Table of Contents

Introduction................................................................................................................................3

Library of Clauses......................................................................................................................5

Accumulation Clause.............................................................................................................5

Airfreight Replacement Charges Clause................................................................................5

Attachment & Termination of Risk Clause............................................................................5

Average Clause (applicable to static risks only)....................................................................5

Brands Clause.........................................................................................................................5

Section I: When Vehicle Insured is Damaged or there is a loss.................................................7

1. RISK CLAUSE...............................................................................................................7

2. EXCLUSIONS................................................................................................................7

STRIKES EXCLUSION CLAUSE.......................................................................................8

3. UNFITNESS OFCONTAINER/CONVEYANCE CLAUSE..........................................8

Insured Declared Value..............................................................................................................9

DUTY OF ASSURED CLAUSE...........................................................................................9

Section II: Liability to Third Parties..........................................................................................9

General Exceptions..................................................................................................................11

Conditions................................................................................................................................12

Claim Settlement......................................................................................................................14

Grievance Redressal Procedure................................................................................................14

Important Notice Clause..........................................................................................................14

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 Introduction
The main aim of this project is to draft a policy which takes into consideration as to how
transit should be performed. Transit insurance policy or inland insurance is a simple and
convenient mode of covering the risk of business goods or personal belongings of the insured
while in transit of the land.1 The premium is based on the value of the goods in transit and the
amount of risk the insured is bearing during the period. The insurance is important to secure
goods in transit from one place to another and it caters to the loss caused to goods that are
being carried by an individual through their vehicle or through an employee. 2 This insurance
is a safe and secure way of covering the risk that arises due to the loss or damage caused to
the belongings during transit. The cost of the premium is based on the goods that are in the
transit insurance and the risk the policyholder bears during the policy term.

For the purpose of this paper, 5 Transit Insurance Policies will be analysed and be used in
aiding of creating a new Transit Insurance Policy. The 5 Insurance Policies that are analysed
are:

1. SBI General Insurance: Motor Trade (Road Transit Risks) Insurance Policy
2. HDFC Ergo General Insurance Company: Inland Transit
3. ICICI Lombard: Marine Inland (Single Transit) Insurance Policy
4. TATA AIG: Marine Cargo Policy
5. Lonpac Insurance: Goods in Transit Policy

The Name of the company on which a insurance policy will be drafted is Central Dispatchers
Ltd.

For Consumer Insurance Contracts (Insurance wholly for purposes unrelated to the
Insured’s trade, business or profession)

This Policy is issued in consideration of the payment of premium as specified in the Policy
Schedule and pursuant to the answers given in the Insured’s Proposal Form (or when the
Insured applied for this insurance) and any other disclosures made by the Insured between the
time of submission of the Insured’s Proposal Form (or when the Insured applied for this
insurance) and the time this contract is entered into. The answers and any other disclosures
given by the Insured shall form part of this contract of insurance between the Insured and
1
Transit Insurance - Domestic Transit Insurance | Qian Insurance Broking, https://www.qian.co.in/inland-
transit-insurance (last visited Oct 11, 2023).
2
Transit Insurance | Offices of Risk Management, Compliance, and Internal Audit | The University of Chicago,
https://rmia.uchicago.edu/page/transit-insurance (last visited Oct 11, 2023).

2
Central Dispatchers Ltd (hereinafter called “the Company”). However, in the event of any
pre-contractual misrepresentation made in relation to the Insured’s answers or in any
disclosures given by the Insured, only the remedies in Schedule 9 of the Financial Services
Act 20133 will apply.

This Policy reflects the terms and conditions of the contract of insurance as agreed between
the Insured and the Company.

For Non - Consumer Insurance Contracts (Insurance for purposes related to the
Insured’s trade, business or profession)

This insurance policy, designed for non-consumer insurance contracts, which are meant for
the insured's trade, business, or profession, is issued based on several factors. These factors
include the payment of the specified premium as outlined in the policy schedule and the
information provided by the insured in their proposal form or during the application for this
insurance. Any updates or disclosures made by the insured between the submission of their
proposal form (or application) and the formalization of this contract will also be considered.
The responses and disclosures given by the insured are integral components of this insurance
agreement between the insured and Central Dispatchers Ltd, referred to as "the Company."

