecemeal.

4.2 “On Account” Payment: Pending final assessment of a claim an “on

account” payment may be considered subject to confirmation of the
following:
 Loss due to Occurrence of a peril covered by the policy
 establishment of liability
 The minimum liability that might arise under the policy.

4.3 After approval of the claim by the competent authority, the

insured/claimant should be advised of the final amount of claim
approved, with details thereof.
4.4 Remaining formalities of obtaining full and final discharge and
bank/financial institution’s discharge (where required) should be
completed before release of the amount of claim.
4.5 If the loss or any part thereof is recoverable from a Third Party, a letter
of subrogation and/or assignment and special Power of Attorney, to

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 suit special cases, is to be sent to the insured for completion on
requisite stamp paper and return before settlement.

5. Co Insurance: The leader will process the claim on behalf of all the
coinsurers. A decision by the leader regarding claim settlement, taken
at the appropriate level according to the existing tenets of delegation
of financial authority, shall be final and bindidng on the coinsurers.
Claims decided at the appropriate level by the leader will not be
processed again by coinsurer(s), regardless of the amount. The leader
will intimate to the coinsurer details of a claim settled by him with
copies of all relevant reports and documents. The coinsurer will settle
his share of the claim within 15 days from the date of receipt of such
intimation from the leader without any delay.

In case of a claim requiring Board decision, the decision taken by the

Board of the leader shall be binding on the other coinsurers. There
shall be no separate need for the coinsurers to approach their
respective Boards for decision in respect of such claims. A suitabale
note may, however, be placed by the coinsurers before their respective
Boards for information in such cases.

6. Close Proximity Cases: Detailed investigation should be immediately

instituted when a loss occurs in close proximity, i.e. within 5 days for all
classes of insurances (except marine voyage policies), of the date of
inception of risk. The close proximity mentioned here is in reference to
new insurance or where there has been a break in insurance. Close
proximity investigation should also be carried out in cases where it is
found that insurance has been taken out significantly later than it ought
to have been taken, i.e. the risk has remained un-insured or
inadequately insured prior to the insurance cover under reference.

7. Rectification of policy after a loss:

7.1 Rectification of a policy after a loss is reported for reasons other than
breach of condition/warranty should be carried out as under:

[a] Where rectification involves collection of additional premium, the

additional premium may be charged only on the affected policy period
in which the claim has arisen.
[b] Rectification can be done by the Authority Competent for
settlement of the claim.

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8. Repudiation of Claims:
If a claim warrants repudiation, the competent authority would be the
authority competent to settle the claim. Letter of repudiation may state
the reasons and/or the policy condition under which it is repudiated.

9. Re-opening of Claim files:

Reopening of claim file can be done by the authority one step higher
than the appropriate claim settlement authority.

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FIRE INSURANCE

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 FIRE INSURANCE

1. Since under Fire Insurance variety of buildings, machineries,

equipments and stocks are involved, in addition to a competent
surveyor it is recommended that the Company officials should visit site
of losses reported as far as possible.

1.1 If the estimate of Loss is within RS. 20,000/- and loss of profits claim is
not involved, the office shall have the discretion to waive an
independent survey and settle the claim on the basis of the claim form
and other supporting documents and after being satisfied that it is
admissible under the policy and that the amount claimed is reasonable
and consistent with the extent of damage. Where necessary, an
authorised official in the DO may inspect the damage, if necessary.

2. Processing of claims :

2.1 The documents generally required for processing fire claims are :
(i) Copy of the policy complete with term, conditions and
warranties.
(ii) Claim form duly completed by the insured
(iii) Survey report should include -
a) indication of the cause of loss
b) establishment of liability
c) assessment of loss
d) confirmation of compliance of policy terms, conditions and
warranties
e) admissibility of the claim
(iv) Photographs
(v) Police report and } if necessary
(vi) Fire Brigade report }

Note : Items (v) and (vi) may be waived if the survey report is clear and does
not cause any doubt on the occurrence as well as the extent of loss.

2.2 Claims Arising out of Act of God perils :

In addition to the documents specified under 2.1 above, other documents like
newspaper cuttings, photographs and meteorological reports are helpful in
substantiating such losses. Where the incident is localised, not reported in the
media or not recorded by any Meteorological Department, the surveyor should
enquire about the incident from local government/ statutory authorities and
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support the description of the occurrence and the loss by taking photographs of
the damage. Where the Surveyor confirms the incident clearly and
unambiguously, the documents detailed above may be waived.

2.3 While processing the claims, attention is to be paid to concurrent

policy(ies) and Financial Institute clauses.

2.4 Losses reported under the RSMTD peril :

In case of isolated losses under the above endorsement, copy of the First
Information Report lodged with police and their Final Investigation
report should be furnished.

The Surveyor should give a detailed report on the occurrence and

confirm that the loss/ damage is admissible under the policy. Loss/
damage, if any, arising out of omission or commission not involving
physical damage should be segregated.

3. Disposal of Salvage

3.1 Salvage from Fire and allied perils losses tend to deteriorate faster.
Therefore, disposal of the salvage should be undertaken on priority basis
for and on behalf of the concerned parties without waiting for the
liability to be established. However, the provision of the disposal of
salvage guidelines should be followed.
3.2 It would be in the interest of the organisation if officials visit site of
loss/ and hasten disposal of salvage. It will also give moral support to
clients at the time of need.

4. DISPOSAL OF CLAIMS WHERE ALL RECORDS REQUIRED FOR THE

ASSESSMENT OF CLAIMS ARE DESTROYED IN FIRE AND/OR
ALLIED PERIL RISKS LIKE FLOOD ETC.

4.1 Settlement in these circumstances would generally be a negotiated one

because of non-availability of accounting records and other evidences.
Therefore, the Surveyor should be advised to assess such losses on a
realistic and reasonable basis after discussions with the Insured, Bank/
Financial Institutions (if involved), and if required with
suppliers/customers/ statutory bodies like tax authorities, excise
authorities etc. and the concerned Insurance company.

5. General

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 Where the loss estimate is more than Rs. 50 lacs intimation is to be sent
to LPA requesting for inspection. Where the loss estimate is more than
Rs. 1 Crore intimation is to be sent to TAC also.

6. Loss of Profits / Consequential Loss / Business Interruption Losses:

6.1 Claims under these policies have to be monitored regularly by the office
to ensure that the insured is doing the needful to minimise the period of
indemnity as much as possible.

6.2 In case the surveyor for MD Loss is different from the consequential loss,
co-ordination between the two has to be ensured. Control is to be
maintained by the Insurer.

7. Industrial All Risk Policy:

Claims under these policies will be dealt with as per the relevant section
under which the claim has arisen.

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ENGINEERING
INSURANCE

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 ENGINEERING INSURANCE

1. Documents required for processing all engineering claims are as under:

a) Copy of the policy with full terms, conditions and warranties

b) Claim form
c) Survey report including -
i) clear indication of the cause of loss
ii) extent of damage and loss
iii) establishment of liability
iv) assessment of loss
v) confirmation of compliance of policy terms, conditions and
warranties
vi) admissibility of the loss
d) Photographs }
e) Police Report } if necessary
f) Fire Brigade report }

Note : Items (e) and (f) may be waived where the survey report is clear
and does not cause any doubt on the occurrence as well as extent of loss.
Where occurrence of riot is in the public knowledge, production of Final
Police Investigation Report and Fire Brigade report may be waived.

1.1 In case of theft losses it is necessary to collect a copy of the First

Information Report or proof of complaint lodged by the insured with the
police, such as registered AD letter. Final investigation report may be
waived depending on the merits of the case.

1.2 The steps involved in loss adjustment should be as under:

Gross loss assessed,
a) Less: depreciation, if any,
b) Less: Salvage
c) Less: Under Insurance
d) Less: Excess
e) Net Claim Payable

Policy typewise additional requirements are as follows:

2. MCE POLICIES
Marine practice to be followed for settlement of Marine claims under MCE
policies.

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2.1 In case of mega projects, the services of an on-site representative/outside
project monitoring agency could be retained to:
a) Monitor the progress of the project activity;
b) Receive report, on general conditions prevailing at site, from loss
minimisation point of view;
c) co-ordinate with different authorities at site;
d) collect required documents for claims already lodged to expedite
disposal;
e) conduct survey of losses falling within the self-survey limit.
f) Preliminary survey of losses

2.2 Incidental expenses like supervision charges, storage charges may be

considered to the extent they are included in the sum insured and actually
incurred. When the replacement value is not ascertainable, the assessment
can be based on the original invoice value plus escalation if provided in
the policy. However, it may be left to the surveyor to arrive at the value.

2.3 The loss under various extensions like additional custom duty, air freight,
express freight, overtime wages, etc., are to be assessed separately. The
expenses under these extensions will be available only when incurred by
the insured. The liability under these extensions will be over and above
the ones allowed under the standard policy provided the limit is not
exhausted by earlier settled claims and/or claims reported but pending
settlement.

2.4 If the claim is assessed both under the main policy and extensions like
additional custom duty, express freight, overtime wages etc., the specified
excess will be applied for each of these sections separately.

3. CONTRACTORS’ ALL RISK INSURANCE:

3.1 The surveyor shall confirm that the damage is not due to faulty design as
the policy completely excludes loss due to faulty design unlike the
erection policy where only a particular portion is excluded and resultant
damage is paid.

3.2 Excess as specified is to be applied.

4 CONTRACTORS’ PLANT AND MACHINERY INSURANCE:

4.1 Being an Annual Policy, the validity of the policy at the time of
occurrence should be verified.

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4.2 Identification of the damaged equipment/item should be asked for to
confirm coverage under the policy. This is necessary since selection of
equipments for insurance is allowed.
4.3 The surveyor should confirm the accidental damage to the equipment.
4.4 For items fabricated by the contractor and replacement values not
available, the surveyor should assess the loss on the basis of actual costs
incurred by the insured

5. MACHINERY INSURANCE:

i) Test reports of the damaged parts if deemed necessary by the

surveyor and/or suggested by the insurers is to be submitted to the
insurer/surveyor.
ii) Repairs/replacement should be confirmed by the surveyor

5.1 The claim payable may include costs of dismantling, transportation to the
repairer’s shop, repairs and re-transportation and re-erection and other
incidental expenses. If damaged equipment being sent out is covered
under a Marine Transit Policy, the cost of such insurance may also be
reimbursed.

