CLAIMS MANUAL

CLAIMS MANUAL
FOR
FOR

GIPSACOMPANIES
GIPSA COMPANIES

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 TABLE OF CONTENTS

PARTICULARS  PAGE NO. 

General guidelines 3-7

FIRE 8-9

ENGINEERING 10 - 12

MARINE CARGO 13 - 18

Marine hull 19 - 25

MOTOR OWN DAMAGE 26 - 32

MOTOR THIRD PARTY 33 - 35

HEALTH 36 - 39

miscellaneous 40 - 44

liability 45 - 47

Disposal of salvage 48 - 51

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 GENERAL GUIDELINES
The procedures laid down in this Manual are not exhaustive and are of general nature. In some cases it may
be observed that the requirements laid down in the Manual could not, in practice be complied with due to
particular circumstances applicable to the individual case. This non-compliance should not therefore make the
claim as not payable and the claim settling authority is advised to use his discretion by recording his reasons
in detail.

1. INTIMATION OF CLAIM
1.1. Intimation of the claim is normally received by letter/ e-mail/telephonic message/ any other mode.
When telephonic or verbal message is received from the Insured, a suitable note should be
prepared confirming the message and the date and time of its receipt.
1.2. On receipt of such intimation, the office should respond immediately and give clear information to
the insured on the procedures that he should follow.
1.3. The Office should ascertain that an Insurance Policy is in force on the date of the occurrence.
1.4. Each and every claim intimation received must be immediately registered in the system.
Simultaneously a claim file shall be prepared for keeping the claim papers.
1.5. Where intimation of loss is received much after the occurrence of loss, the reasons for delay
should be ascertained & recorded.

2. APPOINTMENT OF SURVEYOR
2.1. It is mandatory to appoint an independent surveyor for non-motor claims if estimate of loss is
higher than Rs. 100,000/-, and in case of motor claims, if the estimate is higher than Rs. 50,000/-
as per IRDAI (Insurance Surveyors and Loss Assessors) Regulations, 2015.
2.2. In cases where a surveyor has to be appointed, he should be appointed immediately and not later
than 72 hours of receipt of intimation from the insured.
2.3. The surveyor appointment should be in line with Surveyor Management Policy as approved by the
Board.
2.4. The Surveyor should be provided with a copy of policy.
2.5. The Surveyor should be holding a valid license from the IRDAI and should be member of IISLA.
2.6. Insurer shall communicate the details of the surveyor, including his role, duties and responsibilities
to the insured by letter, email or any other electronic form immediately after the appointment of the
surveyor.
2.7. Wherever required, the Claim settling Office may authorize Surveyors to appoint a technical
expert/ investigator in consultation with the insurers. The Fees may be negotiated in consonance
with the expertise required and such fee shall be paid in addition to the prescribed fee payable to
the surveyor. Appointment of consultant/investigator should be decided by the Claim approving
authority only.
2.8. The terms of reference and the scope of work for the consultants/experts/investigators should be
well defined with clear directives to submit his report to the surveyor in a time bound manner.
2.9. In case the loss or damage is caused by a peril not covered by the policy, the insured should be
suitably advised immediately by Registered A.D. Post.
2.10. Even where liability is in doubt, it is advisable that a ‘without prejudice’ loss assessment is done
by an independent surveyor.

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3. PROCESSING OF CLAIMS
3.1. The insurer / surveyor shall within 7 days of the claim intimation, inform the insured/ claimant of
the essential documents and other requirements relating to the claim. Where documents are
available in public domain or with a public authority, the insurer / surveyor shall obtain them.
3.2. The surveyor shall start the survey immediately and in case of any contingency, within 48 hours of
his appointment.
3.3. The Surveyor shall be instructed to submit a brief First Visit report or ILA (Immediate Loss Advice)
to HO/RO/Claim Service Hub/Operating Office (depending on the office appointing the surveyor)
briefly commenting on the probable cause, nature and extent of loss immediately but not later
than 15 days from the date of his first visit.
3.4. The Surveyor should follow the IRDAI (Surveyors and Loss Assessors) Regulations, 2015 and
IRDAI (Protection of Policyholders’ interests) Regulations, 2017.
3.5. The report should be submitted within 30 days from the date of appointment. A copy of the
surveyor’s report shall be furnished by the insurer to the insured/ claimant, if he so desires.
3.6. In case of claims made in respect of commercial and large risks the final survey report should be
submitted within 90 days of appointment of the surveyor. Such claims shall be settled within
30days of receipt of final survey report and / or last relevant and necessary document.
3.7. Where due to circumstances beyond the control of the surveyor the final survey report is likely to
be delayed, the Surveyor shall, within 15 days and every fortnight thereafter wherever warranted,
submit interim/status report indicating the stage at which the survey work rests, the difficulties
encountered in finalizing the survey report and when the final report could be expected. If a delay
is necessitated an explanation should also be given to the Insured by the Surveyor in writing.
3.8. If the loss is a major one, the surveyor shall be asked to submit one or more interim reports. At the
request of the Insured it may be necessary to consider making part payments of claim “On
Account” and the surveyor shall be asked to give his recommendations in writing on such request
with due regard to observance of warranties and conditions and the probable quantum of loss and
coverage under the policy.
3.9. If on receipt of final survey report, it is found incomplete in any respect, an additional report on
certain specific issues may be called from the surveyor by the insurer within 15 days of its receipt.
3.10. The surveyor shall furnish such additional report within 3 weeks from the date of insurer’s request.
The claim shall be offered for settlement to the insured/ claimant within 30 days from the receipt of
final survey report/ additional information.
3.11. After initial estimate of loss, if there is any change in the estimate Net Liability, same should be
immediately revised in the system.
3.12. Documents required for processing of claims are specified in the respective sections of this
manual and all documents must be called for from the insured in one go and not in piecemeal.

4. PAYMENT OF CLAIM
After approval of the claim by Competent Authority, the Insured shall be advised of the admission of the
claim by sending an advance voucher to be discharged and returned to the office. Even if the insured
gives a qualified discharge voucher, the claim as approved has to be paid. If the loss is recoverable from
any third party, a Letter of Subrogation and /or assignment and special Power of Attorney should be
prepared, if necessary in consultation with an advocate. The same should be sent to the Insured for
completion on requisite stamp paper & return. The Bank or Financial Institution whose interest is protected
should give a No Objection Certificate (NOC) clearly stating to whom the payment needs to be made as
per policy. The payment can be released accordingly on receipt of the voucher duly signed by the insured.
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5. “ON ACCOUNT” PAYMENT
Pending final assessment of a claim an “on account” payment may be considered subject to request from
the insured and liability being established. The payment should be upto 75% of minimum liability.

6. CLAIM NOTE
6.1. A claim note should be prepared by the underwriting office in the prescribed format of the
company. All information required in the format should be filled to facilitate a clear, correct and
unambiguous decision on either payment or repudiation of the claim. If the claim falls within the
financial authority of higher office i.e. RO/HO, a clear recommendation should be made to
facilitate faster decision by RO/HO. It is clarified that recommendations of final surveyor are not
binding on the insurer and final decision rests with the insurer based on the facts and correctness
of claim.
6.2. In case a particular claim has a special feature which is not included in the format the same
should be separately mentioned
6.3. The confirmation of compliance of Sec 64 VB should be done by an Officer in the
underwriting office.
6.4. 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.

7. DISPOSAL OF SALVAGE
The Procedure as laid down in the manual for disposal of salvage shall be followed.

8. PAYMENT OF SURVEY FEE

Survey Fee including fees of technical experts/consultants/investigators should be paid immediately
upon the receipt of relevant reports and bills as per the prescribed/agreed scale of fees, as
applicable.

9. CO-INSURANCE
Claims under Co-insurance policies shall be processed and settled by the Leader as per Co-
insurance Agreement. A decision by the leader regarding claim settlement shall be final. Cash call
shall be made as per the Co-insurance agreement.

10. CLOSE PROXIMITY CASES

Investigation to be instituted when the claim has occurred in close proximity i.e. within 5 days of the
date of inception of risk or a material change in cover.

11. RECTIFICATION OF POLICY AFTER A LOSS

Rectification of a policy after a loss is reported for reasons other than breach of condition or 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.

12. REPUDIATION OF CLAIMS

Repudiation has to be well thought-out and done in a systematic manner.
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 a) If the liability is not admitted under the policy, the repudiation letter must state the condition /
provision of the policy under which repudiation is necessitated.
b) In case of fraud, the surveyor /investigator /expert should prove with evidence of fraud that will
stand before the Court of Law.
c) The competent authority for repudiation of a claim would be the authority competent to settle the
claim.

13. RE-OPENING OF CLAIM FILES

Reopening of claim file can be done by the authority one step higher than the authority competent to
settle the claim.

14. GUIDELINES IN CASE OF A GRIEVANCE

If there is a grievance:
a) Acknowledge receipt of the grievance immediately
b) Re-examine the matter if there is a possibility based on new information received.
c) Explain to the client the basis or logic of the decision and the procedures followed to arrive at the
same if no scope for review is available.
d) Dispose all grievances within 15 days.
e) If the insured/ claimant wish to proceed further with their grievances, they should be informed
about the Company's Customer Service Department and/or Ombudsman, in case of individuals.
f) All legal cases arising out of claims shall be dealt in consultation with RO/HO.

15. GUIDELINES FOR SETTLEMENT OF NON-STANDARD/COMPROMISED / NEGOTIATED CLAIMS

15.1. The terms non-standard/compromised/negotiated are used interchangeably. All claims that
cannot be settled as standard – where all terms, conditions and warranties of the Policy are not
fully complied - may be treated as ‘Non-Standard Claims’. It is clarified that where the breach of
policy condition or warranty are neither the cause of loss nor have contributed to the extent of
loss, the claim can be treated as Standard Claim.
15.2. Cases of misrepresentation/non-disclosure may be treated appropriately by the competent
authority and reasons to be recorded.
15.3. The percentage of Non-Standard Claim settlement may be decided by the competent authority
depending upon the merits of each individual claim.

16. GUIDELINES FOR SETTLEMENT OF EX-GRATIA CLAIMS

Cases where there is a dispute with regard to the legal interpretation of the policy condition or
warranty or the scope of cover, the legal advisers may advise that considering the cost of litigation
and chances of success, it is desirable to settle the claim by negotiation. Such settlements are
termed ex-gratia. There are also cases where the property damaged is either not insured or the
policy does not cover the particular peril causing damage. The Insured may be able to demonstrate
that such absence of cover was purely through clerical error and that a well-established practice
exists to effect full insurance of all properties. Claims may be considered in respect of such
exceptional cases on ex-gratia basis. Ex Gratia settlements may be considered up to a maximum of
60% of the assessed loss.

17. GENERAL
17.1. Where Final Survey Report or Interim report is not received within the prescribed period, regular
follow up should be made by the Office with the surveyor.
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 17.2. The policyholder/claimant/beneficiary is to be kept informed of the progress of the claim as
required. If additional time is required the same must be informed. In case the insured is not
cooperating or providing the required documents, the same must also be communicated and
copy kept in the file.
17.3. Where there is a dispute as to the quantum of loss and the surveyor is unable to resolve the
problem, the Insurer to call for a meeting between the Insured and the Surveyor to resolve the
difference.
17.4. All Outstanding claims shall be reviewed periodically to expedite disposal.
17.5. Assistance of marketing personnel handling the particular account may be sought, wherever
possible in the administration of the claim e.g. Collection of required documents/information
from the claimants etc.

18. FINANCIAL AUTHORITY

Financial Authority for settlement of claim shall be as per the limits prescribed by the Company from
time to time.

19. The Surveyor Appointment Letter (Annexure A) and Letter of Intimation to Insured/Claimant
(Annexure B) is attached.

20. The CMD of the Company is authorized to make changes in the Manual.

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 FIRE INSURANCE CLAIMS

1. DOCUMENTS REQUIRED AND PROCESSING OF CLAIMS

1.1 The documents required for processing a claim are:

a) Policy Copy along with all the endorsements issued till Date of Loss
b) 64 VB compliance
c) Survey Report
d) Claim form duly signed by the Insured along with claim bill
e) Fire Brigade Report
f) First Information Report of Police
g) Meteorological report in case of Act of God perils claim. (can be waived in case of CAT losses-
Media reports can be considered as basis. In case of local incidents, report of local
administration can be accepted. )
h) Forensic Report (Wherever applicable)
NOTE:
Item e) and f) shall be waived where Survey Report is clear and does not cause any doubt on
the occurrence as well as extent of loss and where it is not mandatory requirement of the State.
Similarly, they can also be waived where no report is made to the Police or Fire Brigade. In case
of Riot Fire losses also where such occurrence is in the public knowledge, production of Police
First Information Report and Fire Brigade Report shall be waived.
1.2 The documents shall be scrutinized to verify that:
a) Loss has occurred within the period of Insurance.
b) Circumstances and cause of fire/ damage fall within the scope of the policy i.e. an insured peril
has operated.
c) Situation of the premises affected is covered under the policy.
d) Construction and occupation of the building conforms to policy.
e) All conditions and warranties have been observed.
f) Right of recovery against third party who may be responsible for the loss has been protected;
g) The assessment made by the surveyor is in order;
h) Insured has an insurable interest. If insurance is subject to Bank Clause payment can be made
only to the Bank / Financial Institution or as directed by it;
i) No other insurance is in force on the affected property.