If any pre-contractual misrepresentations are discovered concerning the insured's responses

or disclosures, it may lead to various consequences, including the potential nullification of
the insured's insurance contract, refusal or reduction of claims, alterations in the contract's
terms, or even the termination of the insurance agreement.

This policy outlines the terms and conditions of the insurance contract as mutually agreed
upon by the insured and the Company. The Company commits to providing coverage to the
insured, subject to the terms, conditions, and exceptions mentioned in this policy, as well as
any endorsements or attachments that are part of this policy. If, after the premium payment
and during the insurance period indicated in the attached schedule or any subsequent periods
(if applicable), for which the insured has paid the required renewal amount, any of the
described properties in the attached schedule are lost, damaged, or destroyed due to the
insured perils listed in the attached schedule while within or in transit between the specified
territories, or while being loaded, carried, or temporarily housed on the specified conveyance
as mentioned in the attached schedule, the Company will either pay for the loss, repair the
damage, reinstate, or replace the property, at its discretion.
3
S9 Schedule 9 of the Financial Services Act 2013.

3
 Library of Clauses
Accumulation Clause
If interest accumulates beyond the specified limits due to interruptions in transit,
unforeseeable events beyond the Assured's control, casualties, transshipment points, or on a
connecting vessel or conveyance, it is agreed that this excess interest is included in this
coverage. However, the insurer's liability is capped at a maximum of twice the conveyance
limits outlined in this policy.
Airfreight Replacement Charges Clause
If the goods are lost or damaged, the insurers will cover the expenses associated with
shipping the damaged parts to the manufacturers for repair and return, or the transportation of
replacement parts from manufacturers and/or suppliers to the destination. This coverage
applies even if the goods were initially sent using a different mode of transport and not by air
freight. However, the underwriters' liability for these costs will not exceed Rs. 1,00,000
(Rupees one lac only), unless a higher amount is agreed upon for each individual loss.
Attachment & Termination of Risk Clause
The insurance coverage begins when the Subject Matter Insured is at the Assured's risk or
when the Assured assumes an interest in it. It remains in effect while the Subject Matter
Insured is in transit, in storage, or in any other location until it reaches its ultimate
destination. This coverage also includes customs requirements, transshipment, risks
associated with craft and barge transportation, whether usual or not. Additionally, it covers
the risks of loading before departure and unloading upon arrival at the Assured's premises or
the final delivery location.
Average Clause (applicable to static risks only)
If, at the time of any loss or damage to the property at a single location or the total value at
risk across all locations, as described in this document, exceeds the specified liability limits,
the Assured will be responsible for covering the excess amount and will proportionally share
in the cost of the loss or damage.
Brands Clause
The Assured has complete ownership rights over all goods that carry their distinctive brands,
labels, or permanent markings indicating them as the manufacturer. This includes any
exclusive or confidential formulas that may be relevant in the event of a loss. The Assured
will also maintain control over these goods.

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Under this Policy, if the Assured decides to either dispose of or return to their factory, or
recondition any goods damaged by insured perils, the Insurers will cover the total loss.
Insurers will have the right to claim any salvage value from these goods.

The Assured will collaborate with the appointed surveyors and the Insurers' claims
department to assess whether the goods involved in a loss can still be marketed. Any goods
considered unsuitable for marketing by the Assured will not be sold or disposed of without
the Assured's consent. However, the Assured will allow Insurers to claim any proceeds
obtained from the sale or disposal of such goods.

5
 Road Transit Risks Insurance Policy

THIS POLICY WITNESSES: In respect of accidental loss or damage occurring during the
period of insurance whilst insured vehicle is in a public place or is temporarily garaged
during the course of a journey elsewhere than in or on any premises owned by or in the
occupation of the Insured and subject to the Terms Exceptions and Conditions contained
herein or endorsed or expressed hereon:

Section I: When Vehicle Insured is Damaged or there is a loss

1. RISK CLAUSE
Central Dispatchers will Indemnify the insured against loss or damage to the vehicle insured
when the vehicle is in a public place or is temporarily garaged during the course of a journey
elsewhere than in or on any premises owned by or in the occupation of the Insured and
subject to the Terms Exceptions and Conditions contained herein or endorsed or expressed
hereon4:

The Company will indemnify the Insured against loss or damage to the vehicle insured
hereunder and/or its accessories whilst thereon:

a. by fire explosion self-ignition or lightning;

b. by burglary housebreaking or theft;
c. by riot and strike;
d. by earthquake (fire and shock damage);
e. by flood typhoon hurricane storm tempest inundation cyclone hailstorm frost;
f. by accidental external means;
g. by malicious act;
h. by terrorist activity;
i. whilst in transit by road rail inland waterway lift elevator or air;
j. by landslide/rockslide.