5.2 If repeated losses are reported on the same equipment, the underwriting
office can take the help of an outside expert to ascertain the precise cause
of repeated losses and suggest measures for avoidance/minimisation of
re-occurrence of breakdown/loss.

5.3 The exclusion of damage to Belts, Ropes, Chains, Rubber Tyres, Dyes,
Moulds, etc is to be considered. As to the oil and other operating media in
the transformer and equipment, these may be reimbursed only when
specifically covered under the policy.

5.4 The losses under the other extensions like additional custom duty, air
freight, express freight, etc are to be assessed separately and the
underwriting office should confirm the availability of additional sum
insured specifically for such items of expenditure while recommending
the claim for settlement. If the assessment involves additional expenses
for repair/replacement, the surveyor should confirm that the expenses are
reasonable.

6. BOILER EXPLOSION INSURANCE:

a) Copy of the certificate issued by inspectorate of Boilers (wherever

applicable) for operation
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 b) Boiler inspection report on the occurrence

7. LOSS OF PROFITS INSURANCE:

7.1 A loss of Profit claim is admissible only if loss or damage to Machinery or

Boiler covered under corresponding policy is admissible.

7.2 As selection of equipment under the MLOP is allowed, the underwriting

office should re-confirm the coverage of the equipment involved.
(Attention is drawn to the applicable time excess and surveyor is to be
appointed in consultation with Regional Office/Head Office only in those
cases where the interruption period is likely to exceed the time excess.) As
the selection of the indemnity period is made depending upon the type of
machinery, the underwriting office should make a policy copy available to
the LOP surveyor and draw his attention to the indemnity period
available against the affected item.

7.3 The material damage surveyor and the loss of profit surveyor should
report on the steps initiated by them in helping the insured to reduce the
period of indemnity by expediting repairs/replacements or adopting
temporary measures. As a principle, the Company Engineer should be
associated as far as possible along with the surveyor to minimise the loss
under the Machinery Loss of Profit policy.

8. ELECTRONIC EQUIPMENT INSURANCE:

Since the selection of equipment is allowed, the underwriting office

should confirm the existence of cover for the damaged item.

Various exclusions under the basis policy/ xxxxxxxxxxx

It should be ensured that claim does not fall under any of the exclusions.

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9. DETERIORATION OF STOCKS:
The surveyor should ensure that the insured takes following loss
minimisation measures:

i) No fresh stock should be loaded in the cold storage chambers.

ii) Cold storage doors should be sealed to maintain temperature and
avoid temperature rise.
iii) If possible, the insured should be requested to shift stocks to some
other running cold storage premises preferably in cool evening/
night period or by refrigerated vans.
iv) The Insured should be requested to carry out repairs to the
refrigerator plant most expeditiously.
v) If there is no possibility of completing the repairs immediately, the
insured should be advised to unload stocks from cold chamber for
disposal in the local market as quickly as possible, and at the best
available price in association with the surveyor/local authorities.

10. ALOP :
Following action is to be taken:

a] For a material damage reported under a Marine Cargo Policy or a Project

policy, the HO should immediately take steps to monitor the facts of delay
in repairs/replacement that may trigger a claim under the ALOP/Marine
ALOP section.

b] Deputation of surveyors for ALOP claims should be only with the

authorisation of the HO(Tech).

11. CECR:
All the general regulations as mentioned in the manual should be followed and
surveyors with good knowledge of civil engineering should be utilized.

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MISCELLANEOUS
INSURANCE

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 MISCELLANEOUS ACCIDENT INSURANCE

1. The important aspect to be noted is that Miscellaneous Accident Insurance

includes a number of covers which are in the nature of package policies.
In this situation specific guidelines applicable to respective sections are to
be followed. Further, in Personal Insurance sentiment and emotions play
a major role. These policies have been designed as user – friendly covers
and a high degree of tact and skill of persuasion is vital in handling such
claims.

1.1 The guidelines given accordingly recommend a broad framework to be

judiciously utilised in day to day operations on merits.

1.2 There are certain special features to be considered in claims under

different types of covers as under

2] Workmen’s compensation Insurance

2.1 In addition to claim form the scrutiny of following documents is required

in all W/C claims :

a) Medical Certificate
b) Wages Statement
c) Proof of age – as recorded by the employer

2.2 Temporary Disablement Claims : requires payment of fortnightly

compensation to the employee directly against proper receipt.

2.3 Permanent Total Disablement Claims : The memorandum of agreement

required to be submitted to W/C Commissioner while depositing
compensation as per W/C act.

2.4 Fatal Claims : Perusal of death certificate and post-mortem report is

important before depositing the amount with W/C Commissioner with
form `A’.

N.B. a) Often Contractor’s workmen or Sub-contractor’s workmen are involved

in an accident. Whether wages for this were separately specified and
whether premium was collected has to be verified.

b) The company is not liable for payment of fines and penalties imposed on
Insured.

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3 ] Personal Accident Insurance

3.1 Generally, the scrutiny of following documents is important whilst

processing all P.A. claims

(a) Duly completed claim form

(b) Report of attending Doctor either as a separate document or on the reverse of
claim form if provision is made thereof
(c) Investigation reports like laboratory test, X-rays and reports essential for
confirmation of the injury,
(d) Police reports, wherever necessary
(e) Certificate of proof of age of dependent child in case the claim is under
education grant provision
(f) Medical bill corresponding to doctors prescription where medical extension is
granted.

Note : Vitamins and tonics are deemed medicines ONLY if prescribed by the
Doctor, as a part of treatment.

3.2 In case of fatal accident cases the following documents need to be

scrutinised.

i) Death certificate
ii) Post-mortem report }
iii) Coroner’s report }
iv) Inquest report } wherever necessary / applicable

NB :
(a) The original documents may be returned only if duly attested xerox copies
are retained.
(b) Bills/ receipts are for company’s records.
(c) In respect of fatal claims the payment is to be made to the assignee named
under the policy. If there is no assignee the payment is made to the legal
representative as identified by Will / Probate / Letter of Administration/
Succession Certificate. Where the above documents are not available and
the amount of claim is upto Rs. 5,00,000/- the following procedure may
be followed :-
(i) an affidavit from the claimant(s) that he/she (they) is (are) the legal
heir(s) of the deceased
(ii) an affidavit from other near relatives of the deceased that they have no
objection if the claim amount is paid to the claimant(s)
(iii) Surety bond executed by persons of reasonable standing
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d) In case of group policy the payment is to be made to the individual
beneficiary only. However, claim payment to the employer in
respect of employee is permissible. Where provision is made for
writing the name of the beneficiary and if Insured organisation
wants payment to be made directly to such beneficiary joint
discharge should be obtained.

e) If in a particular case Doctor certifies that the claimant has lost 30%
use of one limb, in such case claimant would be entitled to 30% of
the compensation payable had he lost use of one entire limb.

f) The policy is to be obtained for cancellation in case of claim

involving death, permanent total disablement, loss of two limbs,
one limb or one eye i.e. wherever capital sum insured becomes
payable.

g) In case of permanent partial disability claim the policy should be obtained

for endorsement for reducing the capital Sum Insured. The weekly
benefit, however, should be based on original C.S.I.

h) For Temporary Total Disablement claims the overall physical condition is

to be considered and not any single criterion.

i) Weekly compensation should not be paid unless the total claim amount is
ascertained and agreed.

j) Claims for exaggerated amount or for claims of doubtful nature the

finding of panel Physician or surgeon be obtained.

4] Mediclaim

The following supporting documents are required for the purpose of scrutiny.

a) Hospitalisation claims :
i) Duly completed claim form
ii) Bills, receipts and discharge certificate/ card from the hospital
iii) Cash memos from the hospital
iv) Bills from chemist(s) supported by proper prescription
v) Receipt and Pathological test reports from a Pathologist supported
by the note from attending medical practitioner/ surgeon
prescribing such pathological tests.
vi) Nature of operation performed and surgeon’s bill and receipt

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 In case of mediclaim claims the receipts and bills need to be original but
copies of treatment papers, diagnostic reports etc. have to be retained after
verification with one originals if the Insured wishes to keep the originals
provided the originals.

b] The following issues may be specially looked into:

I} In case, previous medical history is not shown on discharge
card/narrative summary of the hospital/admission papers of the
hospital should be called for.
Ii} That admission to hospital is not for routine check up
iii} That figures and/or dates of purchase in the cash memos are not
altered by way of erasure superimposition of writing or added writing
with a different ink.
iv} That treatment taken is in line with nature of disease

c] Domiciliary Hospitalisation Claims :

In the case of domiciliary hospitalisation claims, compliance of the

coverage as explained under definition 2.4 of the policy should be
verified.

d] In the case of death of insured after having incurred medical expenses the
amount of admissible claim should be reimbursed to legal representative of
the deceased or any other insured family member submitting original bills,
cash memos etc. after obtaining proper declaration by that person to the
effect that the person claiming reimbursement of expenses actually
incurred such expenses for the treatment of the insured person.

e] On Account payment in mediclaim policy

In exceptional circumstances where the treatment involves high expenses,

on account payment may be considered if dealing office is satisfied about
the admissibility of the claim.

f] Panel doctors

Only such claims where suspicions are aroused in relation to disease

allegedly suffered, linked to pre-existing condition, may be referred to the
doctor, for investigation. Reference to panel doctor/ referee for
investigations should not be made as routine but selectively on merits.

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5] Overseas Mediclaim Insurance

Mercury International Assistance and Claims Ltd., London are claims

settling agents for Overseas Mediclaim Insurance.

5.1 To avoid delay claim form is attached to the policy so that Indian citizens
visiting any part of the World may write to claim settling agency directly.

5.2 In case any claimant has returned to India without submitting their claims
to Mercury, they should be advised to lodge their claims directly to
Mercury or `Tower’ in India.

5.3 Mercury should be informed of specific exclusions under the policy.

5.4 In case any premium cheque is dishonoured information should be sent to

Mercury immediately either by fax or e-mail.

6] Bhavishya Arogya Policy

6.1 The guidelines for mediclaim insurance will generally hold good for this
type of insurance also. However the following aspects are important :

1) Pre-existing condition is not applicable

2) Pre and post hospitalisation expenses are not payable
For any one illness the payment of claim is limited to 40% of original Sum
Insured. The settlement of any claim will reduce the limit
available.

