Page 281 - DMGT303_BANKING_AND_INSURANCE

Banking and Insurance

Notes Riot, Strike, Malicious and Terrorism Damage

1. The act of any person taking part along with others in any disturbance of public peace
(other than war, invasion, mutiny, civil commotion etc.) is construed to be a riot, strike or
a terrorist activity. Any loss or physical damage to the property insured directly caused by
such activity. The action of any lawful authorities in suppressing such disturbance or
minimizing its consequences is covered.
2. Further the wilful act of any striker or a lockout, or the action of any lawful authority in
suppressing such act, resulting in visible physical damage by external means, is also
covered.
3. Malicious act would mean an act with malicious intent but excluding omission of any kind
by any person, resulting in visible physical damage to the insured property, whether or
not the act is committed in the course of disturbance of public peace or not. Burglary,
housebreaking, theft/larceny does not constitute a malicious act for the purpose of this
cover.
4. Total or partial cessation of work or the retarding or interruption or cessation of any
process or operations;
5. Permanent dispossession resulting from confiscation, commandeering, requisition or
destruction by order of the government or any lawfully constituted authority; or permanent
or temporary dispossession of any building or plant or unit or machinery resulting from
the unlawful occupation by any person of the same or prevention of access to the same, are
not covered.

Self Assessment

State whether the following statements are true or false:
6. The wilful act of any striker or a lockout, or the action of any lawful authority in suppressing
such act, resulting in visible physical damage by external means, is not covered in terrorism
damage policy.
7. Destruction or damage to the property insured by its own fermentation, natural heating
or spontaneous combustion or its undergoing any heating or drying process can be treated
as damage due to fire.
8. Fire insurance business in India is governed by the All India Fire Tariff.
9. Reinsurance is a form of an insurance cover for the insurance where several Insurance
companies come together to issue one single risk.
10. If the insurance company finds the malafide intentions of the assured, it can take it as a
defense to avoid the fire insurance claim settlements.

13.7 Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood
and Inundation

These are all various types of violent natural disturbances that are accompanied by thunder or
strong winds or heavy rainfall. Flood or inundation should not only be understood in the
common sense of the terms, i.e., flood in the river or lakes, but also accumulation of water due
to choked drains would be deemed to be flood.

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