2. LOSS OF PROFITS / CONSEQUENTIAL LOSS / BUSINESS INTERRUPTION LOSSES

2.1 MD Provision has to be complied with.
2.2 Claims under these policies have to be monitored regularly by the office/surveyor to ensure that the
insured is doing the needful to minimize the period of indemnity as much as possible.
2.3 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.

3. 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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4. PAYMENT OF CLAIM
After verification of all aspects of the claim, where the Survey Report is clear as to the cause & extent
of the loss and the liability under the policy is not in doubt, the claims department should put up an
internal claim note, as per Annexure C, for Final or On Account payment of the loss.

5. GENERAL
5.1 All outstanding claims shall be reviewed periodically by the HO/RO/Claims Service Hub/Divisional
Office/Branch Office/ to expedite disposal.
5.2 Claims which are outstanding for over two years for want of details / documents and where there is
no response from the claimant in spite of reminders: the file may be closed as NO CLAIM, after giving
15 days Regd. A/D notice. Such claim files shall be preserved at a safe place for future reference.
5.3 All legal cases shall be dealt in consultation with Head Office /Regional Office.

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 ENGINEERING INSURANCE CLAIMS
1. PROCESSING OF CLAIMS
1.1 It must be checked that:
a) Whether any warranty or any special clause is applicable to the damaged item of machinery.
b) Any special warranty/exclusion applicable on account of nature of plant/process or applicable on
account of occurrence taking place during testing/commissioning of equipment/plants.
c) The final survey report should confirm that there is no breach of warranty or special clause or
policy provision.
1.2 Insured to submit final bills of repairs duly verified by the surveyor.
1.3 To check the assessment done by the surveyor to ensure that the following have been disallowed
unless specifically covered:
a) Non metallic parts.
b) Media (refrigerant, catalyst etc.)
c) Exchangeable parts e.g. rubber belts, bushes etc.
d) Any deduction required to be made in view of special clause incorporated in the policy, on
account of peculiar nature of equipment or process of manufacturing.
e) The charge for the overhauling / modification / rectification if they are done at the time of
undertaking accidental repairs.
1.4 If the customs duty is paid by the Insured for replacement of the damaged part, the same should be
allowed at the same percentage as included in the sum insured unless additional custom duty
coverage is taken by the Insured by special endorsement.
1.5 A Special Claim Note as per Annexure A may be Prepared and if necessary, sent to RO/ HO along
with following documents:
a) Policy copy and 64 VB compliance
b) Claim form duly completed
c) Bills of repairs.
d) Photographs of damaged parts as proof of damage.
e) Preliminary Survey Report, if any.
f) Final Survey Report together with consultant/ expert’s reports, if any.
1.6 The steps involved in loss adjustment should be as under:
i) Gross loss assessed Rs. ______________________
ii) Less: depreciation, if any, Rs. ______________________
iii) Less: Salvage Rs. ______________________
iv) Less: Under Insurance Rs. ______________________
v) Less: Excess Rs.______________________
vi) Net Claim payable Rs.______________________

2. Policy type wise additional requirements are as follows:

2.1 MCE POLICIES
a) Marine practice to be followed for settlement of Marine claims under MCE policies.
b) In case of mega projects, the services of an on-site representative/outside project monitoring
agency could be retained to:
i) monitor the progress of the project activity;
ii) receive report, on general conditions prevailing at site, from loss minimization point of
view;
iii) co-ordinate with different authorities at site;
iv) collect required documents for claims already lodged to expedite disposal;
v) conduct survey of losses falling within the self-survey limit.
vi) preliminary survey of losses
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 c) 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.
d) 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.
e) 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.

2.2 CONTRACTORS’ ALL RISK INSURANCE

a) 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.
b) Excess as specified is to be applied.

2.3 CONTRACTORS’ PLANT AND MACHINERY INSURANCE

a) Being an Annual Policy, the validity of the policy at the time of occurrence should be verified.
b) 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.
c) The surveyor should confirm the accidental damage to the equipment.
d) 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.

2.4 MACHINERY INSURANCE

a) 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.
b) Repairs/replacement should be confirmed by the surveyor
c) 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.
d) 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/minimization of re-occurrence of breakdown/loss.
e) 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.
f) The losses under the other extensions like additional custom duty, airfreight, 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.

2.5 BOILER EXPLOSION INSURANCE

a) Copy of the certificate issued by inspectorate of Boilers (wherever applicable) for operation
b) Boiler inspection report on the occurrence.
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 2.6 LOSS OF PROFITS INSURANCE
a) A loss of profit claim is admissible only if loss or damage to Machinery or Boiler covered under
corresponding policy is admissible.
b) 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.
c) 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 minimize the loss under the
Machinery Loss of Profit policy.

2.7 ELECTRONIC EQUIPMENT INSURANCE

Since the selection of equipment is allowed, the underwriting office should confirm the existence of
cover for the damaged item.

2.8 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 authorization of the HO (Tech).

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

2.10 DETERIORATION OF STOCKS

In the Deterioration of Stock policy, claim is possible in case of accidental failure of Refrigeration Plant
Machinery. In such event the Insured should be advised to take following minimization measure:
a) No fresh stock should be loaded in cold storage chambers.
b) Cold storage doors should be sealed to maintain temperature and avoid temperature rise.
c) If Possible, the insured should be requested to shift stocks to some other running cold storage
premises preferably in cool evening / night period or through refrigerated vans.
d) Insured should be requested to carry out repairs to refrigeration plant in most expeditious
manner.
e) In the event of there being not possible of completing repairs immediately, the Insured should be
advised to unload stocks from cold chamber for disposal in the local market, as quickly as
possible, at best available price in association with the surveyors.
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MARINE CARGO INSURANCE CLAIMS

1. NOTE:

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 One of the condition precedents in marine insurance claims is that the claimants have to protect the right of
recovery from the carriers if the goods are lost or damaged whilst in the custody of the carriers.

2. OPEN DELIVERY FROM CARRIERS / THIRD PARTIES

2.1 The claimants have to establish that the goods have been lost or damaged. To establish that the
goods have been lost or damaged whilst in the custody of the carriers, claimants have an obligation
to apply for open assessment delivery from the carriers. Failure to do so would prejudice the
Insured’s right of recovery under the policy. CLAIMANT SHOULD BE PROPERLY GUIDED IN THIS
REGARD IMMEDIATELY ON RECEIPT OF CLAIM INTIMATION.
2.2 Where the written application for open / survey delivery is refused by the carriers and a survey is
disallowed by them, the claimant shall be asked to take delivery under a written protest after survey
by a surveyor deputed by the dealing office.
2.3 In case of non-delivery/ short delivery the claimant shall be asked to obtain and send to the dealing
office either a non-delivery / short delivery certificate from the Port Authorities or the original Railway
Receipt (RR). Lorry Way Bill (LWB) or Air Consignment Note duly endorsed by the carriers,
confirming non-delivery / short delivery or a separate non-delivery/ short delivery certificate as the
case may be.
2.4 If the loss occurred during loading into ship, a Lost Certificate shall be obtained by the claimant from
the Port Authorities or steamer agents.

3. APPOINTMENT OF SURVEYOR
3.1 If the estimate of the loss is within Rs. 10,000/- the dealing office may waive the survey requirement
and settle the claim on the basis of the claimant’s advice and completed claim form as per Annexure
‘A’ after being satisfied that the claim is genuine and is admissible under the policy. Where
necessary the authorized official of the dealing office may inspect the damaged consignment.
Wherever required documentary evidence in the form of police reports, short landing/ non delivery
certificates issued by port trust, railways, carriers or other public or semi government authorities or
Sling loss claims certified by harbor authorities to be obtained.
3.2 If the estimate of loss is over Rs.10,000/- the dealing office shall appoint a surveyor well experienced
in conducting surveys of the type to inspect and assess the loss unless self survey for higher amount
has been specifically agreed with the claimants. Technical experts may also be appointed as
consultants to the licensed surveyor for certain types of consignments e.g. Mechanical Engineers for
machinery surveys or Chemical Engineers for chemical risks etc.
3.3 For general average claims loss adjusters to be appoint by HO.
3.4 Survey Fees:
a) Survey fees can be paid by the insurers directly or by the claimants.
b) Survey fees, if paid initially by the claimant can be reimbursed with the claim amount if the claim
is admissible under the policy.
c) If claim is not admissible, insurers can pay/ reimburse appropriate survey fees.

4. DOCUMENTS REQUIRED FOR SETTLEMENT OF ALL CLAIMS

Documents generally required for settlement of various types of claims are as under. Keeping in view the
purpose of calling for the claim documents and depending on circumstances, submission of certain
documents may be waived recording the reasons for the same.
a) Original insurance policy /declaration under the open policy duly endorsed by the Insured
claimant.
b) Original or a signed copy of sales invoice alongwith packing list.
c) Copy of Bill of Lading (in case of sea voyage, in case of imported consignment)
d) Copy of Bill of Entry.

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 e) In case of General Average. Counter Guarantee or original Cash Deposit Receipt with Letter of
Transfer.
f) Letter of Subrogation duly stamped (only where recovery from carriers is possible).
g) Special Power of Attorney (wherever applicable).
h) Lost Certificate where loss has taken place during loading.
i) In case of shortlanding / non-delivery of complete consignment.
j) Original contract of affreightment duly endorsed in our favour viz. Railway Receipt. Transport
Receipt, full set of Bill of Lading, Air Consignment Note and Postal Receipt etc. as applicable.
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.
k) In case of partial non-delivery / shortlanding.
i) Open assessment report by the carrier and/or
ii) Survey Report of independent survey.
iii) Claim form (as per Annexure ‘A’)
l) In case of partial loss/ damage:
i) Open assessment report by the carrier and/or
ii) Survey report of independent surveyor
iii) Claim form (as per Annexure A)
iv) Claim bill (where necessary)
m) Copies of correspondence exchanged with the carriers alongwith the Regd. A/D Cards
(wherever necessary recovery from the carriers is possible).
n) Banker’s Certificate confirming non receipt of export proceeds in India in an approved manner
(in case of claims under export policies settled in India).

5. CLAIM SETTLEMENTS ON SHIPMENTS BY SEA

5.1 Non-delivery (shortlanding or landed but missing)

a) The claimant should be requested to apply for either a shortlanding certificate or a landed but
missing certificate from the port authorities or the steamer company within the period allowed
under Statute / Port Rules. When the shortlanding or landed but missing certificate is obtained,
the claimant should be asked to send a notice to the carrier or the port authorities as the case
may be for the value of the lost cargo (CIF value and/or duty and/or profit) by Registered Post
Acknowledgement Due under advice to dealing office. For applicable time limit for giving notice
and filing suit against steamer company and/or port authorities, refer para 7.
b) Such a claim on the carrier or the port authorities should be accompanied by
i) Photocopy of shortlanding or landed but missing certificate.
ii) Copy of Bill of Lading.
iii) Copies of invoices.
NOTE: Individuals or agencies specialized in the work of tracing missing cargo should be engaged to
trace the missing cargo of very high values. Claims where the right of recovery from the steamer
company or port authorities is prejudiced shall be dealt with as set out in para 9.

5.2 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:
a) Copy of valued claim on carrier / port authorities (as the case may be ) and acknowledgement
thereof;

14
 b) Notice of abandonment in case of CTL to custom authorities
c) Open assessment / delivery certificate / ship survey report.

5.3 PARTICULAR AVERAGE (PARTIAL LOSS i.e. THEFT, PILFERAGE AND OTHER DAMAGES)
a) In all cases where loss or damage is reported before clearance from the docks, the claimant
should be advised to arrange steamer company or port authorities survey in addition to customs
examination before clearance of the consignment from the docks whenever there appears to be
a tampering of the consignment as revealed by the disturbance in packing or by the apparent
condition, if without packing.
b) 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 short packing at their end and 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 in order to determine skillful pilferage in transit.

5.4 CLAIM UNDER DUTY AND INCREASED VALUE INSURANCE POLICY

a) In case of shortlanding, if the duty is already paid by the claimant on the shortlanded packages
also, the claim for shortlanding may be settled only for the CIF value portion of the cargo
excluding duly, requesting the insured to obtain refund of duty directly from the Customs.
Claims other than shortlanding have to be scrutinized with due regard to the basis of duty
insurance and it shall be authorized for payment for the actual value of the loss including the
actual customs duty paid but not exceeding the proportionate insured value on duty.
b) 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.