2. EXCLUSIONS
Central Dispatchers is not be liable to make any payment in respect of5;

(a) consequential loss, depreciation, wear and tear, mechanical or electrical breakdown,
failures or breakage's nor for damage caused by overloading or strain nor for loss or damage

4
Cl.1, HDFC Ergo General insurance Company Limited.
5
Cl. B,ICICI Lombard General Insurance, Marine Inland Insurance Policy.

6
to accessories by burglary, housebreaking or theft unless the vehicle insured is stolen at the
same time

(b) damage to tyres and tubes unless the vehicle insured is damaged at the same time in
which case the liability of the Company is limited to 50% of the cost of the replacement and

(c) any accidental loss or damage suffered whilst the Insured or any person driving the
vehicle with the knowledge and consent of the Insured is under the influence of intoxicating
liquor or drugs.

STRIKES EXCLUSION CLAUSE

In no case shall insurance cover loss, damage or expense when:

a. it is caused by strikers, locked out workmen or individuals taking part in labour

disturbances
b. resulting from strikes or lock outs
c. caused by acts of terrorisms being an act of any person/s acting on behalf of, or in
connection with, any organisation/s which carries/carry out activities directed towards
the overthrowing or influencing, by force or violence, of any government whether or
not legally constituted
d. caused by a person acting from a political or ideological motive
e. caused by the intervention of the government

In the event of the vehicle insured being disabled by reason of loss or damage covered under
this Policy the Company will bear the cost of protection and removal to the nearest repairer
and redelivery to the insured but not exceeding Rs. 150 in respect of any one accident.

3. UNFITNESS OFCONTAINER/CONVEYANCE CLAUSE

In no case shall this insurance cover loss damage or expense arising from

3.1 Unfitness of container or land and/or rail conveyance for the safe carriage of the subject
matter insured, where loading therein or thereon is carried out Prior to attachment of this
insurance or by the Assured or their employees and they are privy to such unfitness at the
time of loading.

Insured Declared Value

The Insured's Declared Value (IDV) of the vehicle serves as the 'SUM INSURED' within this
Policy and will be established at the outset of each policy period for every insured vehicle.

7
The IDV of the vehicle is determined based on the manufacturer's listed selling price of the
make and model of the vehicle at the time of insurance application or renewal, adjusted for
depreciation according to the specified schedule. Similarly, the IDV of any side car(s) or
accessories attached to the vehicle, which are not part of the manufacturer's listed selling
price, is also set accordingly.

The schedule of depreciation, categorized by the age of the vehicle, is used exclusively for
Total Loss/ Constructive Total Loss (TL/ CTL) claims. A vehicle is considered a CTL, as
mentioned above, when the combined cost of retrieval and/or repair of the vehicle, subject to
the Policy's terms and conditions, exceeds 75% of the IDV.6

MINIMISING LOSSES

DUTY OF ASSURED CLAUSE

1.It is the duty of the Assured and their servants and agents in respect of loss recoverable
hereunder

1.1 to take such measures as may be reasonable for the purpose or averting or minimising
such loss and

1.2 to ensure that all rights against carriers, bailees, couriers or other third parties are properly
preserved and exercised by immediately lodging a monetary claim against railway / road
carriers / bailees within six months from the date of railway / lorry receipt or as prescribed by
the relevant statute and the underwriters will, in addition to any loss recoverable hereunder,
reimburse the Assured for any charges properly and reasonably incurred in pursuance of these
duties.7

Section II: Liability to Third Parties

1. Subject to the limits of liability as laid down in the Schedule hereto the Company will
indemnify the Insured in the event of an accident caused by or arising out of the use of the
vehicle against all sums including claimant's costs and expenses which the Insured shall
become legally liable to pay in respect of:

I. Death of or bodily injury to any person caused by or arising out of the use (including the
loading and/or unloading) of the vehicle.

