A guide how handle project insurance claims SCE/MCE/EAR/CAR

1. SCE/CAR/MCE CLAIMS :
PROFESSIONAL APPROACH
Vimal Goyal
FIII, ACII (London),
Chartered Insurance Broker,
Director
SMC Insurance Brokers P. Ltd.
vg@smcindiaonline.com
vkgnia@hotmail.com
Cell +919899699304

2. Tips
To avoid
Disputes
Claim
Process :
Major stages
Claim
Process :
Documentation
How to
Speed up
Process
Introduction
Case
Studies
Areas of
Dispute

3. INTRODUCTION :
Significance of claims
 Delivery of promise
 Displays attitude :
 You are with insured or take it as a burden
 You help at each step or do just postman’s job & leave to
mercy of surveyor and insurance co.
 Test of underwriting precautions, add-on covers
 Shows competence to service the insurance portfolio
 Trust of client in insurer
 Faith in the intermediary
 Can strengthen or demolish long term relationship
with the insurer and intermediary
 Publicity through word of mouth

4. CLAIM PROCESS :
Major stages in life cycle of a claim
 Intimation of claim: Policy no., Address, contact, Loss Estimate
 Deputation of surveyor by insurance co.
 Action for recovery from Carrier / shipping co. for marine part
 First visit of surveyor and on-site verifications
 Go ahead for further action : dismantle/repair/replacement
 Letter of requirements from surveyor (LOR)
 Submission of documents, discussions, response to queries of
surveyor, Request for on account payment
 Replacement / repair/strengthen, its verification by surveyor
 Salvage disposal process : Tender / auction
 Assessment, Consent and submission of survey report
 Processing by insurance co., addressing their queries
 Approval, discharge, NOC, Subrogation (marine), Payment

5. CLAIM PROCESS :
Documentation for SCE/CAR claims
General (List is not exhaustive)
 Copy of the written intimation to insurer
 Copy of the insurance policy
 Occurrence report & Statement of eye witnesses
 Segregation Report : damaged and undamaged
items, Extent of damage
 Proposal for loss minimization efforts and docs
 Profile of the Company
 A brief write up about the affected project: date of
start, specifications, bar chart, work completed
before DOL, bills raised to principal, past claims.
 Tender document and Bill of quantities (BOQ)

6. CLAIM PROCESS :
Documentation for SCE/CAR claims
General (contd…)
 Bills for repairs/ invoice for replacements, wherever
applicable with payment proof
 Photographs / Video at different stages
 Documentary evidence in support of the amounts
claimed
 Copy of the intimation of the loss to Police, Fire
Brigade and any other authority
 Fire Brigade report / Meteorological deptt. report (in
case of flood, cyclone etc.)
 Daily Diary report / FIR issued by the Police
 Photographs, Video, CCTV footage, News paper clips
 Duly completed claim form and Claim bill

7. CLAIM PROCESS :
Documentation for SCE/CAR claims
General (contd…)
 Test report by the Quality Control personnel
 Drawing layout of the Fire hydrant points and fire
fighting equipment
 Documents to establish adequacy of insurance : how
sum insured arrived at, total project cost
 Purchase invoices of all items above certain amt.
 GST, Import duty : Reversal / input credit, exemption
 Estimated quantities for salvage items
 Offer for salvage value / Docs as per Salvage process
 Final Survey report

8. CLAIM PROCESS :
Documentation for SCE/CAR claims
Building
 Complete dimensioned layout of the premises
marking the area affected by fire
 Structural engineers inspection report along with
results of the tests conducted giving the condition of
affected building and repair methodology
 Item wise estimate of the repairs of the damaged
portion of the affected building giving the item name,
qty, rate & amount for the material and labour
 BOQ separately for existing (damaged +
Undamaged) and new design, if there is any change
in the design / specifications.

9. CLAIM PROCESS :
Documentation for SCE/CAR claims
P&M and other assets
 Layout of the premises marking the installation of
the various machinery
 'Single Line Diagram (SLD)' showing the electrical
connections from the main to the end consumer P&M
 Service Engineer/OEM's Report with nature of
damage, cause of damage, method of restoration,
estimate of repairs
 Estimates/quotations of repairs and replacement
machine-wise with specifications duly supported with
copy of the original procurement invoice
 Technical data, specifications, operating parameters
before and after reported failure / damage.
 Original purchase invoice, Quote for replacement (if
second hand)

10. CLAIM PROCESS :
Documentation for SCE/CAR claims
Stocks (at site or off-site storage location)
 Stock ledger : Received and issued with supporting documents
 Itemized purchase ledger for specified period
 Purchase invoices, import documents, transportation documents
etc. to substantiate the claimed quantities and value.
 Estimate of loss in respect of the damaged stock, along with
cost supporting documents giving costing of each article
(Excluding profit element)
 Volumetric analysis of stocks for each type of material : Floor
plan, item name and quantity stored in each area
 Details of damaged and undamaged items (Quantities and
value) : items identified as affected / damaged from remains,
items saved
 Testing report after the loss with explanation on standard
parameters and deviations in test result