5.5 GENERAL AVERAGE

a) 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 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 collected by the Steamer Company would be
credited into a properly constituted Trust account jointly with the Average Adjusters.
b) In lieu of cash deposit, steamer companies often accept unlimited guarantee of the Insurance
Company covering the goods. The dealing office shall arrange for the General Average
Guarantee to be given after prior approval from HO Marine Cargo Dept.
c) As soon as any intimation is received regarding GA, HO Marine Dept. should be intimated with
full details. The documents for GA claims are as follows:
i) Original policy or certificate of insurance duly endorsed
ii) Bill of lading (legible front and back duly signed)
iii) Invoice (original or signed copy)
iv) Intimation of GA by insured/agent
d) Settlement of claim for refund of cash deposit can be processed under the policy, being limited
to the amount arrived at by applying the percentage of General Average declared on the insured
value. A Letter of Transfer shall be obtained duly signed by the consignee to whom the refund
of cash deposit has been made. After settlement of refund of cash deposit, the General
Average Adjusters specified in the General Average Deposit Receipt should be notified of the
payment with a request to remit directly to the dealing office any refund, due in final adjustment.
The original General Average Deposit Receipt should be preserved carefully as General

15
 Average adjustment takes years and it has to be surrendered to the Adjusters before they could
remit any refund found due in adjustment.
e) Where in lieu of cash deposit a General Average Guarantee is given by the dealing office, a
copy of the Guarantee must be retained with the claim papers. A Counter Guarantee shall be
obtained from the consignees.
f) When the goods landed from a vessel which has declared General Average are in damaged
condition, the dealing office should arrange a joint survey with the steamer agents. The
procedure for settlement of Particular Average (PA) claim for damage and/or shortage is set out
in para 5.3 above, but since the loss could have occurred in consequence of the General
average Act, it may qualify to be made good in the final General Average adjustment. Therefore
after settlement, the dealing office should write to the General Average Adjusters advising them
of the settlement of PA claim and requesting that the loss should be made good. Simultaneously
a copy of the Survey Report, Invoice, Bill of Lading, Computation of the claim and Letter of
Subrogation from consignees should be forwarded to the General Average Adjusters

6. CLAIM SETTLEMENT ON DESPATCHES BY INLAND TRANSIT (RAILWAYS OR ROAD CARRIERS

OR OTHER MODES OF TRANSIT FOR DESPATCHES WITHIN INDIA)
6.1 SHORT AND NON-DELIVERY
a) When a claim for short delivery or non-delivery of a consignment is reported, consignees should
be advised to obtain signed certificate of the delivery authorities on the reverse of the Receipts
certifying that the packages are not available for delivery or obtain a separate shortlanding or
non-delivery certificate. The consignee should be requested to lodge a valued claim on the
carriers by Registered Post Acknowledgement due within a period as set out in para 7 below.
Tracing agents should also be engaged, whenever necessary.
b) After scrutiny of the relevant documents, settlement of claim shall be proceeded with. If the right
of recovery against the carriers has been prejudiced in any manner, the settlement shall be as
set out in para 9.

6.2 CLAIMS FOR PILFERAGE AND OTHER DAMAGES

a) When consignment is offered for delivery by the carriers in externally damaged condition, the
claimant is normally required to observe the following wherever possible.
i) apply for open delivery before clearance;
ii) lodge a protest in writing under Registered A/D if open delivery is refused by the carriers.
The consignment may be cleared, wherever possible, after an insurance survey;
iii) not to give clean receipt to the carriers in such cases;
iv) file a notice of claim on the carriers within the prescribed time limit.
v) There is no need to verify vehicular documents and driving licence of the driver
irrespective of the cause of loss.
vi) Insured should not be penalized for overloading of the vehicle unless he is privy to
overloading.
7. The statutory time limits for lodging claims and for filing suits are as under :
Negligent Party Time Limit for Lodging claim Time Limit for filing suit.
7 days from the date of discharge Within 6 months from the date of discharge
Major Ports (after giving one month’s notice )
Steamer Company Application for steamer survey of goods should 1 year from the date of discharge – as per
be within 3 days of date of discharge. Notice of Hague Visby Convention
claim to be served immediately but not later than 2 years from the date of discharge – as per
1 year from the date of discharge. Hamburg Convention
Custom Authorities Refund of Duty should be claimed within 6 month
from date of payment of duty.
Multimodal 9 months from the date of discharge or as
16
 applicable at the material time.
Rail Carriers 6 months from date of booking(as per Sec. 78B 3 years from date of delivery or date when
of the Indian Rly. Act) consignment ought to have been delivered
(as per Article 10 of the Limitation Act).

Motor Lorry 6 months from the time loss Or injury came to - do –

knowledge(Sec. 10 of the Carriers Act)
Air Freight Immediately 2 years from the date of arrival at destination
or the date on which aircraft ought to have
arrived (as per Indian Carriage by Air Act).
Postal Authorities Immediately 3 years from the date of postal receipts
NOTE :As per Section 80 of the Civil Procedure Code whenever a suit is required to be filed against the Govt. two
months’ notice is required to be given before filing a suit and this period is added to the period of filing suit. Such notice is
to be given to Railways and Postal Authorities.

8. CLAIM SETTLEMENT ON DESPATCHES BY AIR AND POST (IMPORT AND EXPORT)

Same procedure as mentioned in respect of Sea Dispatches shall generally apply.

9. GENERAL
9.1 Should the claimant be unable to produce the original policy or Bill of Lading, which is negotiable
documents, and if it is reasonably established that they are entitled to receive the claim amount, the
claim may be settled with them against a Letter of Indemnity executed on requisite stamp paper.
9.2 a) In cases of claims under open policies where no insurance document is issued, if settlements
have to be effected with and payments have to be made to consignees, a general letter of
authorization to that effect should be obtained from the Insured.
a) In other cases payments should be made only to the last holder of the original document.
9.3 Payment of fees for cargo discharge supervision should be treated as administrative expenses and
should not be included in the claim. However expenses incurred for tracing a missing cargo should
be treated as claim expenses and same procedure as in 9.2 above for survey fees will apply.
9.4 The dealing office claims section should be alert and advise the policy issuing office suitably in the
following cases.
a) Where repeated claims are being made by the same consignee or shortages from sound cases
are reported on dispatches made by the same suppliers.
b) Where repeated claims are made by the same Insured under declaration stated to have been
omitted to be made under the open policy and requiring acceptance in terms of the Declaration
Cause of the Open Policy.
c) Where repeatedly open delivery is not being taken, thereby prejudicing recovery from carriers.
9.5 All war claims shall be settled only in consultation with the Regional Office/Head Office.

9.6 Marine Insurance being international in character, the practice followed overseas in case of export /
import claims may be given due consideration and claims can be dealt with suitably after recording
the reasons. In other cases the dealing office may use its discretion to effect settlement of Non-
Standard claim as per the guidelines prescribed in this regard. Where the right of recovery from the
carriers/third party is prejudiced the claim amount payable shall be restricted to assessed loss less
amount of recovery prejudiced.
9.7 Where there has been inordinate and avoidable delay in clearance and in consequence the loss has
been discovered after cover under the policy had ceased, but it cannot be clearly established either
way whether the loss had occurred during the currency of the policy or after, benefit of doubt may be
given in favour of the claimant, and reasons recorded in detail.
9.8 Where it can be established that the loss had occurred during the currency of the policy but there is
possibility of aggravation of loss due to delay – deduct probable loss due to aggravation.

17
10. RECOVERIES FROM THIRD PARTIES
All recovery claims shall be properly followed up and if no settlement is received from the carriers within a
reasonable period or if carriers repudiate liability, the dealing office’s legal adviser shall be requested to
give his opinion on the question of filing a suit based on our chances of success and the cost involved
compared to the claim amount. A decision regarding legal action shall be taken by the official authorized
to settle the claim. After a suit is filed, close watch shall be kept to ensure its proper conduct by producing
necessary witnesses and adducing adequate evidence. When a suit is filed, the legal adviser should be
requested to give a list of documents that will be required as evidence in a court of law, and action should
be taken to collect such documents from the claimant or request the claimant to preserve such
documents.

11. SALVAGE DISPOSAL

Arrangements shall be made to dispose of salvage expeditiously. The procedure as laid down for disposal
of salvage shall be followed. Salvages in overseas countries shall be disposed off following the procedure
followed in those countries.
********************

18
 MARINE HULL INSURANCE CLAIMS
1. GENERAL

1.1 For the purpose of convenience and also in view of the different nature of deployment, operations
and hazards encountered, all types of Marine Hulls for the purpose of these guidelines are divided
into three groups:
a) Ocean-going vessels, registered under Merchant Shipping Act, 1956.
b)
i) Fishing Vessels licensed by Fisheries Department of State Government,
ii) Sailing vessels
iii) Coastal Vessels registered under Coastal Vessel Act 1838,
iv) Inland Vessels registered under Inland Vessel Act 1917,
v) Yachts/Pleasure Boats registered in various Ports/Yacht Clubs.
vi) Vessels during course of construction and repairs.
c) Oil & Energy Risks:
i) Exploration: Onshore/Offshore: Rigs, Wells, Assets& Liability etc.
ii) Construction: Well head, Offshore Platform, Processing Blocks & Living Quarters etc.
iii) Operational/Production: FPSOs, SBMs, Transfer Pipelines, Xmas trees, etc.
1.2 The types of claims which occur in connection with Hull insurances are:
a) Actual Total Loss/Constructive Total Loss
b) Partial Loss
c) Salvage Charges - salvage awards or salvage under contract
d) General Average
e) Collision Liability/ Wreck Removal
f) Sue and Labour Charges
g) Liability Claims falling under the P&I Section of the policy where applicable
h) Pollution and contamination claim
i) Personal Accident Claims for crew of sailing/Fishing Vessels
j) Loss of hire claims
1.3 Surveyor appointment
a) Every claim has to be referred to IRDAI empanelled Marine Hull Surveyor for loss Assessment.
The Surveyor shall have to undertake the survey assignment immediately on allotment and
follow up till finalization of loss assessment and issuance of Survey Report. Survey status
update has to be sent to Underwriting Office and Hull Department at regular intervals.
1.4 Loss Adjustment:
a) the following claims should be referred to the professional loss Adjusters:
i) G A Claims
ii) Collision liability claims
iii) Claims where multiple interests involved
iv) Though selection of the Average Adjusters is the prerogative of the Ship Owners, they
should be advised to take estimation of fees of Adjusters and notify to the Insurers as the
fee is reimbursed as part of claim.
v) Where necessary insurers can appoint loss adjusters.

2. PROCEDURE
19
 2.1 Ocean-going vessels as per 1.1 a) above
a) Internationally as well as in the Indian scene the practice relating to processing of claims on
ocean-going fleet have, over the years, been so standardized that it is hardly necessary to lay
down guidelines. Virtually everything is taken care of by the Hull Owners. i.e. the Insured, the
Surveyors, and the Adjusters. There is a general understanding with the clients that for losses
occurring in foreign waters, they are to contact the Salvage Association for deputing a surveyor
or Lloyds Agents or any recognized competent marine surveyor on behalf of the underwriters.
Salvage Association surveyors are the experts and need no instruction from the underwriters.
The Masters of the Vessels, by virtue of their qualification and experience are aware of the
procedure required to be followed in the event of a claim. Further, whenever necessary, they are
assisted by the owner's superintendent (representative) who acts with full authority, as if the
owner. Adjustment of the claim is recorded, by the Average Adjuster in a statement which is
carefully prepared after going through all the aspects of the claim, insurance cover, surveyor’s
recommendations and other evidences.
b) Claims relating to Ocean-going vessels, by virtue of the international character of the operation
of such vessels, involve commitments and final disbursements in foreign currencies under
certain circumstances including:
i) Guarantees provided on behalf of the Insured for Salvage Charges and or Collision liability
ii) Satisfying arbitration awards relating to Salvage remunerations
iii) Reimbursement of Collision liabilities
iv) Reimbursement of Repair Expenses
v) Legal expenses relating to Salvage Award, Arbitration and Collision liability as applicable
c) Expenses in Foreign Currencies require utmost caution and compliance of statutory regulations
to ensure non-infringement of the provisions of the Reserve Bank of India. Prior indication of
TDS, Tax Rules between countries involved must be ascertained and followed so as to avoid
possible disputes if any, at a later stage.

