Commercial vehicle insurance policy

The insurer shall provide compensation to the insured for loss/damage to the commercial vehicle specified in the schedule of this insurance policy (hereinafter referred to as the “vehicle”), or to the parts attached to it or to both, caused by any of the following:

(a)Fire, lightning, explosion or spontaneous combustion of the vehicle or parts attached to it;

(b)Earthquake;

(c)Flood/submersion;

(d)Landslide/landslide-related subsidence;

(e)Storm, hail, snow or frost;

(f)Accidental/fortuitous causes;

(g)Loss/damage to the vehicle arising as a result of wear and tear caused by use of the vehicle, or due to mechanical or electrical breakdown/failure/breakage;

(h)Theft, housebreaking or forcible entry;

(i)While loading/unloading the vehicle on or off a road, railway, inland waterway, lift or elevator.

Where, due to any cause mentioned in Clause 1, parts of the vehicle made of the following materials have to be replaced, depreciation shall be deducted as follows:

(a)All types of rubber, bumpers, batteries, tires and tubes — 50%

50%

(b)Parts made of fiberglass — 30%

30%

(c)Materials made of glass and air bags, including sensors — 0%

0%

Where, due to any cause mentioned in Clause 1, parts other than those mentioned in Clause 2 have to be replaced, depreciation shall be deducted at the following rates:

When compensation is paid for partial loss/damage to a vehicle caused by any cause mentioned in Clause 1, the depreciation specified in Clause 2 or Clause 3 shall be deducted, together with the applicable compulsory excess and voluntary excess specified in the schedule of this insurance policy, and the remaining amount shall be paid by the insurer.

Notwithstanding anything stated in Clauses 1, 2 and 3, the insurer shall not make payment in any of the following circumstances:

(a)Depreciation resulting from the use of the vehicle, mechanical or electrical breakdown/failure/breakage;

(b)Damage to tires/tubes occurring where no vehicle accident has occurred;

(c)Theft, housebreaking or forcible entry of parts only where the vehicle itself has not been stolen;

(d)Loss/damage relating to denting and painting, except in the event of Total Loss or Constructive Total Loss of the vehicle;

(e)Loss/damage caused because the driver consumed alcohol or narcotic substances;

(f)Loss/damage occurring after 35 days from the date on which the insured's interest in the vehicle has changed or ended.

35 days

If the vehicle becomes immobile due to any cause mentioned in Clause 1, the insurer shall bear the necessary or actual expenses required to take the vehicle to a safe place or to the nearest repair location. The insurer's maximum liability under this clause shall be as follows:

Up to 100 km

Rs. 10,000

More than 100 km

Rs. 15,000

In respect of loss for which the insurer may be liable under this insurance policy, the insured may have the vehicle repaired after fulfilling the following conditions:

(a)The estimated cost of such repair shall not exceed Rs. 5,000;

Rs. 5,000

(b)Detailed particulars of the repair expenses shall be immediately made available to the insurer;

(c)The insured shall provide the insurer with the necessary evidence and assistance to establish that such repair was necessary and that the expenses incurred were reasonable.

The sum insured of the vehicle shall be determined as follows:

(a)At the beginning of each insurance period, the value declared by the insured shall be considered the sum insured of the vehicle for that insurance period.

(b)Where the vehicle distributor or manufacturer provides a price list, the declared value shall be determined by deducting depreciation from the price list provided by the distributor or manufacturer of the vehicle and its attached parts, according to the following rates:

(c)If the distributor or manufacturer of the vehicle has stopped providing a price list, the declared value mentioned in Clause (a) shall be determined by mutual agreement between the insured and the insurer at the beginning of each insurance period.

(d)For one insurance period, the declared value determined under Clause (b) or (c) at the beginning of that period shall be considered the market value of the vehicle, and no additional depreciation shall be deducted from it in a claim for Total Loss or Constructive Total Loss during that period.

(e)If the cost required to repair a vehicle damaged due to any cause mentioned in Clause 1 exceeds 75% of the declared value, the vehicle shall be considered to have suffered Constructive Total Loss.

The insurer shall pay compensation for a vehicle that has suffered Total Loss or Constructive Total Loss due to any cause mentioned in Clause 1.

No compulsory excess or voluntary excess shall be deducted when making such payment.

The value of the salvage shall be determined on the basis of the surveyor's recommendation and with the written consent of the insurer and insured.

Subject to the maximum liability limit mentioned in the insurance policy, the insurer shall pay expenses arising from liability that may be incurred by the insured as a result of an accident caused by the vehicle or its use, in the following circumstances:

(a)In the event of death, disability or physical injury to a third party;

(b)In the event of loss/damage to the property of a third party, other than property being transported in the insured vehicle, owned by the insured, entrusted to the insured in confidence, or under the custody or control of the insured.