7] Horse Insurance

The following supporting documents are required for processing of claims

i) Duly completed claim form

ii) Veterinary certificate
iii) Valuation of the animal
iv) Post mortem report
v) Pathological tests involving tissue sample
vi) Treatment chart

7.1 On intimation of any accident or illness which is likely to result in a

claim, deployment of veterinary doctor should be considered.
7.2 If animal is killed, whether circumstances necessitated such killing is to be
verified.

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7.3 Mercy killing is considered subject to advance notice
If death is due to operation whether company’s approval was obtained
and additional premium was charged.

8] All Risk Insurance

Claims may be settled on the basis of completed claim form, if settling authority
is satisfied about genuineness of the claim. Surveyor/investigator may be
appointed only if considered necessary.

9] Theft claim

In case of personal effects the invoice/ bill should not be insisted upon but
market value should be the basis of claim settlement.

While final police report should be called for, where it is not forthcoming
within a period of six months of the loss, the claim may be settled on the basis of
First Investigation Report lodged provided other documents are in order.
Indemnity bond is to be obtained before settlement.

10] Baggage Insurance

The above provisions are applicable to claims under this class of insurance also.

11] Burglary Insurance

The following documents are considered important while processing

claims :
i) Duly completed claim form
ii) Final Investigation Report from the police
iii) Survey report
iv) Photographs

11.1 In case of small losses upto a specified amount the dealing office can
arrange for settlement of claim on the basis of completed claim form , G D
entry/First information report registered with the police provided they are
satisfied about the genuineness of the claim.

11.2 It is preferable in cases of burglary/theft which involves assessment of

losses involving checking books of accounts to appoint an investigator
with surveyors licence and knowledge of accounts.

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11.3 Waiver of Final Investigation Report of the police can be considered at the
discretion of the Competent Authority so long as the investigator cum
surveyors’ report does not raise any doubt in regard to the cause and
quantum of loss. Subrogation/ indemnity letter from the Insured is a
must.

12] Money policy

The following documents are considered important while

processing claims :

1) Duly completed claim form

2) Final Investigation Report from the police
3) Survey report

12.1 In case of losses reported from the premises, the procedure to be followed
for settlement of claims is on similar lines as that of burglary policy.

12.2 However, if infidelity of the employee is involved, departmental

proceedings and/or criminal action to be initiated against the erring
employee wherever applicable and such reports to be obtained.

12.3 The limit per sending declared will be the maximum indemnity and
average will not apply if the cash carried is more than the limit intimated.

12.4 Since the policy is on adjustment basis, the annual estimate of carrying
does not have any bearing on the claim.

13] Banker’s indemnity insurance

13.1 The following documents are considered important while processing

claims :

i) Duly completed claim form

ii) First Information Report to the police
iii) Survey report

13.2 The Banker’s Indemnity cover being wide in nature legal opinion may be
sought before settlement of any major and/or doubtful claim in nature.

13.3 Reinstatement of the sum insured : additional premium to be either

collected or deducted from the claim amount.

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13.4 Policy is subject to single reinstatement clause by which the company’s
liability under the policy is restricted to double the sum insured shown in
the policy schedule. Care has to be taken if there are number of claims
under the same policy. Although, forgery of documents is covered under
the policy, it is to be noted that this relates to the specified documents only
issued by the bank and none-other. Policy does not cover claim involving
losses prior to retroactive date. In case of change in Insurer, fresh
retroactive date is applied or effected.

14] Jewellers Block Insurance

The following documents are considered important for processing claims :

i) Duly completed claim form
ii) First Information Report from police
iii) Survey report

14.1 Most of the losses reported under this class of business relate to hold-up,
robbery, theft etc. and hence on receipt of intimation of loss, claim form
may be obtained and also contents of First Information Report verified
and a competent surveyor conversant with the trade deputed.

14.2 For recovery of insured property when it is in the custody of police or

court authorities, attempt should be made to approach the concerned
authorities by appointing a lawyer. This matter is required to be pursued
with regular intervals particularly in view of nature of commodity
involved.

14.3 Furthermore, claim settling authority may consider availing of services of

expert valuer/ advocate/ surveyor of diamond and/ or jewellery while
taking delivery of property.

15] Fidelity Guarantee Insurance

Processing of claim shall be considered based on the completed claim

form, survey report and/or investigator’s report and Final Investigation
Report. It is necessary to verify with the employer whether any amount
is due to the defaulting employee which can be withheld by the employer
and adjusted against the claim. However, final investigation report may
be waived where the surveyor and/or investigator have not raised any
doubt as to the cause and quantum of loss. Settlement of claim to be
effected after obtaining letter of indemnity/ subrogation from the Insured.
Where departmental inquiry by the employer has established guilt of the
employee and assessment report is clean, settlement may be effected
..26
 after suitable indemnity/ subrogation letter is received from the Insured
without waiting for the outcome of any criminal action pending in any
court of law.

16] Shopkeeper’s Insurance policy

This is a package policy providing various covers such as Fire, Burglary,

Cash-in-transit, PA and/or liability. Depending on the section under
which the claim is lodged the procedure for settlement of claims for that
specified class of risk as given in the guidelines may be followed.

17] Householder’s Comprehensive policy

17.1 The procedure for settlement of claims in respect of each specified class of
risk like Fire, Burglary, Cash-in transit etc. under the policy would be the
same for that specified class of risk given in the guidelines.

17.2 Where claims under Personal insurance involving articles of daily use
liable to depreciation are involved, it would be in order to accept the
present day replacement value with reasonable depreciation for a period
of use and it may be taken as a fair measure of indemnity subject to
adequacy of the sum insured individually and collectively as the case may
be. For such items, purchase vouchers/ cash memo need not be insisted
upon.

..27
 LIABILITY
INSURANCE

..28
 LIABILITY INSURANCE

1. PREAMBLE:

1.1 Liability insurance is of comparatively modern origin. The need arises on

account of increased awareness of legal rights following death, injuries,
loss or damage, wither tangible or intangible and also the availability of
free legal aid in many cases as well as setting up of Statutory bodies like
Consumer Forums, etc. This is added by the greater complexity of
modern living and development of residential complexes around
Industrial belts in particular, thus increasing the impact of accidents.

1.2 Liability Insurance comprises covers issued under :

(a) Public Liability Insurance Act, 1991 -

(b) Market Agreement for :
 Public liability Insurance for Industrial Risks
 Public Liability Insurance for non-industrial risks
 Product Liability Insurance
 Professional Indemnity Insurance for Doctors, Medical
Establishments, Architects, Solicitors, Chartered Accountants,
Consulting Engineers, Financial Consultants, etc.

1.3 In addition other Liability Policies like Carriers’ Liability, Specific

Liabilities as part of package Policies like Householders’ Comprehensive,
Shopkeepers, LPG (Traders’ Combined), Couriers Liability, Libel, Freight
Consolidators Liability, Stevedores’ Liability, Inland Vessels Act Liability
are also issued.

This list is not exhaustive and policies covering other specific types of
Liability may also be issued.

1.4 In claims under Liability Insurance Policies there has first to be a claim on
the insured by a third party, followed by a claim by the insured on the
Insurance Company. It is essential that the insured is legally liable to the
third party for a claim to be considered under the Insurance Policy. It is,
however, not necessary that the policy will pay for all claims that the
insured is liable to the third party. There are various provisions,
exceptions and conditions under the policy which may negate or reduce
the Insurer’s liability as compared to the insured’s liability to the third
party.

..29
1.5 Liability to Third Party may arise out of :

(a) Tort or Common law

(b) Contract
(c) Statute

The remedy is payment of damages.

Tort involves breach of duty. Tort may be of various kinds like

negligence, nuisance, trespass, slander, assault, etc. As regards Liability
arising out of Contract, it is liability assumed by the insured by agreement
and which would not have attached in the absence of such agreement.
This is not covered in the normal course.

The Statutory Liability arises out of various legislations / acts like Public
Liability Insurance Act 1991, Inland Vessel Act 1917 etc.

1.6 Market Agreement Liability Policies are issued on “Claims made” basis.

A} Claims-made policies represent a relatively new concept in Liability

underwriting and contain certain special terms like “retroactive date”,
“policy period”, “period of insurance” etc. and provision for “Claims
Series”, “Extended Reporting” and “Notification extention” etc. It is
therefore recommended that thorough familiarity with the claim made
concept and relevant policy conditions is attained before attempting to
handle claims thereunder.

B} However Policies which are issued outside the provisions of the

Market Agreement may be on :losses occurring” basis as also
liability sections incorporated in Non/liability Policies such as
Householders Comprehensive, etc.

Public Liability Insurance Act Policies are governed by a Tariff and issued
on “occurrence” basis.

1.7 Liability Policies are policies of Indemnity and insure the legal liability of
the insured to pay compensation in respect of

(a) Injury, which means death, bodily injury, illness or disease of or to

any person and
(b) Damage, which means loss of possession or control of or actual
destruction (whether full or partial) to tangible property and
(c) Pecuniary Loss
..30
1.8 The Policy pays claimant’s costs, fees and expenses incurred with insurer’s
consent in defending any claim made against the insured. However, these
are payable within the limit of liability, unless otherwise specified.

2. INTIMATION OF EVENT:

2.1 Upon intimation of the happening of an event which may give rise to a
claim under the policy, the Claim Handling office has to check the
following:

(a) Whether Sec. 64-VB of the Insurance Act has been complied with by
the insured affecting in particular the retroactive date.

(b) Whether the accident has occurred during the period of insurance
and the claim is made during the policy period or within 90 days
from the date of expiry in the event of non-renewal or cancellation
of the policy.

(c) Limit of Indemnity applicable under the policy.

2.2 The Claim Handling Office should also immediately call for full details of
the event (if not already provided) and depending upon the circumstances
and extent of injuries/loss reported to have been caused may also appoint
an independent/ in-house agency “without prejudice” to verify the facts
and collect all evidences for defence in a discreet manner without alerting
the affected parties or other agencies to lodge claim which otherwise may
not have been lodged.

2.3 Simultaneously, the insured is also to be advised to pass on to the insurer

any notice of claim that may be received without admitting liability.