3. PROCESSING OF CLAIM AND DOCUMENTATION

3.1 Surveyor should be appointed only in the event of a partial loss or Total Loss where the vessel or its
wreck is available for physical inspection. In other circumstances, an Investigator may be appointed
wherever necessary to ascertain genuineness of the claim reported. The Insured must be advised in
writing to take all reasonable measures to avert or minimize a loss, when the vessel is under
distress/threat.
3.2 In the event of partial loss claims including Salvage Charges or Sue and Labour Charges, original
repair bills, cash memos, payment proof and similar documents to be obtained.
3.3 The original insurance policy is to be surrendered by the Insured duly discharged in event of an
Actual TL/CTL.
3.4 In case the loss took place in adverse weather conditions, it would be necessary to obtain a certified
copy of the Meteorological Department's report on the weather conditions at the time of the casualty
and particulars about weather signal provided during 24 hours before the casualty.
3.5 Sometimes the Owners and/or the crew of the affected vessel or the Vessel rendering
rescue/salvage services file affidavits in connection with the casualty or the rescue operation. Where
such affidavits are filed, certified copies thereof are to be obtained before settlement of the claim.
3.6 In addition, the following documents should be called for, wherever necessary:
a) Certificate of Valuation;
b) Certificate of Inspection;
c) Free Board Certificate before commencement of the voyage;
d) Cargo Manifest;
20
 e) Load Line Certificate;
f) Port Clearance Certificate;
g) Certificate of cancellation of Registration of vessel in respect of Total Loss Claims;
h) 64 VB compliance certificate;
i) Certificate of Class/Class Maintenance Certificate;
j) ISM Certificate;
k) Safe Manning Certificate;
l) Safety Management Certificate;
m) Document of Compliance;
n) Crew/Master Competency Certificate;
o) Quotations obtained before repairs, towing, dry docking etc.
p) Note of Protest, Casualty/Incident Report submitted to nearest Port or any other Authorities.
q) Last Port of call and any DG Shipping/Statuary circulars issued for that area for certain vessels
(Sailing Vessels/Dhows etc.):
r) Navigational/Meteorological warning, Piracy news, War, Hijacking, Terrorism, Illegal Trading of
Charcoal/ammunition reported.
s) History of vessel Ownership, Management, Classification, detainments etc.:
t) Technical Details/Photographs/Proofs to establish the Loss/Cause
u) Log Books
3.7 No Actual Total or Constructive Total Loss claim can be settled on the basis of either the Hull or
the Machinery value. For the purpose of deciding a claim whether Total Loss or not, the
aggregate sum insured of the Hull and machinery is to be compared with the cost of
repairs/retrieval.
3.8 Partial loss claims are to be processed and settled on the basis of Surveyor's findings,
recommendations, certified cash memos and bills related to loss. The appropriate Policy
Deductibles like Additional Perils Deductible, Additional Machinery Deductible, Collision
Deductible and Third Party Deductible must be applied before arriving at net payable loss.
3.9 The Surveyor should ensure that all statuary rules and regulations have been fully complied
with.
3.10 Abandonment of a vessel’s wreck in writing is a pre-requisite for considering a claim as
Constructive Total Loss basis. As a matter of practice, insurers must decline, prima facie,
acceptance of the abandonment. However this does not legally diminish the Insured's claim for
ATL/CTL once the Letter of Abandonment is issued by the Insured and received by the Insurer.
Notwithstanding this,
a) the Insurer must refuse acceptance of abandonment of wreck till the liabilities attaching to
the wreck (Port and other dues, statutory requirement of wreck removal in case of vessels
sunk in navigable channels etc.) are fully ascertained.
b) avoid and divest all proprietary rights or lien on the damaged vessel.
3.11 As far as possible efforts should be made by the Surveyors to arrive at assessment on net of
salvage, otherwise it shall be difficult and uneconomical for the underwriters to get involved in
salvage 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 the same should be
disposed off as early as possible as per the guidelines.
3.12 In all cases the identity of the vessel as declared in the Proposal form and as shown in the
policy is to be matched with that of the vessel actually involved in the casualty. Colour
photographs (minimum photos with clear picture) to form part of Survey Report.

4. SPECIAL REQUIREMENTS FOR DIFFERENT CLASS OF CLAIMS

4.1 Sailing Vessels

21
 The documents required for settlement of Sailing Vessels Hull claims are:

i) A certified copy of the Tindal" s Note of Protest or declarations made before a Notary Public, a
Magistrate or any Customs/Port Authorities nearest to the place of casualty. In the event of a
loss in foreign waters foreign Notary Public or Magistrate or similar authorities will issue the
certificates.
ii) Casualty Form No.6 issued by the Mercantile Marine Department, where the vessel is totally
lost.
NOTE: Casualty Form No.6 will be available only if any member of the crew or the Tindal has survived
the casualty. If all the crew-members are missing the Casualty Form No.6 cannot be issued. However,
in such cases, the Mercantile Marine Department issues a Certificate as under:

CERTIFICATE

This is to certify that according to reports received from ________________________ sailing

vessel _________________________________________________________" belonging to
__________________________________________________________
Registration No. ________________________appears to have been missing/totally lost along
with all its crew-members on or about due to ____________________________ Since then
nothing has been heard of the vessel and its crew.

Place: (Principal Officer)

Date: Mercantile Marine Department

iii) Survey Report from a competent licensed surveyor showing the details of the loss, the
circumstances giving rise to the loss and signed statements of owners/crew etc. regarding the
loss and assessment of the loss.

4.2 Fishing Vessels

a) The preliminary procedure to be followed on receipt of claim intimation with regard to fishing
vessels is virtually the same. In view of the localized and small scale operation, 'Salvage
Charges' covered under the Fishing Vessels' policy is to be seen differently as neither the
Lloyd's Open Form for salvage agreement nor any international professional salvor is ever likely
to be involved in salvaging such vessels. In most of the cases it will be contracted salvage and 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 are both actually incurred and
judiciously and reasonably incurred to avoid or minimize a loss that would otherwise be
admissible under the policy.
b) The documents required for the settlement of Fishing Vessels Hull Claims are
i) Survey and/or Investigation Report
ii) Registration Certificate, if any issued by the concerned authorities
iii) Weather Report for the Date of loss and time from the Meteorological Department/Port
Authorities in case of adverse weather claims
iv) Affidavits and/or statements by the owner, Tindal or any member of the crew, if made to
any of the authorities
v) Certificate of cancellation of registration of vessel in respect of total loss claims.

NOTE

22
 (a) Until registration of Fishing Vessels is made compulsory in all States having a coast line (i.e.
Gujarat, Maharashtra, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, Orissa and West Bengal)
non-registration shall not be considered a breach notwithstanding the warranty included in the
policy.
(b) If the reasons for non-registration of a fishing vessel are explained to the satisfaction of the
Insurers,non-compliance of the relevant warranty may be condoned.
(c) Unless it is conclusively established that presence of Watch and ward would have prevented the
loss, non-compliance of the relevant warranty may be condoned.
(d) Benami ownership or hiring out of fishing vessels shall not be deemed to be a breach.

4.3 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. Any observation in the Survey Report
for a partial claim relating to inadequacy of the maintenance of the structure should be kept in mind.

4.4 Oil And Energy Claims

a) Oil & Energy Risks are high valued risks, often insured through Reinsurance support. Immediate
notice of claim has to be given to Hull Department, Head Office for arranging Survey and follow
up.
b) The Assured must be advised to provide all necessary documents pertaining to the specific risk
and co-operate with the Underwriters in processing the claim.
c) Loss provision has to be made in consultation with Hull Department, Head Office.

5. SURVEY REPORT
5.1 A Survey Report must contain the following particulars/comments:
a) General
i) Name / owner of the vessel;
ii) Identity of the vessel including Registration particulars and validity thereof
iii) State of maintenance of the vessel/Certificate of Class
iv) Comments on the quality and experience of the Master/Tindal and Crew
v) Comments on valuation
b) Details of the Casualty
i) Date, Time and Place:
ii) Cause of Loss:
iii) Circumstances of the loss/Detailed damages happened on the Vessel
iv) Loss Minimization efforts:
v) Liability as per Policy Coverage:
vi) Comments as to how the loss could have been prevented or avoided:
vii) Quantification of reasonable cost of repairs/replacement cost, Salvage, Sue &Labour etc.
wherever applicable.

23
c) On Warranties Applicable
Comments on whether the terms of the applicable warranties have been complied with in
particular:
i) Trading Warranty
ii) Carrying Capacity
iii) Weather Warranty
iv) Lay Up Warranty
v) Watch and Ward Warranty

d) Total Loss Claims -Actual Total Loss/Constructive Total Loss

i) Corroborative evidences should be furnished. Colour photographs should be attached
ii) Salvage Prospects of the vessel or the engine and, or any other parts of economicalvalue ;
iii) Salvage value of the wreck and the attendant cost in recovering the wreck, comments on
economic viability keeping in view the liabilities attaching to the wreck.
iv) Original of the Certificate/Letter of cancellation of Registration of vessel

e) Partial Loss
i) Recommendation for repairs:
ii) Estimated cost;
iii) Name of repairers:
iv) Repair bills duly certified as fair and reasonable:
v) Salvage value of the parts replaced.

f) Collision Claims
i) Comments as to the direction speed and angle of blow
ii) Opinion on degree of blame attaching to each vessel.

NOTE: Additionally the surveyors are requested to:

(a) Arrange under instruction from the Insurers for a joint survey of the colliding vessels:
(b) Arrange for exchange of letter between the owners of colliding vessels:
(c) Arrange for reporting the casualty to the appropriate authority. viz. Conservator of Ports or
Captain of the Port or MMD under whose control the area falls;
(d) Report on the prospects of recovery from the vessel, responsible for causing collision.

g) Sue and Labour/Salvage Charges

i) The term is applied to cover expenses incurred for saving/salvaging/loss minimising more
in the nature of Sue and Labour. The surveyor is required to:
(a) Comment on:
(i) the adequacy of the efforts made;
(ii) whether the actions taken were necessary in the circumstances of the case:
(iii) whether the expenses incurred are reasonable and fair.
(b) Undertake
(i) To certify the bills of expenses:
(ii) To obtain corroborative evidence from the local people of the particular trade
and departmental officials.

24
 h) Log Book
Extract from Log Book(s) where maintained, relating to the casualty and vessel's behavior
during the fortnight prior to the event giving rise to the claim be obtained.

6. PAYMENT
6.1 Payment should be made to the Assignee under the policy, however, where "No Objection
Certificate" is given by the Assignee; the claim may be paid to the Insured.
6.2 Discharge should be obtained from the Assignee; In case NOC is issued by the Assignee then
discharge should be obtained from Insured, and also the Letter of Subrogation. Letter of Subrogation
should be, where required, so worded as to ensure that no liability for removal of wreck etc. devolves
on the Insurers.
6.3 Cash call is to be made as per the coinsurance agreement.
6.4 After payment of the claim, survey fees and expenses, the recovery proceedings, like Co insurance,
Reinsurance, Salvage, Collision Liability & against Third Parties must be commenced immediately.

*******************

25
 MOTOR OWN DAMAGE INSURANCE CLAIMS
1. For the benefit of the claimants, attach the check list (as per Annexure ‘A’) to the claim form to be
submitted for completion in respect of Own Damage, Third Party and theft claims. This will facilitate the
claimant to follow the required procedure for expeditious disposal of the claim.

2. OWN DAMAGE
2.1 The claims under this category are restricted to loss of or damage to the vehicle caused by
insured perils.
2.2 A suitable note should be prepared on receipt of claim intimation if by way of telephonic or oral
message, confirming the message, the date and time of its receipt.
2.3 On receipt of claim intimation from the Insured, either written, telephonic or oral, the dealing office
is required to ascertain immediately:
a) Whether or not an insurance policy exists or is in force on the date of occurrence in respect of
the vehicle reported to have been lost or damaged.
b) Whether loss or damage is within the scope of the policy, and
c) To send a claim form (as per Annexure B) for completion and return along with an estimate
for repairs where applicable.
d) Where the policy is not in existence or the loss is not within the scope of the policy, the
Insured should be immediately advised accordingly by Registered Post AD.
2.4 In case where the loss is reported to an office, under a policy issued by any other office of the
Company, the policy issuing office should be immediately requested to furnish the details of the
policy as on the date of accident. This is necessary as any material alteration to the policy just
prior to the accident may have a vital bearing on the disposal of the claim. The office to which the
claim is reported should process the claim as if the policy is issued by the same office. The final
payment may be made by either office, as per Company’s procedure.
2.5 After confirming the policy coverage, the claim should be immediately registered in the IT System
and a claim number, allotted serially. Simultaneously, a claim docket should be opened.

3. APPOINTMENT OF SURVEYOR

3.1 Surveyor should be appointed immediately but not later than 72 hours of the receipt of intimation
of claim or within the TAT agreed in case of Tie-up policies.
3.2 While entrusting the Survey, the surveyors should be provided with the policy details in the
Intimation form (Annexure C). The surveyors are expected to submit their Survey Reports within
seven days from the date of their appointment.
3.3 In case of delay on the part of the Surveyor in submitting Survey Report without assigning valid
reasons, his explanation may be sought and recurrence of such events should be brought to the
notice of R.O.
3.4 Whenever there is a disagreement with the Insured and or the repairer on certain vital issues, the
surveyor should issue status report indicating specifically, the points of disputes/ disagreement.
The Branch/ Divisional Manager may act as a liaison between the Surveyor and the Insured and
try to resolve the disagreement in the best possible manner without any favour or fear.
3.5 In respect of claim within Rs.5000/- for private cars and commercial vehicles and Rs.2000/- for
motor cycles and scooters, the BM/DM has the discretion to waive survey and settle the claim on
the basis of the Claim Form and estimate, after being fully satisfied that the claim is admissible
under the policy and that the amount claimed or the repair charges are reasonable and consistent
26
 with the extent of damage. The claim amount may be scaled down if the charges are found to be
too high and suitable depreciation on parts replaced should be taken into account. In cases of
second and subsequent claim in the same policy year, survey should be arranged irrespective of
the claim amount.
3.6 If the claim amount does not exceed Rs.50,000/-. Company’s In-House Surveyors wherever
available may be sent to assess the loss.
3.7 For claim amounts in excess of Rs.50,000/- independent licensed surveyor must be appointed as
per general regulations.

3.8 SPOT SURVEY

a) In the case of Major accidents where likely liability is in excess of Rs. 1 Lakh, spot survey is
required. Where TP injury or property damage is there, spot survey is required. In cases
where spot survey is not arranged, the authority competent to settle the claim may waive it
and reasons to be recorded, or may deduct 10% from the assessed loss.
b) Spot Survey Report and Final Survey Report should be as per Annexure D and Annexure E
respectively.