The insurer shall pay all expenses for which it has given written approval.

Subject to the liability limits and conditions under this Chapter, the insurer shall also provide compensation for the liability of the driver driving the vehicle with the insured's ordinary knowledge or consent, provided that:

(a)The driver is not entitled to compensation under any other insurance policy; and

(b)The driver has acted in accordance with the meaning, exclusions and conditions applicable under this insurance policy, to the extent applicable to the insured.

If the insurer considers it necessary, it may appoint representatives to investigate or inquire into any death, disability, physical injury or property damage for which a claim may arise under this Chapter. It may also conduct proceedings in court for the defense of any action arising from or connected with any act or proceeding that may give rise to a claim under this Chapter.

In relation to death, disability or physical injury suffered by a third party in respect of which a claim may arise under this Chapter, the insured shall bear such liability, within the limits and conditions specified in this insurance policy. Where such liability is required to be paid to the injured person, or, in the event of death, to the nearest heir of the deceased, the insurer shall make such payment. Such heir shall comply with the conditions of this insurance policy in the same manner as the insured.

No provision or restriction of this insurance policy shall adversely affect the right of any person to receive compensation under the prevailing law relating to vehicles and transportation.

(a)In case of injury or disability If a third party suffers bodily injury, disability, or incurs medical treatment expenses, then, on the basis of the medical report and upon certification by the authorized body or authorized officer, the insurer shall provide compensation per person as follows:

Where more than one of the above-mentioned injuries occurs, the insurer's total liability shall not exceed Rs. 500,000, and for each injury the amount shall be equivalent to the sum prescribed for that injury.

Rs. 500,000

(b)Kuruwā expenses If a third party is injured in a vehicle accident and is admitted to a hospital for treatment, upon certification of such hospitalization, the insurer shall pay Rs. 500 per day for the period of hospitalization, up to a maximum of 45 days, within the limit of medical treatment expenses.

Rs. 500 per day; maximum 45 days

(c)Ambulance expenses If the injured person has to be taken from the accident site or from the initial medical treatment hospital to another hospital, the insurer shall pay Rs. 10,000 (ten thousand rupees) or the actual ambulance expense, whichever is less, for the concerned ambulance, and such expense shall remain within the limit of medical treatment expenses.

Rs. 10,000 or actual ambulance expense, whichever is less

(d)Funeral expenses Regardless of whether the vehicle was at fault or not, if a third party dies as a result of an accident in which the vehicle was directly involved, the insurer shall immediately pay Rs. 50,000 per deceased person as funeral expenses, within the overall limit of Rs. 500,000 per deceased person.

Rs. 50,000 per deceased person; overall limit Rs. 500,000 per deceased person

(e)In case of death Where it is certified by the authorized body or authorized officer in accordance with law that a third party died as a result of a vehicle accident, the insurer shall pay a total of Rs. 500,000 per deceased person, including funeral expenses.

Rs. 500,000 per deceased person

ExplanationWhere the insured pays an additional premium and requests an increase in the insurance amount for the driver and passengers, and the insurer increases the sum insured accordingly, the insurer shall pay claims on the basis of the increased sum insured stated in that same insurance policy.

In the circumstances specified below arising from a vehicle accident, the maximum compensation limits per accident shall be as follows:

1Commercial vehicle

50,00,000 bodily injury; 50,00,000 property damage

If third-party property is damaged as a result of a vehicle accident, the insurer shall pay compensation subject to the terms and conditions of the insurance policy. No depreciation shall be deducted when making such payment.

No depreciation

Where more than one person or property is damaged in an accident, the insurer shall pay compensation according to the priority determined by the insured, subject to the liability limit specified in Clause 8 and the terms and conditions and endorsements of this insurance policy.

The other exclusions, conditions and limits stated in the insurance policy shall remain as they are.

Where the vehicle insured under this insurance policy causes loss/damage to another vehicle while towing or in the course of such towing operation, the insurer shall be liable for compensation for such loss/damage subject to the terms and limits of this insurance policy.

Such towing operation must have been performed without receiving a towing charge.

The insurer shall not be liable for loss/damage to the vehicle being towed or to goods carried in that vehicle.

Where no insurance claim has been made under this insurance policy, at the time of renewal the insurer shall provide the following discount on the renewal premium, except for insurance relating to the risk group and personal accident insurance:

Where no claim has been made, the discount shall be as specified in Schedule–20.

In case a claim has been made, the no-claim discount shall not become effective as a lump sum. Without counting the year in which the claim was made, when renewing the insurance policy, the no-claim discount corresponding to the previous claim-free year shall continue to be maintained for the purpose of granting the no-claim discount. After the claim year, the discount shall start again from the renewal period following the claim-free period. However, where a Total Loss or Constructive Total Loss has occurred and the claim has been paid, the insured shall not receive the above-mentioned discount.

