INSURANCE

DOCUMENTS

PROPOSAL FORM
Companys printed proposal form is an
application for the required Insurance
cover. The questions are designed to elicit
all material information about the proposed
risk.
In marine cargo insurance, it is not the
practice to use a proposal form whereas
Data Sheet is used.
In fire insurance, for large industrial risks
risk inspection reports forms part of
proposal.
In
Misc.
Insurance
Incl.
Motor,
proposals are invariably used.

 COMMON QUESTIONS ASKED:

Name and address For identification
Profession, Occupation or business
In Personal Accident, Mediclaim this has
a material bearing on the risk.
Previous and present insurance
Names of the Insurers, Whether any
insurer had declined his proposal,
imposed special conditions, increased
the premium, applied any special
conditions, warranties, or refused to
renew the policy or cancelled the policy
during its currency.

 Loss Experience Full details of

losses suffered by him whether or
not they were insured.
Sum Insured - Maximum limit of
liability under the policy
Declaration Makes the proposal
a basis for the contract.
Lastly, signature, date & time

 POLLICY FORMS
It is an evidence of the contract,
stamped in accordance with the
Indian Stamp Act, 1899 and can be
divided in distinct sections:
The Heading Companys Name &
Address
The Preamble or Recital Clause
introduces the parties to the contract,
makes a reference to proposal and
premium paid as consideration

 Operative or insuring clause

Clearly defines the perils covered, perils
excluded, the sum insured and other
limits and the
circumstances under
which the Company is liable to pay to
Insured.
Schedule Contains relevant matter of
the contract. Ex. Insured name and
address, Policy No., Date of issue,
Agency, Risk covered, premium charged,
period of insurance, and details of the
subject matter of the insurance.

 Conditions Express conditions serve

various purposes. Ex. Time notice of
loss, cancellation, lay emphasis, some
legal principles like subrogation and
contribution, arbitration, etc.
Implied conditions - not expressed on
the policy. Ex. Seaworthiness of a ship.
Conditions precedent material fact
Conditions subsequent alterations in
risk
Condition precedent to liability
prevents Insured from recovering a loss.

CLASSIFICATION OF CONDITIONS

CLASSIFICATION OF EXPRESS &

IMPLIED CONDITIONS

WHAT ARE THE CONSEQUENCES OF

BREACH OF CONDITIONS?

COVER NOTE
COVER NOTES are issued
In advance of the policy
When negotiations are in progress
Provide cover on a provisional basis
Unstamped documents
Nevertheless CNs are subject to
usual terms, conditions, warranties
etc., of the policy. Ex. Agreed Bank
Clause, Declaration Clause, Spl.
Warranties etc.

 CNs contain name, address, sum insured,

period of insurance, risk covered, rate and
premium (if not known, provisional rate),
Description of the risk, serial number of the
CN date and signature.
Motor cover notes are issued in accordance
with the provisions of Chapters X and XI of
the Motor Vehicles Act, 1988.
In Motor Insurance Cover Note is issued as
per the provisions of MV Act Form No. 52
[ Rule 142(1) of Motor Vehicle Rules 1989]
Motor tariff regulations provide that a cover
note is valid for a period of 15 days and the
same can be extended by 15 days at a time,
total period shall not exceed 2 months.

 CERTIFICTE OF INSURANCE
MOTOR INSURNCE It is required by
M.V. Act that in addition to a policy a
certificate of insurance is given to
provide evidence to Police and
Registration Authorities. It contains
essential features of the cover.
MARINE INSURANCE Certificates of
insurance are issued to provide
evidence of cover on consignments
insured under Open Policies or Open
Covers.

ENDORSEMENTS
To modify the terms and conditions in
a policy endorsements are used.
In Workmen's Compensation policies
for a particular rate the relevant
endorsement has to be incorporated.
In Motor insurance under various
circumstances relative endorsements
are used.
In both the above the wordings are
set out by Tariff.

 Endorsements are also to record alteration,

generally in these circumstances during
the currency of the policy
Variation in Sum Insured
(increase/decrease)
Change of Insurable Interest
To cover additional perils
Change of risk like occupancy of the
building
Transfer of proper to another location
Change in name
Cancellation of insurance
Adjustment of policy (like declaration
policy)

WARRANTIES
Having accepted a risk for certain rate of
premium and, subject to certain terms
and conditions , the insurer would like to
ensure that the risk remains, throughout
the duration of the policy, the same as it
existed at the time of proposal.
The insurer would like to be protected
against the introduction of some feature
which may increase the risk.
For this purpose , warranties are inserted
in the policy

 Warranties

These
are
incorporated to ensure that the
risk remains through out the policy
period, the same as it existed at
the inception, to protect himself
(Insurer) against increase in the
risk. Warranties may be printed on
the policy, or separately attached.

EXMPLES OF WARRANTIES
Fire:

Construction,FEA,Category of Materials I,II,III, Coir waste,Coir

fibre caddies.
Marine:

Packing in double gunny bags, shipped in First class steamer,

Professionally packed.
Other Classes:
Motor: Motor cycle not to used without side Car attached
Misc : Premises are guarded by watchmen all the times under
BP & JB
policies.
Eng :BPP insurance inspection of Boiler inspectors appointed by
Govt.
Boiler operated by attendants having valid certificate .
: EEI Maintenance contract during period of insurance.

RENEWAL NOTICE
As a matter of courtesy and healthy
business practice we issue renewal notice
to the Insured that his policy is due to
expire and invite him to renew his policy.
There is no legal obligation to issue
renewal notice.
Renewal notice also calls for intimation
about material alterations if any.
Motor renewal notices also advise the
Insured to revised the sum insured.
It is also advised that no risk can be
assumed unless full premium is paid in
advance.

CONDITIONS WARRANTIES- REPRESENTATIONS

A condition goes to the root of the contract and thus
governs the validity of .
A warranty , according to the general law of
contract, is collateral and thus does not go to the
root of the contract. In contract of insurance,
however, a warranty has the quality of essentiality
and thus effect the validity of a policy in precisely
the same way as a condition. Strict compliance
with warranties is obligatory.
A representation is in a different category . It maybe
a statement of opinion or of intention and it is not
incorporated in the contract itself. A representation
must be substantially accurate, but trivial
misstatements are immaterial unless a
representation is a warranty, as happens with the