Munich Re Wording : The Base of Closure PAR **

All contracts should include wording which outlines the rights and obligations of both parties, terms & conditions and exclusions. Likewise in the issuance of insurance policies, such as fire insurance with Property All Risks coverage using Munich Re wording standard. PAR is the insurance service which guarante for building, factory, school, hospital, office building and so for  with more complex guarantee and insurance coverage is relatively large compared to ordinary fire insurance. Insured value of at least IDR 1 billion and if the above IDR [Rp] 2 billion required surveyed by Insurers (insurance companies).

Closure procedure is similar to fire insurance. By filling out the same fire application and  attach with a list of  contents of the building (furniture, furniture, electronics, machinery, stock, equipment et cetera) if total value of the content in building exceeds IDR  100 000 000  (Indonesian Rupiah).

Briefly, Property All Risks Insurance is the most popular type of insurance compared with others of insurance, because PAR ensuring all risks except a few risks are listed in the exemption.

MUNICH RE WORDING

Munich Re (Munich Reinsurance Company founded in 19 April 1880, German : Münchener Rückversicherungs-Gesellschaft) is a reinsurance company based in Munich, Germany. It is one of the world’s leading reinsurers. Munich Re became renowned after the San Francisco Earthquake of 1906 as the only insurer that remained solvent after paying out all the claims.

Reinsurance

Munich Re has around 5,000 clients (insurance companies) in about 150 countries. It assumes part of the risk covered by these insurance companies, as well as providing comprehensive advice on insurance business. In addition to its Munich head office, Munich Re has more than 50 Business Units around the world. Munich Re provides reinsurance cover for life, health, casualty, transport, aviation, space, fire and engineering business. In 2010, gross premiums written in the reinsurance segment amounted to around €23.6bn.

Editorial policy and the provisions or clausules that are summarized in the policy agreement Property All Risk coverage are adopted from Munich Re Wording. As the following points  :

MATERIAL DAMAGE

Ensure that the object suffers a loss, destruction, or physical damage to the unexpected, sudden and accidental during your stay  at the location listed in the summary of policy on matters other than those mentioned in the exclusions on the policy either general or specific exemption.

Expansion of additional benefits (material damage)

1. Public Authorities Clause

2. Reinstatement Value Clause

3. Sprinkler Leakage Clause -  Maximum IDR 100 million with 
   deductible IDR 10 million

4. Temporary Removal Clause

5. Average Relief Clause (85%)

6. Architect, Surveyors and Engineers Expenses -  Maximum 
   10% of the Sum Insured each

7. All Other Contents - Maximum Rp 10 million per item and 
   Rp 100 million   for the whole item

8. Bankers Clause

9. Capital Additions Clause - Maximum  10% of the respective 
   SI (Sum Insured)

10. Leased Property Clause

11. Lessors Interest Clause

12. Stock Declaration Clause - if the policy which cover  stock 
    is adjustable policy

13. Alterations Clause

14. Minor Alterations and Repairs Clause

15. Awning Blinds Signs or Other Fitting of Every Description 
    Clause – Maximum of IDR 250 million

16. Brand and Label Clause

17. Civil Authorities

18. Computer Records Clause

19. Cost of Re-erection Clause

20. Designation Clause

21. Employees Personal Effects Clause, maximum IDR 1 million per employee  and one Rp 10 million in a single incident

22. Fire Brigades Charges

23. General Interest Charges

24. Internal Removal Clause

25. Loss of Damaged Goods Clause

26. Outbuildings Clause  - Including the TSI values

27. Selling Price Clause

28. Services Clause

29. Storage Warranty

30. Tenants Improvements Clause

31. Vehicle Load Clause

32. Workmens Clause

33. Impact by Own Vehicles

Business interruption

             Benefits granted limited to loss of gross profit is  :
             1.    Decrease in sales revenue (reduction in turn over)
             2.    Increase in labor costs and the amount that can be
                     paid  (Increased in cost of working)

Reduced by an amount that is saved during the indemnity period in relation to costs   and  expenses of the business that can be paid
out of gross profit is lost or diminished as a result of the loss, destruction or damage which may be compensated on the basis of Material Damage

Expanding the benefits of the business interruption  :

1. -    Denial or Preventation of Access

2. -    Supplier's Extension

3. -    Customer's Extension.

UNDERWRITING CONSIDERATIONS  :

1. -    Prospective Customers
2. -    Occupational
3. -    Classroom Building construction
4. -    Age Structure
5. -    Fill Building
6. -    Location Object
7. -    Surrounding property
8. -    Sum Insured
9. -    Guarantees and warranties required extensive
10. -    Details of the sum insured
11. -    Survey Report
12. -    Accommodation business
13. -    Overview of participants operating activities
14. -    Annual report and financial statements of the last
          2 years (for Business interruption)
15. -    Loss recor last 5 years