Such discount shall be based not on the insurance policy itself but on the no-claim discount earned by the original insured in respect of the claim. Where the insurable interest of one insured under the insurance policy is transferred to another insured, such discount shall begin from the period in which the new insured's insurable interest begins.

If, within 365 days from the date of change of ownership of the previously insured vehicle, the new owner purchases and insures a vehicle of the same classification and declares that no accident has occurred, the no-claim discount accumulated under the old insurance policy (whether issued by a domestic or foreign insurer) shall be provided, subject to the maximum limit specified in this Directive.

If the new insured renews the insurance policy within 365 days from the date on which the insurable interest was transferred, the discount shall be provided in accordance with Sub-clause (3).

If the insured transfers the insurance of his/her vehicle from one insurer to another insurer, the new insurer shall provide the insured with a discount according to the rate of discount received from the previous insurer.

For the purpose of receiving a discount for no claim under a new insurance policy, the insured shall submit either the renewal notice or a letter from the previous insurer clearly specifying the percentage of discount received for no claim. All insurers shall mandatorily provide insured persons with a renewal notice or certificate clearly stating the percentage of discount available for no claim.

If an insured renews the insurance policy of a vehicle whose insurance period has expired within 35 days from the date on which the insurance should have been renewed, and no claim has been made, the no-claim discount shall apply. The rate of discount applicable to the new insurance policy shall be based on the discount earned under the previous full year's insurance policy.

Where an insured entitled to a no-claim discount renews the insurance policy for a shorter period or, after renewing it for twelve months, requests cancellation of the insurance policy during the period, the no-claim discount payable to the insured shall be calculated proportionately.

Except where otherwise provided in this Directive, a discount shall be granted only where the insurance is continuous.

Where a vehicle owned by an organization is transferred into the name of an employee, such employee shall also be entitled to receive the no-claim discount, provided that the vehicle was insured with evidence of an agreement between the organization and such employee that the vehicle would be used only by that employee.

Where, following the death of the insured, the vehicle is transferred into the name of the insured's legal heir, such heir shall also be entitled to receive the no-claim discount.

The insurer shall not be liable under this insurance policy in the following circumstances:

(a)Any accident, loss/damage, or liability occurring or arising outside the geographical area specified in the schedule of this insurance policy;

(b)Any claim arising under another contract;

(c)Any accident, loss/damage, or liability occurring or arising while the vehicle is being driven by a person other than the driver specified in the schedule of this insurance policy, except in the event of theft of the vehicle;

(d)Any loss/damage arising directly or indirectly from exposure to radiation from radioactive materials remaining after nuclear fission or from the combustion of nuclear fuel, including the combustion of self-sustaining nuclear fission;

(e)Any accident, loss/damage or liability arising from or caused directly or indirectly by a nuclear weapon or by any cause directly or indirectly connected with it;

(f)Any accident, loss/damage or liability arising directly or indirectly from, or symbolically caused by or connected with, volcanic eruption, foreign enemy action, hostility or war-like operations (whether war is declared or not), civil war, military rebellion, military rule, or the events mentioned above.

The insurer shall not be liable for any Consequential Loss arising as a result of an accident involving the vehicle insured under this insurance policy.

Unless the insured has paid the prescribed additional premium, the insurer shall not be liable for any accident, loss/damage or liability arising from or occurring due to a strike, lockout, riotous act, or terrorist/destructive act, as an extension of this insurance policy, until the relevant endorsements relating to strike, lockout, riotous act, and terrorist/destructive act have been issued.

Wherever any word or phrase having a special meaning is used in any part of this insurance policy, it shall have the same meaning wherever it is used.

If any accident or loss/damage occurs under this insurance policy that may give rise to a claim, written notice thereof shall be given to the insurer without delay. The insured shall provide the insurer with all necessary information and assistance regarding such accident. Immediately upon receiving any letter, claim, summons, notice, or information relating to legal proceedings concerning such accident, the insured shall hand it over to the insurer. If the insured receives any information concerning any lawsuit, investigation, or inquiry regarding any matter that may give rise to a claim under this insurance policy, or concerning any fatal injury, the insured shall immediately provide written notice to the insurer. If the insured discovers any theft or other criminal offence that may give rise to a claim under this insurance policy, the insured shall immediately notify the insurer and the police and shall assist in locating the offender.

No person shall, without the insurer's written consent, make any proposal, give any undertaking, make any payment, receive any payment, or grant any discount in relation to a claim under this insurance policy on behalf of the insured or on behalf of any person acting for the insured. Where the insurer wishes to make payment of a claim, settle a dispute, defend a claim, institute proceedings, or conduct or pursue litigation on behalf of the insured, the insurer shall remain fully independent in this regard, and the insured shall provide all information and assistance required by the insurer.