4. DOCUMENTS TO BE VERIFIED

Following documents are normally required to be verified by the Surveyor. However, whenever found
necessary, Divisional Office/ Service Hub may undertake re-verification.
a) Private Car/ Motor Cycles / Scooters
i) Driving License
ii) Registration Certificate Book
b) Commercial Vehicles.
i) Driving License
ii) Registration Certificate Book
iii) Fitness Certificate
iv) Load Challan
v) Route Permit
vi) Trip Sheet
vii) Previous Insured Vehicle History to be verified from IIB

5. POLICE REPORT/ FIRE BRIGADE REPORT

In respect of own damage claims, where the surveyor is satisfied and has confirmed the cause of
loss, the Police First Information Report / Case Diary and/or Fire Brigade Report need not be insisted
upon where there is no TP personal injury or Property Damage.

6. TOTAL LOSS CLAIMS

6.1 In case of settlement of claim on ‘Total Loss’ basis other than by theft, all the documents stated in
para 4 are required to be collected. After finalization of claim, the damaged vehicle should be taken
into possession and kept in a safe place, as best as can be arranged to prevent it from further loss or
damage. Immediate arrangements should be made for its disposal as per Company’s guidelines for
disposal of salvage. R.T.O. should be informed by Registered A/D Post.

27
 6.2 Total Loss claims can be finalized on Net of Salvage basis also. In such cases, a second opinion on
salvage value should be taken from another independent surveyor. In all such Total Loss claims,
policy shall be cancelled w.e.f. date of loss without giving refund of premium.

7. CASH LOSS SETTLEMENT

In case of major losses where loss is extensive but does not warrant consideration of the claim on
Total Loss basis and if the appointed surveyor, suggests settlement on ‘Cash Loss’ basis and this is
agreed to by the Insurer and by the Insured, the policy should be cancelled with effect from the date
of loss without giving any refund of premium, R.T.O. should be informed by Registered A.D. Post.
Cash Loss settlement option should not be encouraged. However, in exceptional cases, if it is to be
done, minimum 25% of assessed loss (excluding taxes) may be deducted.

8. THEFT CLAIMS

8.1 Claims for theft of accessories and parts may be settled on production of Bills, Cash Memos without
waiting for Final Police Investigation Report subject to production of First Information Report/ Case
Diary. In case of claims exceeding Rs.5000/- for theft of major parts accessories extra fittings,
Surveyor or In-House Surveyor may be appointed for inspection. Before final settlement, a Letter of
Indemnity and Subrogation should be obtained from the Insured.
8.2 In case of theft of entire vehicle, the Final Police Investigation Report must be insisted upon.
Investigation should also be arranged in all such cases. Investigation shall be completed within 30
days from the dated of appointment. Such claims, however, may be processed after obtaining all
claim papers including a certified copy of First Information Report. If insured submits all claim
documents other than Non-traceable certificate / Final Police Report, then on expiry of 90 days from
date of registration of FIR, On Account Payment may be made if company appointed investigator
confirms genuineness of theft. A specially worded discharge receipt must be obtained. The balance
may be paid on receipt of Final Police Investigation Report after obtaining Indemnity and Subrogation
Letter and the discharge voucher in full and final settlement of the claim.
8.3 If the vehicle is recovered before or after final payment, the insured will have the option to repay the
claim amount already paid and retain the vehicle. If the vehicle is found damaged at the time of
recovery, the Insured will be indemnified against loss of or damage to the said vehicle which might
have occurred while the vehicle was not in his custody or control. In such case, the Insured should be
advised to obtain a recovery memo from Police and get the vehicle surveyed at the Police Station
before taking delivery.
Note 1
A letter of undertaking from the Insured to take back the vehicle need not be insisted upon at the time
of ‘on account’ or final payment.
Note 2
Where circumstances so warrant, an Investigator may be appointed and his report be obtained
before making any payment.
8.4 In case of ‘Total Loss’ claims due to theft of the vehicle, in addition to a certified copy of the First
Information Report, the following documents should be collected from the insured before making ‘on
account’ payment.
a) Registration Book and Tax Book duly transferred in the name of the Insurers.
b) Letter of Indemnity and Subrogation.
c) All Ignition keys and Cabin keys (in case of commercial vehicles) depending on manufacturer.
d) Certificate of Insurance and original Insurance policy, if available.
e) Discharge voucher.
28
 8.5 Police and Registration Authorities should be notified in writing about having settled the claim on
‘Total Loss’ basis arising out of theft of the vehicle. They should be requested to advise the company
if the vehicle is recovered subsequently. Immediately after receipt of such intimation from 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.

8.6 Municipal Authorities where applicable and R.T.O. should be advised by Registered Letter with
acknowledgment due to record ‘non-use’ of the vehicle on account of theft and cancellation of
Insurance Certificate.

9. PROCESSING OF CLAIMS

9.1 The claim form and other records should be carefully scrutinized to check up the following.
a) Whether ownership of the vehicle as noted in the registration certificate is the same as noted in
the policy.
b) Classification of the vehicle and whether it has been properly covered under the policy and used
in accordance with the ‘limitation as to use’ stipulated in the policy.
c) Whether premium has been paid on the basis of the correct carrying capacity in the case of
goods/ passenger vehicles and whether there has been any breach of warranty pertaining to the
carrying capacity.
d) Bill Check report be taken from Final Surveyor whenever the Claim settling authority deems it
necessary.
e) Where the repairer’s bill includes the charges for replacement of parts, separate cash memos
from the dealers for the parts allowed for replacement may not be insisted upon as loss
assessment by the surveyors should not be exceeding the catalogue prices. Nevertheless in
case where catalogue price of any one part exceeds Rs.10,000/- or of all parts exceeds
Rs.50,000/- the vehicle must be re-inspected by the Surveyor and confirm actual replacement of
parts authorized.
9.2 Where Survey Report is very clear regarding cause and extent of loss and the liability under the
policy is not in doubt, then the person dealing with the claim need not put up an elaborate note
paraphrasing Survey Report and instead a brief note indicating that ‘the claim is in order and may be
paid’ would be sufficient. However, if the claim involved special features, e.g. breach of condition,
breach of warranty etc. a detailed scrutiny note with recommendation may be put up.
9.3 Authorization to the Insured/ Repairers may be issued within one working day from receipt of Survey
Report. In case of any requirements, the matter should be immediately taken up with up with the
Insured. Assistance of the concerned Marketing Personnel should be enlisted to expedite compliance
with all the requirements.
9.4 Endeavour may be made to settle the claim within three working days after receipt of the final bills
and satisfaction note.
9.5 In case of Auto Tie-up policy, authorization of repairs must be given by claim officer within two
working days from the date on which claim is reported. Admissibility must be confirmed before
authorization.

10. NON STANDARD CLAIMS

29
 Following types of claims shall be considered as non-standard and shall be settled as indicated below
after recording the reasons.
a) Goods Carrying Vehicles
Sr. Description Percentage of settlement
No.
i. Under declaration of GVW NIL recovery
of vehicles upto 12,000 kgs.
ii. Under declaration of GVW If the difference between the licensed GVW and that declared for
of vehicles above 12,000 insurance is one ton or less, then deduct three years’ difference in OD
kgs premium from the amount of claim. Currently running policy also to be
rectified by paying additional premium.
Where the difference is more than one ton, deduct three years’
difference in OD premium or 25% of the claim amount whichever is
higher from the amount of admissible claim subject to maximum
Rs.50,000/-. Currently running policy also to be rectified by paying
additional premium.
Important Note: If there is under declaration of GVW, three years’ difference in TP premium be deducted from the claim
amount irrespective of GVW of the vehicle in both above cases. The TP premium recovery shall be in addition to OD
premium recovery.

Overloading of vehicles beyond licensed carrying Percentage of settlement

capacity
a) Where excess load is not exceeding 5% of GVW of the Pay the claim in full
vehicle
b) Where the excess load is beyond 5% of GVW of the vehicle Deduct 5% of admissible claim.
but not exceeding 7.5% thereof
c) Where the excess load is beyond 7.5% of licensed carrying Deduct 10% of admissible claim
capacity but not exceeding 10% thereof
d) Where the excess load is beyond 10% of licensed carrying Pay the claim not exceeding 75% of
capacity but not exceeding 12.5% thereof. admissible claim.
e) Where the excess load is beyond 12.5% of licensed Claim to be repudiated
carrying capacity

b) Passenger Carrying Vehicles

Sr. Description Percentage of settlement
No.
i. Under declaration of licensed carrying capacity of vehicles Deduct 3 years difference in premium
from the amount of claim or deduct
25% of claim amount whichever is
higher
Important Note: If there is under declaration of licensed carrying capacity, three years’ difference in TP premium be
deducted from the claim amount. The TP premium recovery shall be in addition to OD premium recovery.

Overloading of vehicles beyond licensed carrying Percentage of settlement

capacity
a) Where excess load is not exceeding 10% of licensed Pay the claim in full
carrying capacity of the vehicle
b) Where the excess load is beyond 10% of licensed carrying Pay up to 75% of admissible claim.
capacity of the vehicle but not exceeding 25% thereof
c) Where the excess load is beyond 25% of licensed carrying Claim to be repudiated
capacity
For any breach of policy condition and warranties such as permit violation, absence of permit, non-registration of
vehicle, fitness validity, reference may be made to company’s circulars issued from time to time.
11. GENERAL

30
 11.1 Photographs are required to be taken of all damaged vehicles where the estimate of repairs
exceeds Rs.25000/- for four wheelers and Rs.10000/- for two wheelers.
11.2 Surveyors should be instructed to strive for agreed basis of settlement of repair charges and the
depreciation (except on Zero Depreciation policies) on parts replaced as far as possible. They
should be fair in their assessment.
11.3 When a claim is settled with the garage on receipt of Satisfaction Voucher duly signed by the
Insured or where a claim is settled with the financier, the Insured should be advised by
Registered A.D. letter at the last known address about settlement of the claim with the garage or
with the financier.
11.4 In case of second and subsequent claim during the same policy year, surveyor other than the
one appointed in the first claim, should be deputed.
11.5 It is necessary and important that all the outstanding claim files are reviewed periodically.
Several of the outstanding claims are such where Insured is no longer interested in the claim
due to small amount or the parts reported stolen/ missing having subsequently been traced etc.
Such files need constant follow up and where there is no response from the Insured to the
requirements of the Company after a reminder, sent preferably under Registered
acknowledgment due, the claim file can be closed as NO CLAIM. Files which are over two years
old and are practically dormant can also be closed as NO CLAIM.
11.6 Such files closed as NO CLAIM should be kept separately so that if the claim is required to be
re-opened at a future date, the same should be easily made available.

12. SURVEY FEES

12.1 Survey fees should be paid as per prescribed scale promptly and independent of claim
settlement.

12.2 Where after survey and investigation, a claim is either withdrawn or is assessed as a ‘NO
CLAIM’ or where the claim involves considerable extra work either for investigation or to
disprove exaggerated claim made by the claimant or where suspected fraud is required to be
investigated, the fees may be discussed with the surveyor by the Regional Manager and a
departure may be made from the scale of fees with reasons being recorded in writing.

31
 Annexure A
MOTOR CLAIM CHECK LIST

OWN DAMAGE
• Inform the police about the accident, if third party injury/ property damage is/are also involved.
• Note the names and addresses of witnesses present at the time of accident.
• Inform the insurers immediately, quoting policy no. to enable them to arrange for a survey.
• Obtain a claim form from the Insurance Company and fill it up correctly and completely.
• Submit an estimate of repairs to your insuring office or the nearest office of the Insuring Company.
• Do not undertake the repairs till the insurers approve the estimate of the cost of repairs/ replacements.
• Give any additional information if available. That helps the insurers settle the claim faster.
• Please keep ready and present the following documents to the surveyor for verification when asked
for:
• (a) Driving License (b) R. C. Book
• In Case of Commercial Vehicles, please keep ready;
• (a) Route Permit (b) Fitness Certificate (c) Badge (Taxi) also.
• After the repairs are over, you will have to sign a ‘satisfaction’ certificate and submit to the repairers.

THEFT
• If the vehicle is stolen, inform the police and the insurers at once, giving your name and address,
phone number, Engine number, Chassis number and the Registration number of the vehicle.
• If the R. C. Book is also lost along with the Car, obtain a duplicate from Transport Authorities
immediately.
• Keep regular liaison with police in regard to the progress of investigation.
• If the vehicle is not traced after a reasonable period, get a report from the police to that effect.
• If the vehicle is traced inform the insurers as well as the police immediately.

PLEASE NOTE
Insurers are at your service to settle your claim as early as possible.
If you do not respond to the letters of the insurers or present the required documents within a reasonable
time, your claim may be treated as ‘NO CLAIM’. Hence be prompt and co-operative with the insurers to
the best of your ability.