2.4 The Investigator’s Report and the connected documents may be preserved
at the Claim Handling Office till a regular claim is preferred by the
claimant against the insured. Thereafter, the general procedure as
described below may be followed in dealing with the claim.

3. CLAIMS PROCESSING:
3.1 On receipt of claim intimation, the procedure as enumerated under 2.1
and 2.2 above may be followed.
3.2 In cases wherein notices or summons are received directly from the court
whether or not any intimation has been made by the insured, a competent
advocate should be engaged to defend the case effectively. Generally,
..31
 defence is taken on lack of privity of contract between the claimants and
the insurer, as the insurer is liable to indemnify the insured only subject to
the terms and condition of policy of insurance.

3.3 It is also to be verified whether the claim is barred by limitation placed by

statute or by policy conditions.

4. DOCUMENTS:

4.1 Depending on individual circumstance, reliance may be placed on the

following documents and information/appropriate:

(a) Detailed version about the incident / alleged misfeasance

(b) Details of loss caused/injury/death/property damage including all

available information on victims as well as estimated quantum of
liability.

(c) Steps taken by the insured to mitigate the loss.

(d) Statements from witnesses, sketch plans, photographs, visual

records of evidence/circumstance, video, etc.

(e) Any other evidence in support of claim

(f) Press reports

(g) FIR/Investigation report of Police

(h) Survey/Investigation Report; Survey Report on the damaged

property of some other surveyor, if any

(i) All notices/summons of the court

(j) Weather (Meteorological) report.

(k) Pollution Control Board Report

(l) Post Mortem Report/Medical Certificate

(m) Consumer Action Group/Society/Group representation/Report

(n) Details of other Insurance

..32
 (o) Legal opinion/ Expert’s opinion on admission of liability / appeal

(p) Details of claims, if any, preferred by the affected party / insured

for the same loss from any other source.

(q) Evidence of legal liability of the insured.

4.2 If the legal opinion expresses the likelihood of liability being pinned on
the insurer in terms of the policy all possibilities must be explored for out
of court/compromised settlement. This will ensure expeditious
settlement, avoidance of possibly large/huge liability and adverse
publicity.

4.3 In the event of an Award being passed by the appropriate authority, a

copy of the Award may be obtained immediately. A legal opinion may
thereafter be obtained and the merits of the case examined as to whether it
is worthwhile going in for appeal.

5. FACTORS TO BE CONSIDERED WHILE DETERMINING LIABILITY

5.1 Property Damages:

(a) Nature and extent of loss/damage, valuation, depreciation

(b) Contributory negligence
(c) Loss of use, loss of profits, increased cost of working, etc. as
claimed.
(d) Recovery Rights

5.2 Bodily Injury / Death:

(a) Age, Occupation, Status, Income, Dependency, Age of the

dependents, etc.
(b) Succession/Legal Heir Certificate as may be applicable
(c) Percentage of disability supported by Medical Certificate
(d) Nature and extent of injuries as certified by medical authorities.
(e) Contributory negligence

5.3 Pecuniary Loss:

Thorough scrutiny and verification, if necessary, with assistance of

independent experts of all the circumstances and factors claimed to be
responsible for such pecuniary loss. It should be ensured that the experts
..33
 appointed are fully conversant with technicalities, professional and trade
practices related to the field of investigation.

6. SPECIAL FEATURES TO BE CONSIDERED FOR CERTAIN LIABILITY

CLAIMS

6.1 Product Liability:

(a) Whether the item is covered under the policy

(b) Date of sale vis-a-vis the retroactive date
(c) Whether quality control measures as prescribed had been fully
complied with by the insured.
(d) Whether manufacturing defect in product is established.
(e) Whether specific instructions for use given by insured, if any, have
been complied with or not.
(f) Whether Vendors’ Liability covered and claim has arisen
thereunder.
(g) Specialists/Experts to be engaged to determine whether product is
defective
(h) Collaborators’ Liability
(i) Whether compromised settlement is worthwhile.
(j) Recovery Rights, if any.
(k) Loss Minimisation Measures - recall; stoppage of sale/destruction
of the concerned product.

Where claims arise in a foreign county, it is usual to appoint claims

settling agents overseas who are conversant with handling such claim in
the country in which they have occurred and follow their advices.

6.2 Public Liability Act Policy :

6.2.1 ‘No fault’ Liability provisions as incorporated in the Public Liability

Insurance Act, 1991 are in the nature of social welfare measure. The Act
Liability claims have to be expeditiously settled and neither the insurer
nor the advocates appointed need contest where it is established that the
claim is payable as per the provisions of the Act.

..34
6.2.2 The following documents have a bearing in the event of a claim :

(a) Letter from the insured narrating the circumstance leading to the
claim scenario

(b) F.I.R

(c) Post Mortem Report or death Certificate, wherever applicable

(d) Medical Certificate in case of permanent disability / injury

(e) Details of Property damaged.

6.2.3 On receipt of notice from the Collector, representation should be made on

behalf of the insured as well as the insurer before the Collector.

6.2.4 On receipt of the copy of the Award from the Collector, the same should
be satisfied within the time stipulated by the Act.

6.2.5 Where the Collector has given the Award but the liability does not,
however, strictly fall within the purview of the PLI Act Policy, a
competent advocate should immediately be consulted for further course
of action. However it must be borne in mind that Act allows a period of
30 days, calculated from the date of award for its satisfaction and speed in
follow-up action is therefore of essence.

6.3 Carriers’ Legal Liability

6.3.1 Scope of cover should be looked into i.e. whether wider or basic - verify
whether the claim falls within the purview of the policy.

6.3.2 To verify admission of liability under Own Damage Section of Motor

Policy

6.3.3 To verify the lorry receipt, Invoice and ascertain whether the consignment
is the subject matter of the transit.

6.3.4 To appoint surveyor to assess the loss

6.3.5 To obtain F.I.R. copy

7. Following are some of the claims which may arise under various Liability
Polices. Apart from the guidelines enumerated above the aspects noted
hereunder may also be looked into.

..35
7.1 Claims on Food & Beverage, Drugs and Medicines

7.1.1 Whether the sample of suspected product is given for analysis

7.1.2 Whether complaint reported to Public Authority

7.1.3 Date of manufacture/Sale of product/Date of expiry/Details of product

life.

7.1.4 Special instructions, if any, notified for consumption of the product -

whether complied with or not.

7.1.5 Details of preparation of product, by whom, how packed transported and

sold.

7.1.6 Whether foreigners involved, if so, details.

..36
MARINE CARGO

..37
 MARINE CARGO

DOCUMENTATION TO SUPPORT CLAIMS

EX : Ship, Air port, Multimodal Transport

1. Documents generally required for settlement of various types of claims

are as under.

1.1 General

i. Original insurance policy/declaration under the open policy duly

endorsed by the insured. A letter of indemnity may be furnished if the
original is lost.

ii. Original or a signed coy of sale invoice along with packing list wherever
available.

iii. Signed copy of Bill of Lading (in case of sea voyage)/ Air Consignment
Note (for air cargo/MTD/CTD (for multimodal transport)/postal receipt
for sendings by post.

iv. Triplicate or exchange control copy of Bill of Entry (to facilitate

verification of the date of filing to ascertain whether there has been any
delay and also to check duty payment details).

v. In case of General Average, G. A. Guarantee and Counter Guarantee or

original Cash Deposit Receipt with Letter of Transfer as the case may be.
Reference be made to the separate para on G.A.

vi. Letter of Subrogation duly stamped and executed (only where recovery
from carriers/other third parties is possible).

vii. Special Power of Attorney (wherever recovery from Railway/other

carriers is involved. In other cases as required)

viii. Lost Over board Certificate where loss has taken place during
loading/unloading.

ix. Copies of claim notice served on carriers and correspondence exchanged

with them along with the Registered A/D cards or any other valid
evidence of service of claim notice within the statutory time limits.

..38
1.2 In case of shortlanding/non-delivery of complete consignment :

Full set of original Bill of lading/Air Consignment Note/Postal Receipt,

etc. as applicable endorsed in favour of insurers. The original contract of
affreightment should be endorsed by the carrier confirming
shortlanding/non-delivery of the entire consignment by them or with a
separate shortlanding/non-delivery certificate. An undertaking to be
obtained from the claimant that he would take delivery of the cargo, if
traced, under an insurance survey.

1.3 In case of partial non-delivery/shortlanding :

Non-delivery and/or landed but missing certificate from the sea-air/CTO

carrier/postal authority/Port Trust, as applicable.

1.4 In case of partial loss or damage :

a. Assessment report by sea/air/CTO carrier/postal authority

b. Survey Report of independent surveyor (if survey has not been waived)

c. Claim form/claim bill

1.5 In case of a consignor’s claim to be settled in India for export shipment,

Banker’s Certificate confirming non-receipt of export proceeds in India in
an approved manner.

1.6 Non-delivery (shortlanding or landed but missing)

1.6.1 Specific documentation - The claimant should be requested to apply for

either shortlanding certificate or landed but missing certificate from the
port authorities or the steamer company within the period allowed under
statute/Port Rules. When the short landing or landed but missing
certificate is obtained, the claimant should be asked to send notice to the
carrier or the Port authorities, as the same may be for the value of the lost
cargo (CIF value and/or duty and/or profit) and obtain their
acknowledgment. A claim on the carrier or the port authorities should be
accompanied by

i. Original of shortlanding or landed but missing certificate.

ii. Copy of Bill of Lading

..39
 iii. Copy of invoice

1.6.2 Individuals or agencies specialised in the work of tracing missing cargo

should be engaged to trace the missing cargo of high values. Where such
certificates are not forthcoming in time, notice to carriers and port
authorities etc. must be served by the claimant within the statutory time
limits for the value of cargo not received.

1.7 Total and/or constructive total loss

where total and/or constructive total loss of the cargo has been caused
whilst in the custody of the steamer company or port authorities :

i. Copy of valued claim on the carrier/port authorities (as the case

may be ) and acknowledgement thereof.
ii Notice of abandonment in case of C.T.L. to customs authorities
iii. Open assessment/delivery certificate/ ship survey report.

1.8 Particular Average partial loss i.e. theft, pilferage, shortage and other
damages (in cases where loss or damage is reported before clearance
from the dock) :

i. Steamer/port survey report

ii. Customs examination certificate before clearance of consignment

from docks.

iii. Independent survey report.