At the insurer's option, the insurer may repair or replace the vehicle or any part or parts attached to it, or pay cash equivalent to the loss/damage.

The insured shall take all reasonable measures to protect the vehicle from loss/damage and to maintain it in proper working condition. The insurer shall always have the right to inspect the vehicle or any part thereof, or the work of any driver or employee of the insured. Where an accident or loss has occurred, the insured shall take necessary and appropriate care and safety measures to prevent additional loss/damage to the vehicle. If the vehicle involved in an accident is driven without carrying out necessary repairs, the insured shall be personally responsible for any additional damage caused to the vehicle as a result.

The insurer may cancel this insurance policy by giving the insured 15 days' notice by registered post sent to the insured's last address. In such circumstances, the insurer shall refund the premium corresponding proportionately to the remaining period from the date on which the insurance policy is cancelled.

15 days

The insurance policy may be cancelled at any time at the request of the insured. In such case, the insurer shall deduct the premium calculated according to the following short-period rates for the period during which the insurance policy remained in force and shall refund the remaining premium:

However, for the purpose of refunding premium, there must have been no claim during the period for which the insurance policy remained in force.

Where the insured receives compensation for loss/damage/liability covered by this insurance policy from another existing insurance policy, the insurer shall not be required to pay compensation or other expenses exceeding the proportionate amount of the loss/damage/liability.

If the vehicle has been insured with another insurer as well, in the event of loss/damage, the insurer shall not pay more than the proportionate amount of compensation payable under this insurance policy.

Where the schedule of this insurance policy specifies a date on which the insurance period expires, the insurance period shall expire at 12 midnight local time on that date.

12 midnight local time

The date and time from which the risk under this insurance policy begins shall be as specified in the schedule of the insurance policy.

If the insured provides false information regarding the vehicle, provides false information concerning facts necessary for assessing the risk, conceals necessary facts, or fails to comply with any condition of this insurance policy, the insurer shall not pay any claim under this insurance policy.

If ownership of the vehicle changes, and the new owner does not insure the relevant risk within 35 days from the date of change of ownership, this insurance policy shall automatically become ineffective. Even if the insurance policy becomes ineffective due to a change in ownership, insurance protection shall be considered to remain in force for the remaining insurance period in respect of liability toward passengers, drivers, operators, helpers, security personnel, other insured employees and third parties, and the insurer shall pay claims accordingly.

35 days

If the insured gives written notice to the insurer within 35 days from the date of sale of the vehicle, the insurance policy may be transferred into the name of the new owner as follows:

35 days

(a)For transfer of the insurance policy, the new owner of the vehicle shall complete the insurance proposal form as soon as possible, and the insurer may transfer the insurance policy after issuing an endorsement.

(b)If the insured had received a discount for not making a claim, the new owner of the vehicle shall not receive such discount.

(c)Notwithstanding anything stated in Sub-clauses (a) and (b), where ownership has automatically been transferred to a legal heir in accordance with the prevailing law, this insurance policy shall be deemed to have been automatically transferred.

Premium shall not be considered paid until a receipt bearing the insurer's proper stamp has been issued.

If the insured or an authorized person acting on behalf of the insured fails to follow the required procedure or obstructs the exercise of any right under this insurance policy, the insured shall be deprived of all benefits under this insurance policy.

If any claim is fraudulent, or if the insured or an authorized person acting on behalf of the insured gives a false statement in connection with the claim, attempts to obtain an improper benefit under this insurance policy, or deliberately causes any loss/damage in collusion with another insured or any other person, the insured shall be deprived of all benefits under this insurance policy.

If the insured does not file any complaint within three months after a claim for loss/damage has been rejected under this insurance policy, or does not file an appeal before the court within the period prescribed by prevailing law after the Insurance Committee has decided in favor of the insurer under the Insurance Act, 2049, the insured shall be deprived of all benefits under this insurance policy.

Three months

If the insured, after receiving compensation under this insurance policy, has the right to receive compensation for the same loss/damage from another party, the insured shall assign that right of recovery to the insurer. Before or after receiving compensation from the insurer, whenever the insurer considers any action or proceeding reasonable and necessary, the insured shall undertake such action at the insurer's expense or permit the insurer to undertake it.

Except where a claim is under consideration or has been suspended, the insurer shall not be liable for any loss/damage occurring more than three months after the date of occurrence of the loss/damage.

Three months

Every notice and other written or printed communication required to be given to the insurer under this insurance policy shall be in writing.

The burden of collecting and providing the evidence necessary to establish a claim under this insurance policy shall rest with the insured.

Any dispute arising in relation to an insurance claim under this insurance policy shall be resolved in accordance with the Insurance Act, 2049.