32
 MOTOR THIRD PARTY INSURANCE CLAIMS
1. GENERAL

1.1 As per Motor Vehicles Act, 1988, the Third Party Bodily Injury (TPBI) claims payable under the policy
are:
a) NO FAULT LIABILITY CLAIMS (Chapter X, Sec. 140 of the Motor Vehicle Act. 1988)
For this liability, negligence of the owner/ driver of the vehicle involved in the accident is not
required to be proved.
Rs. 50,000/- in case of death.
Rs. 25,000/- in case of permanent disablement
Permanent Disablement has been defined by the M.V. Act as under:
(a) Permanent privation of the sight of either eye or the hearing of either ear, or privation of
any member or joint; or
(b) destruction or permanent impairing of the powers of any members or joint: or
(c) permanent disfiguration of the head or face.

b) FAULT LIABILTIY (Chapter XI of the M. V. Act)

For this liability negligence of the owner / driver of the vehicle involved in the accident is
required to be proved.

c) PAYMENT OF COMPENSATION ON STRUCTURAL FORMULA: (Chapter XI U/s. 163(A) of

M. V. Act 1988) for persons having income not exceeding Rs. 40,000/-p.a.
1.2 Intimation of Third Party Bodily Injury claims is received either through:
a) the Insured or
b) Victim(s) of the accident (victim(s) wherever used in this Manual shall include the injured
persons or legal heir/s of the deceased) or
c) Motor Accident Claim Tribunals(MACTs) / Courts by summons or
d) Accident Information Report (AIR) from police or
e) Any other means such as News Report, TV News or call center etc.
1.3 Upon such intimation(s), Investigator to be appointed in all the cases to obtain the following:
a) Full details of the accident and persons involved
b) Post-mortem Report ( in case of death)
c) Medical Report (In case of Injury)
d) Details of social and marital status of the victim(s)
e) Income of the victim/s
f) Details of dependent/s and other legal heir/s
g) All Police and Criminal Case Papers
h) Age of the victim(s) / legal heir(s)
i) Claim form duly filled in & signed from the insured, along with copies of Insurance Policy,
Driving Licence, RC, Permit & Fitness Certificate, as applicable.
1.4 When intimation is received by way of Summon from MACT, Advocate must be appointed
immediately, in addition to appointment of investigator as under 1.3.
1.5 The department should register the claim in the system and open the claim docket.

2. NO FAULT LIABILITY CLAIMS

2.1 No fault liability provisions under the M.V. Act being in the nature of social welfare measurer, the No
Faulty Liability claims have to be expeditiously settled and neither the Company nor the advocates

33
 appointed by the Insurance Company should raise frivolous pleas where it is established that the
vehicle is insured with the Company.
2.2 In addition to the claim form duly completed by the Insured the following documents should be
obtained.
a) First Information Report/ Copy of the Police Diary.
b) Post – mortem Report, where applicable.
c) Death Certificate, where applicable.
d) Medical certificate in case of permanent disability

3. FAULT LIABILITY CLAIMS

3.1 On receipt of intimation from the Insured or the victims of the accident, a completed Claim Form may
be obtained from the Insured along with his version about the accident and full details of the victims.
Also obtain Police Investigation Report and whether the driver of the vehicle at the time of the
accident was charge sheeted by the Police and the nature of charges. Thereafter ascertain whether a
claim is filed in MACT and collect relevant details from the victims as under:
a) Death Claims
i) Post Mortem Report or Medical Certificate
ii) Social status of the deceased, his annual income, dependency (his financial contribution to
his family) and number of dependents of the deceased.
b) Injury Claims
i) Medical Report on the nature of injuries sustained and the treatment prescribed.
ii) Expenses of medical treatment.
iii) Nature of any permanent (total or partial) disablement due to the accident.
3.2 Investigator should be appointed to investigate into the above details. Such investigations are to be
arranged promptly as any delay might lead to loss of essential evidence.
3.3 Compromised and out of court settlement: Based on the Investigator’s report and the documents
indicated in para 3.1 above, the office must try to determine the amount of compensation payable in
consultation with the advocate on the panel and the Regional Office, wherever required and the same
may be offered to the claimant(s) as a compromised settlement. This amount can be recorded with
the MACT as consent award and the amount is deposited with the MACT.
3.4 The advocate should be appointed and should be properly briefed.
3.5 The Company must closely follow up the case with the advocate. Written statements must be
examined by the legal officer or other competent official of the company before filing.
3.6 Advocate should be instructed to avoid seeking unnecessary adjournments.
3.7 When award is passed by MACT/ Courts, advocate must inform the Company immediately advising
the Company as to the reasonableness of the award.
3.8 If advocate feels that the judgment and/or award should be appealed against in the higher courts, the
Company should be suitably advised in writing immediately and before the period for appeal has
lapsed.
3.9 As far as possible, appeals should be avoided. Appeal may be filed where the lower court has erred
on the fundamental principles of law or certain important facts/ evidence have been ignored or where
the awards are far in-excess of the amount in consonance with the social status of the deceased.
3.10 The amount awarded should be deposited with MACT/ Courts forthwith, if no appeal is contemplated.
3.11 When the amount is paid directly to the victims, proper discharge voucher should be obtained.
3.12 Advocate’s fees should be paid promptly as per the scale laid down.
.
4. THIRD PARTY PROPERTY DAMAGE CLAIMS
4.1 Third Party Property Damage (TPPD) claims can be for;
a) damage to other vehicle.
b) damage to property other than vehicle.
34
4.2 In case of damage to other vehicle, there exists ‘Knock-for-Knock Agreement’ amongst all the
Insurance Companies. According to this Agreement, each insurer insuring the vehicle bears the loss
or damage to the vehicle insured with it, without claiming from the insurer of the other colliding
vehicle, under subrogation.
4.3 In case of damage to property other than vehicle, a competent surveyor may be appointed to survey
the property damage immediately on receipt of claim intimation.
4.4 A Claim Form duly completed should be obtained giving full description of the accident. In case of
immovable property, usually the vehicle involved is at fault. But in other cases, ascertainment of
blame is important.
4.5 First Information Report and Final Investigation Report of the Police should be obtained. The latter
may be waived if the surveyor could determine the cause of accident.
4.6 To call for
a) Driving Licence for inspection
b) R. C. Book for inspection
c) Bills of repairs and/or replacement of the damaged property or any other evidence of quantum of
loss.
4.7 On receipt of all the documents, claim may be proceeded with on the same lines as own damage
claims.
4.8 Salvage, if any, surrendered to the Company, should be disposed off as per the norms laid down for
disposal.

ANNEXURE A

THIRD PARTY CLAIM CHECK LIST

THIRD PARTY PERSONAL INJURY / PROPERTY DAMAGE:

• If any third party is injured in the accident remove him/her to hospital for treatment and inform
the police and the insurers immediately.
• If any damage is caused to the property of any third party due to an accident, inform the
police immediately.
• Also inform the insurers describing the nature of the loss damage.
• Do not accept any responsibility for the accident nor promise any compensation to any third
party who is involved in the accident.
• Take proper defence action in case of Police prosecution and keep the Insurance Company
informed.
• If you receive any notice of claim from the third party, MACT or a Court of Law, send the
same to the insurers forthwith unanswered.
• Send all notices and summons you receive concerning the accident directly to the insurance
company. They will attend to all of them on your behalf.

*******

35
 HEALTH INSURANCE CLAIMS

1. The health insurance claims are largely being processed by Third Party Administrators (TPA) and the
insurers have to authorize settlement / repudiation of the claims.

2. The insurers have to closely monitor the TPAs to ensure that the terms and conditions of the policy
are being complied with and insured are provided with the services as stated in the Insurance Policy.
The insurer should also monitor the TPA on the parameters laid down in the Service Level
Agreement (SLA) between Insurer and TPA.

3. The manual has brought out the appropriate processes which the TPA will have to follow for
settlement of claims.

4. TARGET TAT (TURN AROUND TIME)

IRDAI and respective insurers’ SLA have laid down TAT to be met for customer service delivery.
Below mentioned TATs are indicative and shall be revised as per individual insurers’ SLAs.
Particulars TAT
a) Preauthorization approval (new) 2 Hours
b) Preauthorization enhancement/discharge approval 1 Hour
c) Response to Pre-authorization query 1 Hour
d) Reimbursement claim processing 7 Days
e) Cashless Claim Processing 7 Days
f) Response to Reimbursement claim query (written) 2 Days
g) Response to complaint/grievance related to claim 3 Days

5. AUTHORITY MATRIX

5.1 Claims up to Rs. 100,000/- will be decided by TPA after identification and verification of policy details.
No cashless/reimbursement claim exceeding Rs. 100,000/- will be approved without the prior
approval of the Insurer. If the response from the insurer is not received within mutually agreed time,
TPA shall decide the claim based on merits.
5.2 Intimation shall also be sent to Insurer RO/DO/BO for:-
a) Every claim above Rs. 100,000/-
b) Every claim for conservative treatment with Length of Stay Exceeding 5 days.

6. GENERAL GUIDELINES

6.1 The terms and conditions of the policy issued will be paramount for claims admission and claims
assessment. The office will have to provide all necessary endorsements also to the TPA.
6.2 In case of any clarification required in the interpretation of terms and conditions of the policy issued
by the insurers, TPA will contact the Policy issuing office of the insurer.
6.3 The insurer shall issue a claim control number to all claims reported. One single claim number will be
allotted for each hospitalization claim and related Pre & Post hospitalization claims.
6.4 Insurers should provide documents for compliance of KYC requirements in general and in specific for
high value claims.
6.5 The customer is to be kept posted and informed at each stage of the claim. Any queries raised for
settlement of claim and status of claim have to be replied to promptly.
6.6 No Pre-Authorization/Claim settlement will be done in the absence of satisfactory check of the
beneficiary photo ID and other valid ID proof as defined.
36
 6.7 The guarantee of payment will be given only for the necessary treatment at reasonable cost of the
ailment covered and mentioned in the request for Authorization. Any investigations carried out at the
request of the patient but not forming the necessary part of the treatment will not be considered for
assessment.
6.8 In case there is agreement with the hospital for package rates/discounts for specified medical
conditions/surgeries, then only package/discounted rates will be paid. The TPA will ensure that under
no circumstances the payment exceeds the rates agreed.
6.9 In case where the hospital is in PPN but has charged more than the agreed rates, TPA shall realize
the excess collected by hospital and ensure refund of the money to the policy holder.
6.10 Intimation of claim beyond the time limit stated in the policy or beyond thirty days of discharge of the
insured person from hospital or beyond 30 days of post hospitalization is complete, should be taken
up for processing only after obtaining satisfactory explanation of the insured for delay in submission
of documents.
6.11 Repudiation Letters / Denial Letters will be sent to the insured only by the Insurance Company. The
repudiation letter to the insured must clearly and specifically state the reasons for repudiation and the
policy conditions under which the claim is being repudiated.
6.12 For Approved cases, an explanation of benefits or final summary of expenditure approved along with
payment details shall be sent to the Insured for both Cashless and reimbursement claims. A
summary of disallowed expenses will also be sent to the insured. Similar letter shall be sent to
providers for cashless claims.

7. PROCESS CHECKLIST

The TPA has to ensure the following is complied with:

a) 64 VB compliance.
b) All measurable policy conditions like capping on Room rent/ICU charges, specified ailments,
major ailments, co-payment etc. is incorporated in IT systems of TPA or validated manually.
c) For tailor made GMCs the validations for each policy to be incorporated by TPAs in their system.
d) Cashless Team of TPA will ensure monitoring of claim while the insured is in hospital.
e) Claims under Top up & Multiple Policies will be processed as per the guidelines provided by
individual insurers and IRDAI.

8. OUTSTANDING CLAIMS REVIEW

8.1 TPA shall scrutinize the claim documents at the initial stage regarding the medical and eligibility
aspect. Deficiency of documents, if any, and if amounting to more than the mutually agreed amount
between insurer and TPA, shall be intimated to the Insured and respective Underwriting Office within
7 working days. A reminder to send the same will again be forwarded to the Insured once after 15
days of first intimation if the deficient documents are not received or are partially received. Deficiency
of documents amounting to less than the mutually agreed amount between Insurer and TPA may be
ignored for the purpose of claim processing.
8.2 If there is no response even after 45 days, the TPA shall recommend claim closure based on
available information. Claims kept open due to exceptional reasons beyond insured’s control and
beyond 45 days will be reviewed and recommended to Insurers for closure on 60th day. Only
litigation/legal or Death Claims will be kept open beyond 60 days.
9. OMBUDSMAN/CONSUMER COURT/LEGAL CASES

9.1 Any summons etc. from court/consumer forum will be brought to the notice of concerned policy
issuing office of the insurer by the TPA.

37
 9.2 The office will prepare response after going through the file and take the assistance of TPA in
replying to the Ombudsman, Consumer Court etc.