11. CLAIM PROCESS :
Documentation for Marine claim
Recovery Rights
 Intimation to carrier / shipping co. and invitation for joint
inspection (within 72 hours) : If loss observed after delivery
 Copy of monetary claim lodged on railways/road carriers/postal
authorities/shipping co. within time limit
 Postal Acknowledgement for monetary claim lodged (if received
back), otherwise proof of sending the letter by Regd. AD post.
 Reply to the monetary claim lodged, if any
 Original open delivery / short delivery / Non-delivery Certificate
/ Damage Certificate issued by Carrier (Insured obliged to make
best of efforts to obtain this)
 Letter of Subrogation & Special Power of Attorney

12. CLAIM PROCESS :
How to speed up the process
 Maintain and provide standard formats to the insured
 Take the claim as a project and make someone from client side
as Project in-charge
 Joint meeting of all concerned on insured side, earmark and
assign documentations in three categories:
 Readily available internally
 Can be prepared internally
 To be sourced from outside agencies
 Assigning of duties to concerned persons : Name, time-line
 Mark and Prioritize documents to get “Go ahead” for next
course of action
 Review to take updates every week : speak to concerned
persons / assignee directly to clarify his concerns / issues
 Discuss and brain-storm difficult areas and decide / ask client to
decide to make the choice out of different options
 Scrutinize documents from surveyors and insurer’s perspective

13. CLAIM PROCESS :
How to speed up the process
 Don’t hesitate to provide documents to surveyor in piecemeal :
give surveyor opportunity to review documents received
 Persistent follow-up with client, surveyor, insurer at least on
weekly basis : Follow-up telephonic discussions by email
 Regularly discuss and maintain cordial relations with surveyor
and insurers : Do not create any ego issues on either side.
 Correspondence and discussions : polite, does not help to be
offensive. Present differing point of view as academic discussion
 Keep legal aspects in mind but never use legal words
 Don’t manipulate documents : Surveyors have means to know
through scrutiny.
 Presentation : easy to co-relate, qualitative, makes a lot of
difference.
 Grey Areas : After informal discussions, present the view point
in a logical and forceful manner.

14. CLAIM PROCESS :
Areas of dispute
 Claim not payable / liability is denied
 Exclusions : Loss discovered at time of taking inventory, Faulty design
(CAR), Breakage of Glass, Testing done but principle not taken over
 Policy coverage : Duration - Loss after testing / 4 weeks of readiness,
Defect liability / extended maintenance cover : link to occurrence before
commissioning
 Breach of condition : Delay in intimation, fraudulent means
 Fear of damage, fear of liability, breach of regulation, Govt authority action
 Claim file closed as NO CLAIM: Non-compliance of requirements
 Deduction from claim amount :
 To the extent included in S.I. : BOQ, Excise, Freight (expediting cost)
 Loss during transit OR during storage / handling / erection
 Loss minimization expenses
 Burglary/theft in multiple events,
 Debris removal : Dismantling expenses, Foreign Debris
 Non-standard settlement of claim
 Breach of express warranty, Loss of recovery rights in marine
 Inordinate Delay in settlement of claim
 By surveyor : Busy in other assignments, piecemeal, response time
 By insurance co. : Queries in piecemeal, officials on leave/tour/busy

15. Examples of disputes and :
Tips to avoid disputes
 Photo / video at different stages (particularly wet risks)
 Maintenance Cost sheet, SI working and BOQ of each project
incl material supplied by principals
 Second hand machinery : declaration
 Cover for site office and its contents
 S.I. for Debris removal to cover dismantling expenses, external
/ foreign debris (To check link to percentage of claim amt.)
 Reusable scaffolding / shuttering material : CPM
 Additional or increased expenses cover as a result of insured
peril (Boulders to be removed to access project site)
 Put to use endorsement
 Amendment to fire fighting endorsement
 Additional duty cover
 Stretch warranty for road
 Transmission line exclusion by PSU insurers duty to treaty limits
 Building in course of construction, items lying in store
 Go through and understand tariff endorsements and warranties

16. CLAIM PROCESS :
Case studies
 Road and Bridge : Put to use / operation
 Flood linked to rainfall data on different dates : multiple excess
 Water leakage from overhead tank
 Theft by other contractors or their staff working at site
 Escalators : Truss, Chinese Engineers
 Transformer, Panel, Gilks for Sikkim Govt.
 Fire in temporary office
 Excise : Centvat credit Original purchase, Repl. purchase
 Theft of parts of transmission lines
 Storage in open along the long area of project
 Electrical cable damaged gradually : Extended maintenance
 Fire : absence of fire fighting equipment
 Bridge on River : to the extent included in original scope
 Natural topography damaged : artificial to be created after loss
 Temporary road for diversion after damage, signs / watchman
 Cause of damage in Road Bridge slip case

17. Any questions?

18. THANK YOU
Vimal Goyal
FIII, ACII (London),
Chartered Insurance Broker
vg@smcindiaonline.com
vkgnia@hotmail.com
Cell +919899699304