As regards claim for shortage from externally sound cases, it is essential to

ask claimants to refer the matter to their suppliers about the possibility of
shortpacking at their end. Only on receipt of confirmation from the
suppliers about correct packing as per invoice, further processing of claim
on merits should be done. Surveyors should be asked to examine whether
there was sufficient empty space in the case to hold the missing items or
whether the missing items were replaced by some foreign materials by
comparing the weight of consignment stated in the invoice/packing list
with the package received at the destination in order to determine skillful
pilferage in transit. It may also be checked as to whether the missing
items had been extracted by Customs for examination or other purposes.

..40
 2. Claim under Duty and Increased Value Insurance Policy :

In the case of certified shortlanding, no duty is payable. Claims other than

shortlanding have to be scrutinized with due regard to the basis of duty
insurance and may be authorised for payment for the actual value of the
loss including the actual customs duty paid but not exceeding the
proportionate insured value on duty.

2.1 As regards Increased Value Insurance, the claim would be payable for
proportionate increased value insured under the policy as per the
Increased Value Insurance Clause.

2.2 As provided in the duty insurance clause a claim under ‘duty’ /increased
value’ policy is admissible only if the loss is admissible in terms of the
cover granted under the marine cargo policy covering the same
consignment. This provision however need not apply to cases where the
CIF is insured overseas due to contractual obligation . Further, if a marine
claim is within the ambit of the policy conditions but declined by the
Insurers for other reasons like non-compliance of Section 64 VB of the
Insurance Act this will not affect the admissibility of the duty claim.
Therefore the claimant is required to furnish to the company proof of
liability for loss under the marine policy as per terms and conditions of the
policy.

2.3. The other documents required are :

i. Original Insurance Duty Policy duly endorsed

ii. Copy of Bill of Lading
iii. Copy of Invoice
iv. Bill of Entry
v. Survey Report
vi. Copies of correspondence exchanged with customs/ carriers
relating to the claim lodged with them.

3. GENERAL AVERAGE

In the event of the steamer company declaring General Average, the

consignees will be called upon by steamer Agents to make a cash deposit
before delivery of the consignment at destination. The consignees should
be asked not to comply with this, without prior written concurrence of the
dealing office. The concurrence can be given after ensuring that Lloyd’s
form of bond or similarly worded form is used and the deposit to be

..41
 collected by the Steamer Company would be credited into a properly
constituted Trust Account jointly with the Average Adjusters.

3.1. In lieu of cash deposit, steamer companies often accept unlimited

guarantee of the Insurance Company covering the goods. As far as
possible the dealing office should arrange for the General Average
Guarantee to be given as per prevailing financial order.

3.2 As soon as any intimation is received regarding GA and any request from
the Insured for issuance of GA Guarantee is received. H.O-Marine Dept.
should be intimated with full details.

3.3 Documents for General Average Claims

1. Original policy or certificate of Insurance duly endorsed

2. Bill of Lading (signed copy)
3. Invoice (original or signed copy)
4. A copy of Notice declaring General Average by the
Shipowner/Agent
5. General Average Deposit Receipt (GADR)on the original Lloyd’s
Form duly endorsed.

(GADR indicates the name of the steamer, details of the casualty, the Bill
of Lading, no the provisional net arrived, value of the Goods, description
of the goods, the name of the GA Adjusters, the amount of the deposit by
the consignees, etc.)

3.4 General Average Guarantee and Counter Guarantee

As an alternative to cash deposit shipowners are willing to accept a

Guarantee from a bank or, if the goods are insured, from the insurers.
Insurers grant this Guarantee on behalf of the insured in terms of which
they agree to pay the General Average Contribution. In such cases, a
Counter Guarantee is obtained from the insured. The Counter Guarantee
is required because the General Average adjustment may be based on a
contributory value of the cargo which may be higher than its insured
value.

3.5 Letter of Transfer

This letter is signed by the consignees whereby they

..42
 i. Surrender their rights in respect of the deposit paid to shipowners
by the insurers;
ii. agree to transfer the deposit amount to the credit of the insurers;
iii. authorise the insurers to receive from the shipowners the difference
between the amount of general average as adjusted and the amount
of the deposit;
iv. undertake to refund to the insurers any sum deducted by the
shipowners from the deposit which may not be recoverable under
the insurance policy; and
v. undertake to repay to the insurers, if the contributory value exceeds
the insured value the proportion of general average applying to
such value.

If it is reported that the General Average act has included sacrifice of

cargo, then the consignee should clear the damaged cargo only after the
General Average Survey is conducted by the ship’s Surveyors.

4 CLAIMS ON CONSIGNMENTS BY RAIL/ROAD

4.1 Claims Documents (Rail/Road)

As in the case of sea/air/multimodal transport/postal claims, the insured
has to furnish evidence of (i) insurance, (ii) transit, (iii) value, and (vi) loss.

The following documents are required to be submitted to insurers in

support of claims under rail/road transit policies :

4.2 General documents :

1. Original policy or certificate of insurance duly endorsed.
2. Invoice (original or copy)/packing list/weight specification.
3. Independent Surveyor’s Report, if any
4. Letter of Subrogation (if recovery is possible)

4.3 Other documents depending on the nature of claim :

1. Original Railway Receipt (Non-delivery cases)
2. Copy of the Railway Receipt (damage claim)
3. Original Consignment Note (Non-delivery cases - Road transit
claims)
4. A copy of the Consignment Note (Damage claim - Road transit
claims)
5. ‘Non-delivery’ or ‘Partial delivery’ certificate from the
Railways/Road Transport operators.
6. Open Delivery/Assessment Delivery certificate (Rail/Road)

..43
 7. Certified copy of the Remarks in the Railway Delivery Book
(Damage Claims)
8. Certified copy of the remarks in the delivery challan (Road Transit
Claims)
9. Copy of (a) Notice of claim lodged on the carriers (Rail/Road)
(b) Acknowledgement
(c) Subsequent correspondence with the carriers.
10. Special Power of Attorney (Rail Transit Claims)
11. Letter of Authority (Rail Transit Claims)

5 STATUTORY TIME LIMITS FOR LODGING CLAIM AND FOR FILING SUITS:

The following list is indicative which are liable to change from time to
time as per law and companies should act on the actual positions at law at
the material time in each case.

Time limit For filing claims Filing Suit

Negligent Party
Major ports 7 days from date of discharge 6 months from date
of discharge
Steamer Company Application for steamer Survey of 1 year from the date
goods should be within 3 days of of discharge.
date of discharge. Notice of claim to
be served as quickly as possible but
definitely within 1 year from the
date of discharge.
*Where CTD is issued * *9 months from the
date of discharge.
Or as applicable at
the material time
Customs Authority Refund of Duty should be claimed
within 6 months from date of
payment of duty.
Air Carriers (Domestic) 7 days from the date of delivery in 2 years from date of
the case of damage/shortage, 14 booking or the date
days from date of booking in case of of arrival of aircraft
non-delivery. (as applicable).
Air Carriers 14 days and 21 days respectively for
(International) above circumstances ---- do ----
Railways 6 months from date of booking 3 years from date of
delivery of damaged
goods or the date
when delivery
ought to have been
given (as applicable)

..44
 Road Carriers 6 months from knowledge of
loss/date of transport receipt (as ---- do ----
applicable)
Postal Authorities 1 month from date of delivery 3 years from date of
in case of shortage/damage. 3 booking.
months from booking in case of
non-delivery.

* This is only indicative as the actual legal position in the country relating to
multimodal transport is not clear. Hence expert legal opinion may be obtained for
ensuring recover.

..45
MARINE HULL

..46
 MARINE HULL

1. INTRODUCTION

1.1) For the sake of convenience and also in view of the different nature of
deployment, operations and hazards encountered, for the purpose of these
guidelines Marine Hulls are divided into three groups viz;

A) Oceangoing vessels and other vessels rated exclusively by the Tariff

Advisory Committee.

B) Vessels insured under Builder’s Risks policies, Ship Repairer’s Liability

Policies, ship Breaking Policies and Charterer’s Liability Policies.

C) All vessels and/or operations for which rates have been provided in
Marine Hull Manual under specific Tariffs or otherwise and all other
vessels/operations not covered by (A) and (B) above.

1.2) The types of claims which occur in connection with Hull Insurance are

i) Total Loss/Constructive Total Loss ;

ii) Particular Average/Particular charges i.e. Partial Losses/Expenses;

iii Salvage and Salvage Charges - either Salvage Awards or Salvage

under contract;

iv General Average

v Collision Liability

vi Sue & Labour Charges

vii Liability and non-liability Claims (such as wreck removal) falling

under the P & I Section of the policy where such cover is granted ;

viii Personal Accident Claims for crew covered under Sailing/Fishing

vessels Tariffs.

1.3) Notwithstanding the expertise available in Company, the following claims

should generally be considered for reference to professional Average
Adjusters :

..47
 i All Claims falling under Category 1.1 “A” unless the claim involved is
straightforward and also for a nominal amount.

ii a) GA or GA/PA claims on vessels under Category 1.1 “C”

b) Collision Liability claims requiring cross Liability adjustment in
respect of risk falling under Category 1.1 “B” and “C”

Though selection of Average Adjusters is prerogative of the Hull Owners

they should be advised to engage adjusters who have established offices in
India as far as possible.

2. PROCEDURE

A) Oceangoing Vessels

In view of :

a) nature and quantum of claims likely to arise under this category;

b) likelihood of occurrence of loss in distant foreign waters;

c) involvement of Laws and Practices of foreign jurisdictions, and,

d) involvement of foreign professional and/or firms like surveyors, repair

yards, adjusters, solicitors, arbitrators, Courts, etc.

The current system of processing these claims in accordance with the

international practices and traditions will continue except in so far as the
provisions of the Indian Statutes are concerned.