10. STANDARD MIS AND REPORTS

The TPAs will have to provide continuous MIS /Reports for analysis by insurers. The basic MIS/Reports
are listed below:
a) MIS to track the TPA for performance:
i) TAT
ii) Aging
iii) Productivity
iv) Claims status wise - reported, paid and outstanding
b) Analytical MIS, Ratios and Reports
i) Top diseases and procedures
ii) Top hospitals
iii) Cashless vs. reimbursement claims – cost, LOS, hospitals, utilization etc.
iv) Network vs. non-network hospital utilization pattern
v) LOS, average cost, cost components, outlier cases
vi) Geographic location, product, age band, sum insured band, group client specific
vii) What if scenarios and reports
viii) Repudiation and no-claim analysis
ix) Fraud alerts, claim scoring and trigger based
x) Predictive modeling
c) Insurer specific MIS as required

11. FRAUD, ABUSE AND LEAKAGE CONTROL

11.1 A major issue in health insurance claims is fraud and misuse of the policy. Therefore the insurer
should insist that the TPA have a system/procedure to detect and control fraud.
11.2 To control fraud, abuse and leakage the TPA shall adopt following multi pronged strategy,
majorly driven through IT enabled system and skilled resources.
a) Fraud alerts and triggers – The list of fraud alerts given by insurers and known through
market shall be built into the system of TPA. Every cashless and reimbursement claim shall
pass through the same in first instance. Clearance on fraud angle, whether manual or
system driven will be required before processing the claim further.
The clean cases shall go straight through for processing and ‘suspect’ cases shall go
through senior doctors for review/relook of the TPA before being handed over to
Investigation team.
Once a claim is handed over to Investigation, further processing can resume only on clear
report.
b) Claim Score –TPA Claims team shall work with IT team of TPA to develop claim scoring
index to improvise trigger based alerts. Claim scoring index shall be regularly reviewed to
avoid ‘false alarm’ cases and subsequent increase in TAT for processing.
c) Abuse and leakage control, cost containment:
i) Clinical protocol/guidelines compliance – all cases pertaining to top 20 procedures
and high value (above Rs. 1 lakh) shall be run through clinical protocol compliance at
junior doctor level. Specific questionnaire for protocol compliance shall be part of
Pre-authorized approval process. Second opinion of expert doctor on panel shall be
sought wherever required.
38
 ii) Medical case management – high value complex cases shall be monitored and case
managed through a senior doctor
iii) Negotiation – cases with probability of negotiation, especially for lower rung hospitals
and high value claims, shall be triggered for negotiation by a specific doctor in the
cashless team, trained for negotiations based on logical parameters
iv) Breach of agreed rates, soliciting discounts, better rates from providers shall be
managed through Provider Network Management team, providing the team relevant
data and comparative reports
v) Medical audit of TPAs – to be conducted by insurers’ audit team periodically.
Review of fraud and abuse control efforts and outcomes by TPAs should be communicated to Insurers
with future corrective action taken by them.

39
 MISCELLANEOUS INSURANCE CLAIMS
1. Following are the general guidelines for processing of claims for all classes of risks written in the
Miscellaneous Department (other than Motor, Engineering and Rural Insurance business). Where the
claim is in respect of a risk covered under a package policy issued in Miscellaneous Department which
falls under a specified class of risk like fire, engineering etc. the procedures for settlement of claims for
that specified class of risk would apply. Claims which are not covered in respect of specified class of risk
are dealt with hereafter.

2. EMPLOYEE’S COMPENSATION INSURANCE

2.1 Temporary Disablement Claims
a) Claim Form duly signed.
b) Medical certificate in respect of the injured employee and leave certificate.
c) The claim is calculated as per E.C Act as per applicable percentage of monthly wages for every
fortnight of disablement.
2.2 Permanent Disablement Claims
a) Documents as above.
b) A memorandum of Agreement as per Employee Compensation Act (E.C. Act) (Form L) in
duplicate should be completed by the insured and signed by the injured employee.
c) The dealing office should calculate the compensation payable as per the schedule of the E.C.
Act on the basis of age group and monthly emoluments drawn by the employee and after
applying the appropriate multiplying factor.
d) The amount so calculated should be deposited with the E.C. Commissioner along with the
Memorandum of Agreement.
2.3 Fatal Claims
a) Claim form, Death Certificate as well as copy of Post Mortem Report.
b) Compensation should be calculated as per schedule of the E.C. Act.
c) The amount so calculated should be deposited with the commissioner with Form M- prescribed
by the E.C. Act duly filled in (this is done where settlement is done directly with the dependents
of the deceased employee).
Note:
i) The company is not liable for payment of fines and penalties imposed on Insured.
ii) The Claim Settling Office should take proactive approach in following up fatal E.C. claims
rather than keep waiting for the award from E.C. commissioner.

3. PERSONAL ACCIDENT INSURANCE

3.1 Permanent (Total or Partial) or Temporary (Total) Disablement Claims
a) The scrutiny of following documents is important whilst processing all P.A. claims.
i) Duly completed claim form
ii) Report of attending doctor either as a separate document or on the reverse of claim form if
provision is made thereof
iii) Investigation reports like laboratory test, X-rays and reports essential for confirmation of
the injury,
iv) Police reports, wherever necessary
v) Certificate of proof of age of dependent child in case the claim is under education grant
provision
vi) Medical bill corresponding to doctor’s prescription where medical extension is granted.
Note: Vitamins and tonics are deemed medicines ONLY if prescribed by the doctor, as a
part of treatment.

40
 3.2 Fatal accident Claims
a) The following documents need to be scrutinized.
i) Death certificate
ii) Post-mortem report
iii) Coroner’s report
iv) Inquest report wherever necessary / applicable
Note:
(a) The original documents may be returned if duly attested photocopies 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, 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 family members and relatives of the deceased that
they have no objection if the claim amount is paid to the claimant(s)
(iii) Surety bond executed by Gazetted Officers.
(d) In case of group policy the payment is to be made to the individual beneficiary.
However, claim payment to the employer in respect of employee is permissible.
(e) Weekly compensation should not be paid unless the total claim amount is
ascertained and agreed.

4. 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.

5. 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 fully settled on the basis of First Information Report
lodged provided other documents are in order. Indemnity bond is to be obtained before settlement.

6. BAGGAGE INSURANCE

6.1 The provisions pertaining to All Risk Insurance / Theft Claims are applicable to claims under this
class of insurance also.
6.2 Baggage claims occurring outside India may be settled on the basis of the completed claim form and
the statements, affidavits, information or other independent documentation as may be possible or
available and customary in the country where the loss took place, and the dealing office being
satisfied about the genuineness of the claim.

7. BURGLARY INSURANCE

7.1 The following documents are to be obtained for processing of Burglary Insurance claims:
a) Duly completed claim form
41
 b) First Information Report from the police
c) Survey report
d) Photographs
7.2 In case of small losses up to Rs. 10,000/- 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 otherwise satisfied about the genuineness of the claim.
7.3 In cases of burglary/theft which involves assessment of losses involving checking books of accounts,
a surveyor should be appointed.
7.4 Waiver of Final Investigation Report of the police can be considered by the Competent Authority if the
surveyors’ report does not raise any doubt in regard to the cause and quantum of loss.
7.5 However if any amounts / property is recovered and is in custody of the police, the same needs to be
considered before arriving at final payable amount.
7.6 Subrogation/ indemnity letter to be obtained from the Insured.

8. MONEY POLICY

8.1 The following documents are considered important while processing claims:
a) Duly completed claim form
b) First Information Report from the police
c) Survey report
8.2 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.
8.3 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.
8.4 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.
8.5 If the policy is on annual turnover basis, the annual estimate of carrying does not have any bearing
on the claim. Premium adjustment on actual turnover must be made at the end of the policy period.

9. BANKER’S INDEMNITY INSURANCE

9.1 The Banker's Indemnity insurance comprises of various covers like Fire and allied perils, Fidelity
Guarantee, Burglary, Money in transit, etc. The documents and procedures to be followed of the
respective section.
9.2 The following documents are considered important while processing claims:
a) Duly completed claim form
b) First Information Report to the police
c) Survey report

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10. JEWELLERS’ BLOCK INSURANCE

10.1 The Jewelers’ Block insurance comprises of various covers like Fire and allied perils, Fidelity
Guarantee, Burglary, Money in transit, etc. The documents and procedures to be followed of the
respective section
10.2 The following documents are considered important for processing claims:
a) Duly completed claim form
b) First Information Report from police
c) Survey report
10.3 If any jewellery / bullion / precious stones, etc. is recovered and is in custody of the police, the
same needs to be considered before arriving at final payable amount.
10.4 Subrogation/ indemnity letter to be obtained from the Insured.

11. FIDELITY GUARANTEE INSURANCE

Processing of claim shall be based on the completed claim form, survey report and/or investigator’s report
and Final Police 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 police investigation report may be waived where the surveyor has not raised any doubt as
to the cause and quantum of loss. Settlement of claim is 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 survey report is clean, settlement may be effected 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. If the employee involved was at any time removed from service and taken back, such cases
need special scrutiny.

12. 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.

13. HOUSEHOLDER’S INSURANCE (HHI) POLICY

13.1 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 as for that specified class of risk given in the
guidelines.
13.2 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. HHI policy is not a commercial policy and
this fact must be borne in mind while settling HHI claims.
13.3 All claims under Householders Insurance should be settled within 30 days.

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14. ANIMAL (ELEPHANT, HORSE ETC.) INSURANCE
14.1 The following supporting documents are required for processing of claims
a) Duly completed claim form
b) Veterinary certificate
c) Valuation of the animal
d) Post mortem report
e) Pathological tests involving tissue sample
f) Treatment chart
14.2 On intimation of any accident or illness which is likely to result in a claim, deployment of
veterinary doctor should be considered.
14.3 If animal is killed, whether circumstances necessitated such killing is to be verified.
14.4 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.

15. DISCRETIONARY SETTLEMENT

For claims under personal insurances endeavor should be made to ensure that an innocent, misinformed
or ignorant insured is not unduly penalized because of technicalities.

44
 LIABILITY INSURANCE CLAIMS
1. INTIMATION OF CLAIM:

1.1 As soon as the Insured becomes aware of any claim or a potential circumstance which may lead to a
claim, there should be immediate notification to the Insurers.
1.2 The liability claims can arise as follows
a) The claimant can file a case on the insured in any legal forum like Consumer Court, Civil Court,
etc.
b) The claimant can file a claim on the insured enumerating circumstances leading to
establishment of legal liability and claim damages.
1.3 It is to be noted that in legal liability claims there is no prerequisite on the claimant to file a case in
any legal forum to claim damages.
1.4 The insurers will have to process the claims under liability policies in both case a) and b).

2. APPOINTMENT OF SURVEYOR/ LOSS ADJUSTOR / INVESTIGATOR

2.1 The Insurers to appoint a Surveyor/Loss adjuster to assess the loss.

2.2 If necessary, technical expert/investigator to be appointed for ascertaining the cause of loss.

3. PROCEDURE

3.1 On receiving the intimation, Claim Handling office has to check the following:
a) Whether incident falls after the retroactive date stated in the policy.
b) Whether the incident has occurred during the period of insurance and the claim is made during
the policy period or within the extended reporting period stated in the policy from the date of
expiry in the event of non-renewal or cancellation of the policy.
c) Limit of Indemnity applicable under the policy.
3.2 The insured is to be advised to pass on to the insurer any notice of claim that may be received
without admitting liability.
3.3 It is also to be verified whether the claim is barred by limitation, placed by statute or by policy
conditions.

4. DOCUMENTS

Depending on individual circumstance, reliance may be placed on the following documents:

a) Details of the incident / alleged misfeasance.
b) Copy of claim letter filed by the claimant on the insured.
c) FIR, Press reports, Consumer Action Group/Society/Group representation/Report, if any, to support
the incident.
d) Details of loss caused/injury/death/property damage including all available information on victims as
well as estimated quantum of liability
e) Steps taken by the insured to mitigate the loss.
f) Statements from witnesses, sketch plans, photographs, visual records of evidence/circumstance,
video, etc.
g) Survey/Investigation Report
h) All notices/summons of the court, if any. This is required only in case the claimant is planning to file
suit on the insured.
i) Weather (Meteorological) report

45
 j) Pollution Control Board Report / Reports from any other regulatory body.
k) Post Mortem Report/Medical Certificate
l) Details of claims, if any, preferred by the affected party / claimant for the same loss from any other
source.
Note: Documents i), j) and k) to be called for only if applicable.

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

6. SETTLEMENT OF CLAIM

6.1 A legal opinion may be sought to examine whether

a) legal liability exists
b) the Claim falls under the terms and conditions of the policy.
6.2 Once it is established that legal liability exists, an out of court settlement would be the best option
available as otherwise a court case would be expensive, time consuming.
6.3 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.
6.4 Once the Liability is established under the policy- as per 6.2 or 6.3 above, the claim may be processed
and settled.

7. SPECIAL FEATURES TO BE CONSIDERED FOR CERTAIN LIABILITY CLAIMS

7.1 Product Liability:
a) Whether the product 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 there under.
g) Specialists/Experts to be engaged to determine whether product is defective
h) Collaborators’ Liability
i) Whether compromised settlement is worthwhile.
46
 j) Recovery Rights, if any.
k) Loss Minimization Measures - recall; stoppage of sale/destruction of the concerned product.
Where claims arise in a foreign country, 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. This must be done the soonest possible, since regulatory framework and
laws in foreign countries are far more stringent.
7.2 Public Liability Act Policy :
a) ‘No fault’ Liability provisions as incorporated in the Public Liability Insurance Act, 1991 are in the
nature of social welfare measure
b) On receipt of notice from the Collector, representation should be made on behalf of the insured
as well as the insurer before the Collector.
c) On receipt of the copy of the Award from the Collector, the same should be satisfied within the
time stipulated by the Act.
d) 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.
7.3 Carriers’ Legal Liability
a) Scope of cover should be looked into i.e. whether wider or basic - verify whether the claim falls
within the purview of the policy.
b) To verify the lorry receipt, Invoice and ascertain whether the consignment is the subject matter
of the transit.
c) To appoint surveyor to assess the loss
d) To obtain F.I.R. copy if necessary.
8. 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.
8.1 Claims on Food & Beverage, Drugs and Medicines
a) Whether the sample of suspected product is given for analysis
b) Whether complaint reported to Public Authority
c) Date of manufacture/Sale of product/Date of expiry/Details of product life.
d) Special instructions, if any, notified for consumption of the product - whether complied with or
not.
e) Details of preparation of product, by whom, how packed, transported and sold.
f) Whether foreigners involved, if so, details.