6
Section 1, SBI General Insurance, Motor Trade (Road Transit Risks) Insurance Policy.
7
Section 9, HDFC ERGO General Insurance Policy.

8
ii. damage to property caused by the use (including the loading and/or unloading) of the
vehicle.

Provided always that:

(a) The Company shall not be liable in respect of death, injury, or damage caused or arising
beyond the limits of any carriageway or thoroughfare in connection with the bringing of the
load to the vehicle insured for loading thereon or the taking away of the load from the vehicle
insured after unloading there from.

(b) Except so far as is necessary to meet the requirements of the Motor Vehicles Act, 1988 8,
the Company shall not be liable in respect of death of or bodily injury to any person in the
employment of the Insured arising out of and in the course of such employment.

(c) Except so far as is necessary to meet the requirements of the Motor Vehicles Act, 1988, in
relation to liability under the Workmen's Compensation Act, 1923, the Company shall not be
liable in respect of death of or bodily injury to any person (other than a passenger carried by
reason of or in pursuance of a contract of employment) being carried in or upon entering or
mounting or alighting from the vehicle insured at the time of occurrence of the event out of
which any claim arises.

(d) The Company shall not be liable in respect of damage to property belonging to or held in
trust by or in the custody or in the control of the Insured or a member of the Insured's
household or being conveyed by the insured vehicle.

(e) The Company shall not be liable in respect of damage to any bridge and/or way bridge
and/or via duct and/or to any road and/or anything beneath by vibration or by the weight of
the insured vehicle and/or load carried by the insured vehicle.

2. The Company will pay all costs and expenses incurred with its written consent9.

3. In terms of and subject to the limitations of the indemnity granted by this Section to the
Insured the Company will indemnify any driver provided that such driver;

(a) is not entitled to indemnity under any other policy

(b) shall as though he were the insured observe fulfil and be subject to the terms exceptions
and conditions of this Policy in so far as they apply.

8
Motor Vehicles Act, 1988.
9
Lonpac Insurance Policy.

9
4. The Company may at its own option;

(a) arrange for representation at any Inquest or Fatal Inquiry in respect of any death which
may be the subject of indemnity under this Section and

(b) undertake the defence of proceedings in any court of law in respect of any act or alleged
offence causing or relating to any event which may be the subject of indemnity under this
Section.

5. In the event of the death of any person entitled to indemnity under this Policy the Company
will in respect of the liability incurred by such person indemnify his personal
representative(s) in the terms of and subject to the limitations of this Policy provided that
such personal representatives shall as though they were the Insured observe fulfil and be
subject to the terms exceptions and conditions of this Policy in so far as they apply.

General Exceptions
The Company shall not be liable under this Policy in respect of: 10

(1) any accidental loss damage and/or liability caused sustained or incurred outside the
Geographical Area

(2) any claim arising out of any contractual liability

(3) any accidental loss damage and/or liability caused sustained or incurred whilst the vehicle
insured herein is

(a) being used otherwise than in accordance with the ‘Limitations as to Use’

Or

(b) being driven by or is for the purpose of being driven by him in the charge of any person
other than a driver as stated in Driver’s Clause

The Company shall not be liable in respect of any accidental loss damage and/or liability
directly or indirectly proximately or remotely occasioned by contributed to by or traceable to
or arising out of or in connection with war, invasion, the act of foreign enemies, hostilities or
war like operations (whether before or after declaration of war) civil war, mutiny, rebellion,
military or usurped power or by any direct or indirect consequences of any of the said
occurrences and except under Section II - I (i) of this Policy whilst the Insured or any person

10
TATA AIG Marine Cargo Insurance Policy.

10
driving with the general knowledge and consent of the Insured is under the influence of
intoxicating liquor or drugs and in the event of any claim hereunder the Insured shall prove
that the accidental loss damage and/or liability arose independently of and was in no way
connected with or occasioned by or contributed to by or traceable to any of the said
occurrences or any consequence thereof and in default of such proof the Company shall not
be liable to make any payment in respect of such a claim.