B) Sundry Hulls (Refer 1.1(C) including Sailing vessels, Fishing vessels,

Inland vessels, etc.)

i) While a Licensed Surveyor should be appointed in all cases of Partial

Losses/Expenses, such licensed Surveyor is to be appointed in case of
TL/CTL only where the vessel or its wreck, of reasonable value is
available for inspection or making reasonable attempt to salvage. Refer
2.2 of General Guidelines.

ii) On receipt of loss intimation a letter may be written “on without

prejudice” basis to the insured advising about the appointment of
Surveyor and/or Investigator requesting the insured to render full co-

..48
 operation to the Surveyor/Investigator appointed and also to return
the claim form duly completed and signed.

iii) Notice of Abandonment of the vessel/wreck in writing is a pre-

requisite for a Constructive Total Loss Claim. As a matter of practice,
insurers must decline, prima facie, acceptance of the Notice of
Abandonment. However, Insurers’ refusal to accept Abandonment
does not legally prejudice the insured’s claim for a CTL once the
Notice of Abandonment has been issued by him and received by the
Insurer. Notwithstanding this the Insurer must still refuse acceptance
of abandonment of the wreck till the probable liabilities attaching to
the wreck (Port and other dues, statutory requirement of wreck
removal in case of vessel sunk in navigable channel ; etc.) are
reasonably estimated or considered.

iv) Total loss claim can be settled on the basis of the statements and
documents, as also the Investigator’s/Surveyor’s report as the case
may be if the circumstances are found to be reasonably acceptable. As
per Marine Insurance Act, following acceptance of a claim for Total
Loss of a vessel, the insurers become entitled to the wreck or the
proceeds thereof, if any. However, before enforcing such
entitlement,it is advisable to ascertain whether or not any liability,
statutory or other wise, is reasonably likely to attach to such wreck or
proceeds thereof.

v) Since Marine Hull Policy is issued for a composite sum insured,

representing the aggregate values of Hull and Machinery and
showing Hull or Machinery value separately in the policy being
prohibited, no claim for Total or Constructive Total Loss can be
considered for settlement on the basis of and on account of either Hull
or Machinery value alone.

vi) In case of Partial Loss, as far as possible, efforts should be made by the
Surveyors to achieve assessment net of salvage, if any, because it is
difficult and very often not economical for the Underwriters to get
involved in salvage take-over and disposal. However, where this is
not possible, arrangements should be made to take over the salvage
from the insured before the settlement of the claim and it should be
disposed of as early as possible as per the guidelines for disposal of
salvage.

..49
 vii) Claims occurring in foreign waters should be dealt with in the same
manner as in the case of Oceangoing vessels.

3. PROCESSING OF CLAIM AND DOCUMENTATION

3.1) The documents required for settlement of Sundry Hull claims are:

i) A final Survey Report inter-alia incorporating the following:

a. Name of the registered owner of the vessel

b. Identity of the vessel including registration details. Licence

particulars including validity thereof wherever applicable.

c. The details of loss suffered;

d. The Surveyor’s observation on the alleged circumstances of the

loss;

e. The reasonable probability of the alleged circumstances giving

rise to
the losses noticed and/or claimed;

f. Quantification of repairs/replacement cost, Salvage, Sue and

Labour etc. where applicable.

g. Cause of loss as per the Perils Clause of the policy.

h. Confirmation of class if applicable.

i. Confirmation on compliance with Conditions and Warranties

relating to Trading, Weather, Lay up, Watch and Ward etc., and
also the provisions of the applicable statutes.

j. Adequacy of sum insured for G.A, Salvage, Sue &Labour,

Collision liability claims etc.

k. In case of total loss claims, specific recommendations of the

surveyors whether the claim is actual total loss or constructive
total loss with reasons.

..50
 l. Comments as to the direction, speed and angle of blow in
respect of collision claim together with opinion on degree of
blame attaching to each vessel.

m. Photographs of the wreck, salvage operations, Sue and Labour

etc. wherever practicable.

ii) Copy of Certificate of Registration and License, if any, issued by the

concerned authorities;

iii) Original of the Certificate/Letter of Cancellation of Registration of

vessel in respect of Total Loss claims.

iv) Weather Report for the relevant place, date and time from the
competent authority in case Adverse Weather Warranty is
involved;

v) Affidavits and/or statements by the Owner, Tindal and all

members of the crew separately of the insured vessel and/or
rescuing vessel, if any, made to any authority such as Police,
Magistrate, Notary Public, Port Office, Indian Consulate etc.

vi) Marine Casualty Form issued by Mercantile Marine Department

where applicable.

N.B. - Marine Casualty form is available only if any member of the crew
including Tindal has survived the casualty. If all the crew
members including the Tindal employed in the particular
adventure die due to the casualty or are missing beyond trace, the
Marine Casualty Form is not issued by Mercantile Marine
Department as no statement from any of the crew regarding the
casualty can be recorded by the Department. However, in such
cases, the Mercantile Marine Department issues a certificate
confirming that the casualty has been reported to them.

vii) Police Report for claims within the territorial waters and for SRCC
claims.

viii) The loss should be reported to the Port Authorities if occurring

within the port area.

ix) In view of the localised and small scale operation, ‘Salvage

Charges’ covered under the Fishing Vessels’ policy is to be seen
..51
 differently from that under Ocean-going Vessels’ Policy in as much
as neither the Lloyd’s Open Form for salvage agreement nor any
international professional salvor is ever likely to be involved in
salving such vessels. Therefore, in most of the cases the salvage
services rendered to fishing vessels will be contracted salvage and,
for the purpose of eliminating unnecessary complications, it is
advisable to treat such ‘ Salvage Charges’ as ‘Sue and Labour’ costs
for all practical purposes. It is, however, to be ascertained that the
amounts claimed for such costs are both actually incurred and
judiciously and reasonably incurred as also incurred to avoid or
minimise a loss that would otherwise be admissible under the
policy.

x) In the event of a Total and/or Constructive Total Loss claim being

considered for admission, the original insurance policy duly
discharged by the insured is to be collected. However, where the
original policy is reported to be lost, an appropriate Letter of
Indemnity in lieu thereof should be obtained from the insured.

xi) In the event of a claim for Partial Loss/Expenses, Salvage, Salvage

Charges or Sue and Labour Charges, original repair bills, cash
memos and similar documents duly verified and certified by the
Surveyor as also Salvor’s/diver’s Report where applicable, are to
be furnished. Claims for Sue & Labour Charges may have to be
considered for settlement over and above the TL/CTL claim
settlement. For these also original bills/cash memos in support of
expenses incurred are required.

xii) For claims other than TL / CTL, the applicable deductible should
be first deducted from the total claim amount as provided for in the
clauses attached to and forming part of the policy.

3.2 In addition to the above, the following documents have to be collected for
Sailing vessel claims.
i) Certificate of Inspection
ii) Free Board Certificate before commencement of the voyage;
iii) Cargo Manifest
iv) Load Line Certificate
v) Port Clearance Certificate;

..52
3.3. In case of Fishing Vessels, wherever the provisions of the Merchant
Shipping(Amendment) Act 1983 Part XVA, Section 435A to X are
applicable, the Surveyors should be directed to report on the compliance
thereof.

4. FIXED JETTIES AND PONTOONS

Since these are fixed structures and are included in the Hull Department
more as an extension of the principles of Hull Insurance than for any
other reason, in the event of losses it is advisable to process such claims as
‘Engineering’ claims and proceed accordingly.

However, since some losses may be found to be appropriate to be dealt

with in accordance with the practices of Hull Department, like in the event
of fixed Pontoon getting un-moored accidentally, going adrift and
ultimately sustaining damage or getting stranded/grounded, such claims
should be processed in line with practices of the Hull Department.

Situations which are not explicitly provided for here, should be handled in
consultation with the competent authority/Head Office.

..53
MOTOR OWN
DAMAGE

..54
GUIDELINES FOR SETTLEMENT OF CLAIMS - OWN DAMAGE

1. The documents generally required for settlement of motor claims are

given below. However, depending on the merits of a case, a particular
document may not be necessary or an alternate document could be used
to serve the purpose of the company. However if the competent
authority is satisfied that the loss is genuine and all efforts should be
made to expedite settlement of the claim.

a) Claim Form duly completed

b) Registration certificate
The details usually verified from the RC can instead be obtained
from purchase details of the vehicle if the circumstances so warrant.

c) Driving licence
As per policy condition the driver is required to hold an `effective’
driving licence both in terms of the period of validity and the class
of vehicle that is being driven at the time of the accident.

The MV Act provides for a grace period of 30 days after expiry of

a licence during which period the licence may be accepted as
effective, provided the holder has not been disqualified from
holding a licence.

For loss sustained by parked vehicles, Driving Licence may not be

relevant.

d) Load challan / Trip Sheet

To verify that the load carried was within the permissible limits and
the trip sheet giving the details of number of passengers carried in
the vehicle.

e) Fitness certificate
The Fitness Certificate indicates the roadworthiness of a
commercial vehicle.

f) Report to Police
A copy of First Information Report and Panchanama is required
wherever third parties are involved in an accident.
..55
g) Survey report
i] Surveyor should ascertain the damage, assess the quantum
of payable claim, verify vehicular documents and confirm
that the loss/damage being claimed for is in conformity with
the narration of the accident.

ii] Where replacement of parts is allowed surveyors must

physically verify serial nos. as appearing on major parts
which carry such numbers

2. DAMAGE CLAIMS

2.1 Immediately on receipt of intimation of loss, either in writing or

over telephone, a surveyor should be appointed based on the
estimate of repairs.

2.2 In case of major accident, the insured would be asked to arrange

for photographs of the vehicle at the spot of the accident, showing
all the external damages and the Number Plate of the vehicle. The
photo expenses is to be reimbursed upto Rs. 500/-. Alternatively,
the insured may inform the nearest office of the insurer to arrange
for such photographs.

2.3 DRIVING LICENCE

a] If for any reason, to be specified, the driving licence can not be

produced, the claim may be considered only on non-standard basis.
However, for settlement of such claims the authority should be
vested only with Managers and above in the RO.

b] Where the driving licence is not endorsed for tourist taxes, since
different practices prevail in different states, it is necessary to check
the local practice. The claim is to be treated as standard or non-
standard on the basis of the practice prevailing in the State where
the accident occurs and this will be decided by a Manager and
above in the RO.

2.4 REINSPECTION

If reinspection after repairs is considered necessary it may be

conducted by the same surveyor who has assessed the loss.