9. GENERAL

In cases wherein notices or summons are received directly from the court whether or not any intimation
has been made by the insured, an advocate should be engaged to defend the case effectively. 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.

47
 GUIDELINES FOR DISPOSAL OF SALVAGE
1. GENERAL
1.1 An insurer is involved in disposal of salvage when the insurer takes over whatever remains of the subject
matter insured. The other circumstances where insurers are directly or indirectly involved in the disposal
of salvage may be:
a) When a loss is assessed on a 'Net' basis after deducting the value of salvage, which is retained by
the Insured himself. In such cases, the surveyor should ensure that the valuation of the salvage is
done properly and on that basis the claim will be settled. In case where the value of salvage is more
than Rs. 25 lakhs, the surveyor should follow the procedure as laid down in Section 2 for ascertaining
the value.
b) The insured matter suffers irreparable damage, and though not a total loss it becomes necessary to
dispose it off for the benefit of all concerned.
c) The damaged parts of the insured matter become the property of the insurer when replaced by new
parts.
1.2 All surveyors should be advised that in cases where an Insured is not willing to retain the salvage, and
the Salvage has to be sold to an outside party, they must promptly inform the Divisional/ Regional
Office/Claims service hubs concerned by issuing a preliminary report furnishing therein;
a) The measures taken by the Insured/Surveyors for safe custody of the salvage.
b) Whether there are any impediments in the disposal of the salvage, such as its location, obsolete
design etc. and the measures that could be taken to overcome such impediments.
c) What kind of a market the salvage has and the price it could be expected to fetch.
1.3 If it is observed that the indications given by any surveyor as to the expected values of salvage over a
period are at wide variance with the offers actually received, the surveyor should record the reason for the
variance. The authority competent to settle the claim should take appropriate decision based on the
surveyor’s observation.

2. PROCEDURE FOR DISPOSAL

2.1 Arrangements should be made to dispose off all salvage as expeditiously as possible (especially
perishable goods and goods which are subject to rapid deterioration in value) so as to ensure maximum
realization and cut down the costs of storage etc. to the maximum. Economy should be observed in
incurring the incidental costs of disposal.
2.2 In case of fire loss being settled on a total loss basis, it must be stipulated that the Insured should be held
responsible for storage of the salvage and therefore liable to bear the godown rent.
2.3 In respect of commodities, disposal of which involves seeking permission of Government authorities, the
Insured should be responsible till the necessary permission for sales obtained and conveyed to the
insurer.
2.4 The office may use the services of salvage settlers/e-salvage settlers/ MSTC/Company’s website/List of
Salvage buyers maintained by the Claim Settling office for e-tender to dispose off the salvage.
2.5 Divisional Offices shall maintain a list of salvage buyers indicating therein the commodities in which each
buyer is normally interested.
2.6 Salvage of estimated value of Rs.5,000 /- or less may be disposed off by negotiations with local salvage
buyers. However, in respect of motor vehicles, the limits for disposal by negotiation with local salvage
buyers will be as under:
a) Scooters/Motor Cycles/3 wheelers Rs.1,000 /-
b) Medium sized vehicles (Cars/Jeeps) Rs.2,500 /-
c) Heavy Vehicles Rs.5,000 /-
The offers shall be obtained in writing before a date to be specified in advance. For salvage of value
exceeding Rs.5,000 /- such offers shall be received from at-least three buyers.
2.7 Salvage exceeding the limit as stated in 2.6 above but upto an amount of Rs.100,000 /- shall be disposed
off by inviting tenders from prospective buyers by issuing sale notices to all the listed salvage buyers.
Where the estimated salvage value exceeds Rs. 100,000 /- the Divisional Office concerned can dispose
48
 the salvage by using the service of salvage settlers/e-salvage settlers/MSTC/Company’s website for e-
tender.
2.8 For salvages of expected value exceeding Rs. 25 lakhs the same procedure as above should be followed
except that advertisements should be inserted in one English Daily and one local vernacular daily where
salvage is available.

3. The sale notices or tender advertisements inserted in the press should, inter alia, contain the following
particulars:
3.1 A brief description of the item(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………..
3.2 The item(s) offered for sale must be strictly on ‘as is where is basis’ with all faults.
3.3 All tenders must be submitted by 'Registered Post A/D' to the concerned in-charge of Divisional
Office/Claims service hubs 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 tender value
so as to reach not later than ... (date to be specified).
3.4 All tenders, along with Bank Drafts/Pay Orders for the requisite Earnest Money must be submitted in
properly sealed envelope indicating brief particulars of the Tender (for identification of the envelopes) so
that the said envelopes may not be opened by the incoming Mail Section of the Dispatch Department but
should be put in the tender box kept in D.O./Claims service hubs. The tenders should indicate the full
address of the tenderers concerned.
3.5 Tenders received without the requisite Earnest Money Deposit will not be considered and will stand
automatically rejected.
3.6 The Earnest Money Deposit will not attract any interest.
3.7 The right to reject any or all of the tenders received, without assigning any reason whatsoever, is to be
reserved by the Company.
3.8 Acceptance of a tender and the terms of payment (balance 90%) and terms of removal of the salvage
must be communicated to the successful tenderer by 'Registered Post A/D' within four weeks from the
last date specified for the submission of tenders.
3.9 From the date of receipt of acceptance of the tender, the successful tenderer must deposit within fifteen
days, the balance of the amount tendered (90%) and arrange immediate removal of the goods (the whole
or part lots as agreed upon) at this own expense, failing which revocation of the acceptance of his tender
and forfeiture of the Earnest Money Deposit should be communicated in writing by ‘Registered Post A/D’
to the tenderer concerned.
3.10 In the case of Motor Insurance claims, if the vehicles involved are under 'Superdari’ the fact should be
mentioned.
3.11 In case of vehicles where salvage value of parts is small and the parts are collected by the Office, such
parts may be sold by the Office in lots to the listed salvage buyers. A proper Salvage Register must be
maintained and all items of salvage must be entered therein. Where the expected salvage value per lot
exceeds Rs.10000 /- the procedure laid down in the guidelines must be followed.

4. OFFICE PROCEDURE
The following procedure is to be strictly observed by the Divisional/Regional Offices/Claims service hubs
concerned in dealing with salvage disposal where salvage is taken over by company.
a) DCC/RCC/HCC will act as salvage committee also. The functions of the Salvage Committee are
administrative in nature, for processing the salvage disposals, according to the rules and regulations and
decision of the Salvage Committee should be considered as final subject to the limits of Financial
Authority.
b) Tenders must be opened by DCC/RCC/HCC on the specified date and at the time and place specified for
the opening of the tenders as indicated in the Press Advertisements inviting tenders.
c) A Tender Register must be maintained, in which particulars; of all tenders for salvage must be
chronologically and serially recorded as indicated on the envelopes. The envelopes containing the tenders
must be put only in the tender box.
49
 d) After recording particulars thereof in the Tender Register each sealed tender should be kept in a locked
Tender Box until the last date for submission of tenders as specified in the tender notice.
e) No fresh tender is to be accepted in respect of any particular salvage after the last date for submission
oftenders as advertised.
f) All tenders 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 tenders as advertised in the Press. All tenders received
should be opened by the appropriate number of members as indicated in para 4 b), of the 'Salvage
Committee' of the concerned Divisional/Regional Office. The tenders, when opened, should be serially
numbered as recorded in the Tender Register and stamped with the Company's official date stamp in the
presence of the attending 'Salvage Committee' members who should also affix their signatures and the
date thereto.
g) After opening the tenders, 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. In
deciding whether to accept or reject any offer, the expected salvage value as indicated by .he surveyors
should be borne in mind.
h) If the highest offer received through advertisements in the Press should fall far below the expected value
of the salvage, as indicated by the surveyors, then the concerned Surveyor's assistance should be sought
to procure offers to realize the expected salvage value or any amount near thereto. The DCC/RCC/ HCC
may also initiate negotiations in order to obtain fresh tenders. Should the fresh tenders received through
such negotiations quote an amount higher than the highest tender received in response to the original
advertisements in the Press and should such higher tender be found acceptable, a proper explanatory
note must be prepared for record purpose and approved by DCC/RCC/ HCC
i) Under no circumstances should the names of any of the tenderers and/or the offers made by them be
disclosed to anyone unconnected with the processing of the tenders. Utmost care should be taken to
prevent disclosure of the details of any of the tenders or developments relating to the processing of the
tenders to any of the tenderers concerned or to any person unconnected with the processing of the
tenders. Experience indicates that particularly in the metropolitan cities salvage buyers form syndicates of
all prospective tenderers. Where the Committee or the Surveyor suspects such a move on the part of the
prospective salvage buyers to depress the offer or make a wide difference between the highest bidder and
the second one with a view to getting the earnest money deposited by the highest bidder forfeited and
automatically the second bidder getting the salvage at a much cheaper price, the Committee without
assigning any reason to the tenderers may reject all offers and take such actions like inviting fresh lenders
or conducting further negotiation in the best interest of the Insurer as they would warrant under the
circumstances. Such decision of the Committee should be unanimous and should be recorded properly.
j) Pending final disposal of the salvage. i.e. until receipt of the full tender amount from the successful
tenderer and removal of the entire salvage by him, all papers relating to the disposal of the salvage should
be kept in the safe custody of Divisional in-charge/ Claims Service Hub In-charge/Regional in-charge
k) The Bank Drafts/Pay Orders of all tenderers shall be deposited into the Company's Bank A/c. The Earnest
Money deposited by the unsuccessful tenderers should be returned to them as soon as possible, but not
later than four weeks from the last date for the submission of tenders.

5. APPROVAL OF COMPETENT AUTHORITY

A Note prepared by the team of officials at the time of opening the tenders should be placed before the
competent authority for his approval. Where the expected salvage value exceeds the financial authority of the
officer concerned the case should be referred to the appropriate authority with a proper Note giving therein the
recommendation agreed upon. Without receiving the approval of the Competent Authority, nothing whatsoever
should be communicated to the tenderers. Wherever possible, approval for disposal of the salvage should be
obtained from the Competent Authority at the time of seeking approval for the settlement of the claim itself.

50
6. MODALITIES FOR DISPOSAL OF SALVAGE
6.1 As soon as a proposal by insurer is accepted and approved by the Competent Authority the Regional
Office/Divisional Office/Claim service hub (whose authority it is to dispose off the salvage) should write to
tenderer immediately advising them of the acceptance of the tender, and showing therein the name of the
successful tenderer, the amount offered, the terms of payment and lifting of the salvage etc. Where the
salvage is being disposed off by the insured, the surveyor should keep the insurer informed of the details
of disposal and completion of transaction.
6.2 The balance of 90% or installments as agreed upon, of the accepted tender must be deposited by the
successful tenderer by a Bank Draft or Pay Order in favour of the Company within fifteen days from the
date of receipt of acceptance of the tender and the successful tenderer 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 tenderer.
6.3 It should, however, be borne in mind that. in case the successful tenderer fails/refuses to deposit the full
amount as tendered by him within the stipulated period or no response whatsoever is received from him
within fifteen days from the date of communication of the acceptance of his tender, the Earnest Money
deposited by him will stand forfeited and the tenderer submitting the second highest offer will be permitted
to lift the salvage after depositing the full amount offered by him or installments as may be agreed upon,
within fifteen days from the date of communication of the acceptance of his tender, provided the
difference between the highest tender and the second highest tender is not more than 15%of the highest
tender. Utmost care should be taken to ensure that the second highest offer does not fall below the floor
price except where it is apprehended that resorting to a second advertisement/e-tender would be
uneconomical from our point of view and also where the salvage would deteriorate with the lapse of time,
the reasons being agreed upon by the 'Salvage Committee' and noted down. A similar procedure should
be followed where two tenderers have backed out. However if all the first three highest tenderers should
back out, the Earnest Money deposited by each of them shall stand forfeited and fresh tenderers will be
invited through a second series of advertisement in the press/e-tender. Similar fresh tenders will also be
invited in those cases where the 'Salvage Committee' decides not to accept any of the previous tenders.
6.4 All receipts for salvage must be issued in the name of the tenderer.
6.5 The disposal of salvage, when completed should be properly entered in the Salvage Register.
6.6 These guidelines will not apply for disposal of salvage of perishable commodities viz. potatoes, fish, fruits
or similar stuff or other items for which immediate disposal should be arranged since the realizable value
deteriorates very fast.

7. DISCRETIONARY POWER
The HO Claims Committee shall be empowered to exercise discretionary power to vary the procedure outlined
herein under exceptional circumstances.

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CONCLUSION
The Manual needs to be implemented by the Company in conjunction with related IRDAI Regulations as amended
from time to time. In case any aspect of this Manual is at divergence with such Regulations as amended from time
to time, the IRDAI Regulation shall prevail over the same. The Chairman cum Managing Director (CMD) of the
Company shall have the authority to provide ruling on interpretation issues in implementation of this Manual and
review the same and necessary amendments shall be made thereto with the approval of the Board of the
Company.

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