Conditions
Any benefits provided by this Policy can be lost in the following circumstances:

(a) The Insured fails to take reasonable measures:

(i) to keep any vehicle under their ownership or control, covered by this Policy, in good
condition.

(ii) to protect the property covered by this Policy from loss or damage.

(iii) to ensure that any vehicle used is suitable for its intended purpose.

(b) There is any misrepresentation or omission in the proposal, continuation statements, or at

any other significant time concerning this insurance.

(c) The circumstances surrounding this insurance change without notifying the Company and
obtaining written consent to continue the insurance.

If the premium for this Policy is based, in whole or in part, on estimates provided by the
Insured (indicated by an endorsement), the Insured must, within fourteen days after each
insurance period, provide the Company with the required information. The premium for that
period will then be adjusted, with any difference either paid by or allowed to the Insured,
subject to the Company retaining the minimum premium stated in the Schedule.

Upon becoming aware of any loss or damage covered by this Policy, the Insured or any
responsible party connected to the Insured's business must take reasonable steps to minimize
the loss or damage, identify any responsible individuals, and recover lost property. In cases of
theft or pilferage, immediate notice must be given to the Police, and written notice of the loss
or damage should be provided to the Company with available details. Within fourteen days,
the Insured must submit a claim statement in the form required by the Company, along with
evidence to support the claim. The Company may, at its own expense, take action to recover
lost property and may request information and assistance from the Insured. The Insured must

11
not incur any expenses to repair damage without the Company's written consent, and any
claim negotiations must have the Company's consent.

If the Insured has rights of indemnity against third parties for losses covered by this Policy,
and a claim is made under this Policy, the Company may, at its discretion, enforce these rights
for its benefit, using the Insured's name in any related actions or negotiations. The Insured
must provide necessary assistance at the Company's expense in these matters.

In case of any fraudulent claim or fraudulent means used to obtain benefits under this Policy,
all benefits under this Policy will be forfeited.

This Policy does not cover any loss or damage that is already insured by another existing
Policy at the time of the loss or damage, except for any excess beyond what would be payable
under that other Policy, had this insurance not been in place.

The Company is not obligated to accept notice of any transfer of interest arising under this
Policy. No person other than the Insured has rights against the Company, unless a transfer of
interest is approved by the Company and endorsed on the Policy.

The Company may terminate this Policy with fourteen days' notice, sent by registered post or
recorded delivery, subject to a proportionate return of premium for the unexpired term. If the
premium is based on estimates provided by the Insured, it will be adjusted.

All written notices or communications under this Policy must be sent by post to the Insured's
address as stated in the Policy or the most recent address provided to the Company, or to the
Company at its Chief Office. The Policy number must be included in the communication.

No changes to the terms of this Policy or any endorsements or additions will be valid unless
made and signed at the Chief Office or a Divisional Office of the Company. In cases where
this Policy is void or benefits are forfeited, the premium paid will be retained by the
Company.

Any disputes regarding the amount to be paid under this Policy, when liability is admitted,
must be referred to an Arbitrator appointed by the parties according to applicable statutory
provisions. The making of an Award by the Arbitrator is a precondition for any legal action
against the Company.

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 Claim Settlement
Central Dispatchers will settle the claims under this policy within a time period of 30 days,
from the date of the receipt of the necessary documents required for assessing the claim. In
the event that the Company decides to reject a claim made under this Policy, the Company
shall do so within a period of 30 days of the Survey Report or the Additional Survey Report,
as the case may be, in accordance with the provisions of Protection of Policyholders’ Interest
Regulations 2002.11

Grievance Redressal Procedure

The Grievance Redressal Cell of the Company looks into complaints from policyholders. If
the Insured has a grievance that the Insured wishes the Company to redress, the Insured may
approach the person nominated as ‘Grievance Redressal Officer’ with the details of his
grievance. The procedure to be followed is as per Regulation 17 of IRDA of India (Protection
of Policy holders Interests) Regulation. 2017.12

Important Notice Clause

This Policy shall be governed by and construed in accordance with the laws of India.

11
Protection of Policyholders’ Interest Regulations 2002.
12
Regulation 17 of IRDA, 2017.

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