Having the right insurance protects

Photo: AP/Charles Sykes

One of the photos that I saw showing the damage from ex Hurricane Sandy was this one of a mass of the iconic New York cabs damaged by flood water.

It reminded me that good quality business pack policies and the Australian Industrial Special Risks (“ISR”) policies provide cover for the disruption caused to the business due to damage to registered motor vehicles even though the vehicles themselves are excluded.

The reason why the vehicles themselves are excluded is that there is a more specific policy designed to cover vehicles. In our part of the world this is known as Motor Insurance (Commercial Motor, Fleet Motor are just two), and in the US it is known as Auto Insurance.

Taking the ISR Mark IV wording as an example, the Interruption cover for Registered Vehicles and Trailers provided by the policy reads:

REGISTERED VEHICLES AND / OR TRAILERS

Notwithstanding the provisions of Property Exclusion 5, this Policy extends to include loss resulting from interruption of or interference with the Business occasioned by Damage to registered vehicles and/or trailers whilst such vehicles or trailers are at the Premises owned or occupied by the Insured; provided always that this Policy does not cover loss resulting from physical loss, destruction of or damage to such vehicles and/or trailers whilst they are being used on any public highway or local thoroughfare.”

Property Exclusion 5 (refer Sub-Clause 11.5) excludes certain registered vehicles or trailers. However, while loss arising from Damage to Property excluded under Property Exclusion 5 would not be covered, Memorandum 12 specifically refers to the circumstances set out in Property Exclusion 5 and provides that loss from Damage described in this exclusion will be covered under Section 2 – Consequential Loss.

The sub-clause states that there is no cover if any such vehicles or trailers are being used on any public highway or thoroughfare”, and therefore there is no benefit gained under this Memorandum by using “Anywhere in Australia” as the Situation in the Policy Schedule.

Have you ever been in a major capital city trying to get a cab just after midnight on New Year’s Eve?  If you think that is bad, try making a claim when you do not have the right insurance.

This is a very useful cover for any Insured with a fleet of vehicles where their loss or damage would cause an interruption to the business. Delivery vehicles, buses and of course taxis all fall into this category.

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