..56
2.5 PARTIAL LOSS CLAIMS

2.5.1 Submission of bills/cash memos can be dispensed with for claims

upto Rs. 50,000/- in respect of private cars and two wheelers only,
subject to

a] the survey report correctly indicating the cost of parts

allowed for replacement;

b] Claims being settled on the basis of a report of reinspection

after repairs by the surveyor, certifying that the repairs and
replacements have been carried out as per assessment.

For other classes of vehicles bills/cash memos have to be obtained

and verified.

2.5.2 If surveyor confirms replacement of the engine and chassis if

allowed for replacement and indicates the new numbers, claims
may be settled whilst simultaneously advising the insured that

a] As per the provisions of the Motor Vehicles Act, the new

numbers have to be incorporated in the RC book.

b] Insurance company be informed about the incorporation of

the new numbers in the RC book for endorsing on the policy
document to facilitate settlement of future claims.

2.6 TOTAL LOSS :

a] Where the vehicle is totally damaged or when the net cost of

repairs is almost close to the Market Value or the IEV the
claim could be considered to be a total loss. Such total loss
claims should be encouraged on net of salvage basis i.e.
salvage being retained by the Insured and an appropriate
amount towards salvage value as determined by the surveyor
in consultation with the company be deducted from the Total
Loss amount.

b] However, if the insured refuses to retain the salvage,

arrangements should be made for the safe custody of the
damaged vehicle to prevent further loss or damage. The
R.T.O should be informed by Registered A.D. Post . An
inventory of the major parts should be taken before taking
..57
 possession of the vehicle. Immediate steps thereafter should
also be taken for its disposal as per the Company's guidelines
for disposal of salvage.

3. THEFT CLAIMS

3.1 Partial Loss due to Theft –

Theft of parts/accessories from a vehicle should be reported to the

police immediately by the insured. If parts are found missing or
changed after recovery of stolen vehicle this be recorded in
panchanama/recovery memo. Final police Investigation report will
also be required. However, if the competent authority is satisfied
about the genuiness of the loss, final investigation report may be
waived provided the insured sends a registered A/D letter to the
SP/ACP requesting that the Insurer should be informed of any
recovery.

3.2 Total Loss due to Theft -

Unless the claims settling authority is fully satisfied investigation of

the theft is to be arranged by an investigator who may be appointed
with specific terms of reference.

3.3 The following documents should be collected from the insured in

addition to a certified copy of the First Information Report, for
considering "on account" payment of the admissible claim after
expiry of 90 days from the date of loss.

(i) Surrender of the Registration Book and the Tax Book to the
insurer duly transferred in the name of the insurers. The RTO is
to be informed about the theft of the vehicle and this should
be entered in Tax book so that further tax will not accrue.
(ii) Letter of Indemnity and Subrogation.
(iii) Ignition keys of the car.
(iv) Certificate of Insurance and the original insurance policy, if not
stolen with the vehicle.
(v) Specially worded discharge voucher

3.4 The balance payment may be released on receipt of the Final Police
Investigation Report or on expiry of a suitable waiting period from
the date of the `on account' payment, after obtaining the discharge
voucher in full and final settlement of the claim.
..58
3.5 The Police and the Registration authorities and the NCRB should be
notified in writing about disposal of the claim on `Total Loss' basis
following theft of the vehicle. They should be requested to advise
the Company if the vehicle is recovered subsequently. Immediately
after receipt of advice from the Police regarding recovery of the
vehicle, necessary steps for taking possession of the vehicle from the
Police custody should be taken and, if necessary, an advocate
should be appointed for filing recovery application in the court.

3.6 Municipal Authorities, where applicable, and the R.T.O. should be

advised by Registered Letter with Acknowledgement Due to record
`non use' of the vehicle on account of theft and about the
cancellation of the Insurance Certificate.

3.7 If the vehicle is recovered subsequently the Insured will have the
option to repay the claim amount already paid and retain the
recovered vehicle. If the vehicle is found damaged, the Insured will
be indemnified against loss of or damage. The Insured should be
advised to obtain a recovery memo from the Police and to get the
vehicle surveyed at the Police Station before taking delivery, as
mentioned under partial loss theft claims.

3.8 In cases of criminal breach of trust each case should be dealt with on
individual basis depending upon facts of each case and subject to
legal opinion.

..59
MOTOR THIRD
PARTY

..60
 MOTOR THIRD PARTY CLAIMS -

THIRD PARTY BODILY INJURY CLAIMS: (Fatal and Non fatal)

1. INTIMATION OF CLAIM :
Intimation about an accident resulting into third party claim is
received through various sources :-

(a) Insured
i] directly
ii] by mention in passing whilst lodging own damage claim
(b) Claimant
(c) MACT/Courts by notice
(d) Through accident report from police in Form – 54 prescribed under
Central Motor Vehicles Rules 1989.

2. INVESTIGATION: Investigation about the accident to collect the

relevant data to quantify reasonable and just compensation as per
the formats enclosed in respect of all Third Party Claims is
mandatory. The Companies should ensure that this investigation
helps the Insurance Company in finalising out of court settlement
at the earliest..

3. APPOINTMENT OF ADVOCATE :
On receipt of notice from the MACT a competent advocate from the
panel may be appointed if necessary. The following relevant
documents and information should be given to him/ her immediately
to enable him/ her to draft written statement (w/s) on behalf of the
Company and ensure that proper defence is taken where necessary and
no frivolous statements are made.

4. POLICY COPY:
Duly certified true copy of the complete policy with the relevant clauses
and endorsements as actually attached with the original issued covering
the vehicle at the material time of accident.

5. DRIVING LICENCE :
In case, it has been observed that driver was not duly licensed the
necessary intimation should be given to the advocate. Though under
section 149(2) of the M.V. act, 1988, Insurance company has no liability if
the driver is not duly licensed, the onus to prove that the driver was not

..61
 holding a licence rests on insurance Company and this obligation is
required to be discharged fully to the satisfaction of the court.

6. COMPLIANCE OF POLICY CONDITIONS:

If a Breach of a specific policy condition has been observed it should be
brought to the notice of the Advocate to enable proper defence if possible.

7.a. Written Statement on behalf of Insurance Company incorporating all

defenses available as enumerated under Section 149 of M. V. Act, 1988
should be promptly filed.

7.b. Wherever necessary when there is a collusion between the insured and the
claimants or when the insured fails to defend the claim, the Company’s
Advocate must be instructed to obtain the MACT’s permission under
Section 170 of the Motor Vehicle Act to defend the claim on merits.

8. PAYMENT OF NO FAULT LIABILITY CLAIMS :

If liability under affected policy is established after taking into

consideration the foregoing defences, Company should take immediate
steps to deposit No Fault Liability amount as per Section 140 of the MV
Act 1988.

9. PAYMENT OF FAULT LIABILITY CLAIMS :

Companies must initiate action to settle such claims either through

1] Jald Rahat Yojna
2] Lok Adalats
3] Direct negotiation with the claimant through DICC & RICC

Unless conclusive proofs of defences are available which would

satisfy the Courts there is no point in prolonging the case. Once
an award is passed it should be satisfied immediately on its
pronouncement unless of course decision is taken by the competent
authority to file an appeal against judgement and award. Before
taking a decision it is essential to examine the grounds on which
such appeal can be filed to ensure that a substantial point of law is
involved.

10. JALD RAHAT YOJANA :

Section 152 of M.V. Act, 1988, authorises Insurance Company to settle

Motor Third Party non-fatal bodily injury claims where claimant is an

..62
 adult without claimants taking recourse to MACTs. Industry has already
launched the Scheme since 1991.

11. GUIDELINES FOR PLACING CLAIMS IN LOK ADALATS :

Maximum participation and disposal of large number of claims in Lok

adalat sessions should be ensured.

11.1. Companies should place the claims normally falling within the following
parameters before Lok Adalat:

a} Where occurrence of the accident is within the policy period.

b} Where estimated liability is not expected to be exceeding Rs.

5,00,000/- per application for compensation.

c} Where no substantial point of law is involved.

d} Where no defences are available under Section 149 of the Motor

Vehicles Act, 1988, such as driver not holding effective driving
licence and breach of policy condition relating to limitations as to
use.

e} Where Police Record shows that the driver was holding effective
driving licence.

f} Where despite concerted efforts on the part of the insurance

companies, they are not in a position to prove conclusively to the
satisfaction of the Court that the vehicle was driven by a person not
duly licensed.

g} Since there is a provision of automatic transfer of insurance in

pursuance of Section 157 of Motor Vehicles Act, 1988, the
companies cannot take defence of non-transfer of insurance of the
vehicle on their books. Hence such claims may be placed before
Lok Adalat for disposal.

h} Where more than one vehicle insured with different insurance

companies is involved in an accident resulting into a third party
claim, companies should agree for settlement on 50-50 basis to
apportion the liability between them.

..63
 i} As the present Motor Tariff covers liability in respect of owner of
goods when travelling in the goods carrying vehicle with his own
goods without payment of additional premium, the companies may
place the claims for compensation in respect of such owners before
Lok Adalat.

11.2. Companies should not accept conditional settlement such as subject to

verification of certain documents, production of documents, etc.

11.3. On having reached the agreement for compromise settlement concerned

MACT issues a Consent Order specifying inter alia the period during
which the agreed amount should be deposited. On receipt of such
Consent Order, companies must deposit the amount as agreed to with the
MACT, within 30 days from the date of award as per statute.

11.4. In the event of Lok Adalat for pending appeals before High Courts is
organised, such claims where quantum of compensation is in dispute may
be considered.

11.5. Appeals which are filed to decide a point of law should not be
considered for placing before Lok Adalat.

11.6. Applications for compensation filed by the paid employees may also
be placed before Lok Adalat, whether wider legal liability is covered or
not. In case wider legal liability is not covered under the Motor Policy,
compromise settlement of such claims before Lok adalat may be accepted
provided the quantum of compensation is on par with the compensation
payable under the W.C. Act, and is acceptable to the claimant.

..64
 Annexure 1

Investigation Report
Death claim

D.O Ref No.

