We at VANTEVO routinely have meetings with leading Brokers, during which some of them tell us – half joking, half serious – that the Material Damage All Risks Policy, in their opinion, “covers what does not happen and does not cover what does happen in companies”.
For VANTEVO, the MD All Risks Policy has represented a major advance in the cover for industrial assets, since it is the Insurer who must prove the absence of any cover for the loss on the basis of the Policy exclusions.
Under the old-style Policies, which were for named perils, it was the Insured who had to demonstrate that their loss was indeed insured under one of its covers.
Where VANTEVO does agree with these Brokers, is that the General Conditions of the MD All Risks Policies have many exclusions and even some that are indefinite and not very clear, which generates confusion and conflicts at the time of a loss. It is as wrong to say that this Policy covers nearly nothing as it is to state that it covers almost everything.
What this Policy needs, whose greatest advantage for the Insured is that it is the Insurer who must demonstrate that the damage is not recoverable thereunder, is to be adapted to the risk that you wish to insure and in order for this, there are the Special Conditions and Optional Covers.
Amongst other things that can be agreed and reflected in the Special Conditions of the Policy are the form of the insurance for the stocks, the waiver of the Average Clause, the insuring of the assets at their New Replacement Value, the Deductibles, the Automatic Increase Clauses, etc..
It is evident that by contracting Optional Covers such as that for Machinery Breakdown, Consequential Losses, Burglary and Theft, Molten Material Spillage, etc., some of the Exclusions contained in the General Conditions of the Policy can be revoked by means of the express agreement between the Insured and the Insurer, which must be recorded in the Policy Schedule.
In the opinion of VANTEVO CLAIMS ADVISORS, it is essential that the Broker and the Insured, based on the characteristics of the Risk, adapt the Policy in such a way that it is “made to measure” and efficiently protects the risk that is to be covered.
This work of adapting the clauses of the Policy to the needs of the risks is commonly done for Large Risks, but is less frequent in covers for SMEs where there is still a lot of work to be done.
Between us we must ensure that the Policies are drafted better and more clearly so that should a loss occur, they function properly without any conflicts or surprises later.