A. To be filled by office ( to fill separate form for each individual death)

D.O. ________________ Investigator’s name ________________

Claim /no. _______________ Job entrusted (Date) ________________
Report submitted (Date) _____________

B. To be filled by investigator

Date(s) investigation conducted _________________

Name(s) of persons interviewed _________________
_________________________________________

Particulars of deceased

1. Name ________________________________________

2. Address ________________________________________

3. Age (attach proof) ________________________________________

4. Occupation ________________________________________

5. Income ( attach satisfactory proof) ________________________________

6. Whether Income tax payee/ Govt./ Yes / NO

Semi Govt./ Public Sector/
Public Ltd. Co. employee ( Please specify)

7. Name and address of employer ___________________________________

..65
8. (i) whether retired Yes / No
(ii) If yes, whether authentic proof of Yes / No
Emoluments/ earnings available (please specify)

8.A Income from family business, agriculture, etc.

and the loss, if any

9. Marital status Single / married

10. Dependents/ claimants particulars : (attach proof if possible)

Name Age Married Occupation Relationship (widow, son,

/ Single daughter, father, mother,
others)

11. Date time & place of accident ____________________________________

12. Cause of death ____________________________________

13. Name and address of hospital where treated _________________________

14. Details about involved vehicle & of driver at the time of accident:

i] Ownership of the vehicle – R.C. Book

ii] Owner’s address
iii] Insurance Policy No. and period
iv] Name of Driver
v] Driving Licence particulars.
vi] Fitness certificate in respect of commercial vehicle
vii] Copy of police report
viii] Form 54 if possible

Date : ( Signature of investigator )

..66
 Annexure 2

Investigation Report
Injury claim

D.O Ref No.

A. To be filled by office ( to fill separate form for each individual death)

D.O. ________________ Investigator’s name ________________

Claim /no. _______________ Job entrusted(Date) ________________
Report submitted(Date) _____________

B. To be filled by investigator

Date(s) investigation conducted _________________

Name(s) of persons interviewed _________________
_________________________________________
Have you interviewed injured - Yes/ No

Particulars of injured

1. Name ________________________________________

2. Address ________________________________________

3. Age (attach proof) ________________________________________

4. Occupation (Public sector/ _______________________________________

Govt./ Public Ltd. Co./
Private co./ others)

5. Monthly Earning ( attach proof) ________________________________

6. Name and address of employer ___________________________________

7. Date time & place of accident ____________________________________

..67
8. Nature of injury __________________________________

9. Type of disability __________________________________

10. (a) If permanent loss to ___________________________________

trade or employment
(b) If not, specify nature of __________________________________
injury/ disability

11. Name and address of hospital __________________________________

( govt./ private )

12. Details of hospitalisation/ treatment

Period In patient/ out patient Medical expense

(attach proof)

13. Whether treatment is continuing ____________________________

14. No. of days injured was unable to attend ___________________________

Regular work (attach employers certificate
For absence of duty)

15. Whether injured has medical reimbursement__________________________

facility from employer

16. Whether injured had any disability prior to ________________________

Accident or history of accident/ treatment.

17. Details about involved vehicle & of driver at the time of accident:

i] Ownership of the vehicle – R.C. Book

ii] Owner’s address
iii] Insurance Policy No. and period
iv] Name of Driver
v] Driving Licence particulars.
vi] Fitness certificate in respect of commercial vehicle
vii] Copy of police report
viii] Form 54 if possible

Date : ( Signature of investigator )

..68
DISPOSAL OF SALVAGE

..69
 GUIDELINES FOR DISPOSAL OF SALVAGE

1. As far as possible salvage value should be deducted from the loss amount
and net claim amount paid to insured.

2. If circumstances so require insurer may after consultation dispose of

salvage through surveyor who is required to observe best practices of
business for realising maximum value for the salvage. Such salvage
disposal will be without prejudice to the rights of the insurer as regards
admissibility of the claim.

3 Salvage disposal can be undertaken through auction or by inviting offers.

However, companies may take the help of reputed auctioners or
organisations specialised in such activity.

4 Wherever absolutely necessary the salvage can be collected and disposed

off in lots periodically.

5 Whatever be the mode of disposal of salvage, the value realised should

not be less than the expected value of salvage indicated in the survey
report.

6 The prime consideration before incurring expenditure in disposal of

salvage should be that the cost of disposing should be economical to the
company vis a vis the realisable value of salvage.

7 Where salvage is to be disposed off by the insurer the following procedure

is to be observed.

7.1 Salvage of estimated value upto Rs. 5,000/- other than motor
vehicles may be disposed off by negotiations with local salvage
buyers. In respect of motor vehicles the limits for disposal of
salvage by negotiation will be as under:
a] Scooters/Motor cycles/3 wheelers Rs. 5000
b] Light Motor Vehicles Rs. 15,000
c] Heavy Commercial Vehicles - Rs. 25,000

7.2 Salvage exceeding the above limits but upto an amount of Rs.
50,000 except in case of total loss of 2 wheelers shall be disposed of
by inviting offers from prospective buyers by issuing sale notices to
all the salvage buyers. Atleast 3 offers must be received to process

..70
 the sale. The offers shall be received in wirting before date to be
specified in advance.

7.3 In case of total loss of 2 wheelers and others where the expected
value of salvage is exceeding Rs. 50,000/- but upto Rs. 2 lacs shall
be disposed by inserting a sale notice in one widely circulated daily
newspaper at the centre where the salvage is available for
inspection. The cost of disposing the salvage by means of
advertisement should not be beyond 40% of the salvage expected.
If it is found that it exceeds 40% then the procedure indicated under
7.2 may be adopted.

7.4 For all salvage where the expected value exceeds Rs. 2 lacs the
concerned DO will place a sale notice in more than one newspaper
as may be necessary and which is most likely to be read by the
prospective buyers of the salvage to be disposed off.

8 The sale notices inserted in the press should, inter alia, contain the
following particulars :

8.1 A brief description of the items(s) offered for sale, indicating the
approximate quantity and condition thereof, as also the location
where the same can be inspected by prior arrangement with _____

8.2 The item(s) offered for sale must be strictly on an ‘as is where is basis with
all faults’.

8.3 Offers will be received in sealed covers indicating brief particulars of the
offer on top by the conerned in-charge of Divisional Office/Department
accompanied by Earnest Money Deposit remitted by a Bank Draft/Pay
Order (but not by cheque) drawn in favour of the Company for an amount
not less than 10% of the offer value so as to reach not later than… (date to
be specified).
8.4 Offer received without the requisite Earnest Money Deposit by Bank
Draft/Pay Order will not be considered and will stand automatically
rejected.
8.5 The Earnest Money Deposit will not attract any interest.
8.6 The right to reject any or all of the offers received, without assigning any
reason whatsoever, is to be reserved by the Company.
8.7 From the date of receipt of acceptance of the offer, the successful offerer
must deposit, within fifteen days, the balance of the amount offered (90%
or instalments as agreed upon) and arrange immediate removal of the
goods (the whole or part lots as agreed upon) at his own expense, failing
..71
 which revocation of the acceptance of his offer and forfeiture of the
Earnest Money Deposit should be communicated in writing to the offerer
concerned.
8.8 In the case of Motor Insurance claims, if the vehicles involved are under
‘Superdari’ the fact should be mentioned.

9. Office Procedure

The following procedure is to be strictly observed by the Offices concerned

in dealing with offers for the purchase of salvage received through Press
Advertisements.

* 9.1 A ‘Salvage Committee’ consisting of five or three members is to be

constituted by HO (with the concurrence of General Manager, HO,
Technical Department) for each Regional Office. A similar Committee is
to be constituted by each Regional Office for each of its Divisional Offices.
Offers must be opened by at least three members of the Salvage
Committee where the Committee consists of five members or by two
members where the Committee consists of three members on the specified
date and at the time and place specified for the opening of the offers as
indicated in the Press Advertisements inviting offers.
9.2 No fresh offer is to be accepted in respect of any particular salvage after
the last date for submission of offers as advertised.
9.3 All offers for the purchase of salvage must be opened not later than the
second working day subsequent to the last date specified for the
submission of offers, as advertised in the Press.
9.4 Before opening the covers members of the Committee shall ensure that the
offers were sealed.
9.5 On opening the sealed covers the offer letters will be signed by all
members of the Committee.
9.6 A Note should be prepared immediately giving full details of all offers
received and noting the decision taken either for acceptance of an offer or
rejection of all the offers received.
9.7 The highest offer found reasonable will be accepted. If not negotiations
can be held only with the highest offerer for a reasonable amount. The
recommendation will then be sent to the Competent Authority for
approval.
9.8 Professional integrity and secrecy should be maintained while receiving
offers.
9.9 If for any reason the committee suspects cartelisation by the buyers or foul
play in the form of very low offers than indicated by the surveyor in his
report then the committee can reject the offers and choose the best method
of disposal in the best interests of the company.
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* To fall in line with FSO

10. Modalities for disposal of salvage :

10.1 As soon as a offer is accepted and approved by the Competent Authority

the concerned Office should write to the offerer immediately advising
them of the acceptance of the offer, and showing therein the name of the
offerer, the amount offered, the terms of payment and lifting of the
salvage etc.
10.2 The balance of 90%, or instalments as agreed upon, of the accepted offer
must be deposited by the offerer by a Bank Draft or Pay Order in favour of
the Company within fifteen days form the date of receipt of acceptance of
the offer and the successful offerer must thereafter arrange, at his own
cost, for immediate removal of the entire salvage or in parts/lots as may
have been agreed upon. Sales tax, wherever applicable shall be borne by
the successful offerer.
10.3 It should, however, be borne in mind that, in case the successful offerer
fails/refuses to deposit the full amount as offered by him within the
stipulated period or no response whatsoever is received from him within
fifteen days from the date of communication of the acceptances of his
offer, the Earnest Money deposited by him will stand forfeited and the
offerer submitting the second highest offer will be permitted to lift the
salvage after depositing the full amount offered by him or instalments as
may be agreed upon, within fifteen days from the date of communication
of the acceptance of his offer, provided the difference between the highest
offer and the second highest offer is not more than 15% of the highest offer
and is not less than the expected value of the salvage indicated in the SPR.
10.4 Since the realisable value of perishable commodities viz. Potatoes, fish,
fruits or similar stuff or other items deteriorates very fast, disposal of the
salvage should be undertaken on priority basis, for and on behalf of the
concerned parties without waiting for the liability to be established.
However, the provision of the disposal of salvage guidelines should be
followed.

11. Discretionary power

The CMD/HO ‘Salvage Committee’ shall be empowered to exercise discretionary power

to vary the procedure outlined herein.



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