ARUN GUPTA
FCA, FIIISLA
Associated Surveyors &
Consultants, New Delhi
ARUN GUPTA
FCA, FIIISLA
Associated Surveyors &
Consultants, New Delhi
Hello Friends
Good Afternoon
We have already discussed about insurance claims from insurers’
perspective, their point of view.
Now Let’s discuss about the insurance claims, particularly large insurance
claims from surveyor’s perspective.
ARUN GUPTA
FCA, FIIISLA
Associated Surveyors &
Consultants, New Delhi
We all know that the insurance industry works on the
factor of uncertainly and/or unforeseen events which
can cause some unknown damages. We also know that
accidents do take place which result into unforeseen
losses to the insured and any such sufferer would
always look for financial compensation for the loss so
sustained.
The loss may be small or big and will vary from case to
case. However major losses primarily take place in
corporate sector such as large Manufacturing Units,
Power Plants, Big Hotels/ Hospitals, Large Warehouses,
Telcom Equipment Centers, Big Office Buildings etc.
ARUN GUPTA
FCA, FIIISLA
Associated Surveyors &
Consultants, New Delhi
PREAMABLE
 Whenever there arises a claim, the insurance companies would always try to
support their customer by compensating them at the earliest / ASAP.
 For this purpose, first of all they appoint a surveyor and loss adjuster to carry out
the assessment of the loss preferred by the insured.
 Actually both in large as well as small claims, surveyor’s role is very important,
who acts as a bridge, a line of communication between the insured and the
insurance company and has to act without prejudice in the interest of both the
sides.
 To do his/ her job, the surveyor has to have a professional approach and he/ she
has to keep in mind that in most cases, he has better understanding of an
insurance claim in comparison to the insured, for most of whom, it may be once
in life time incident.
 To carry out the loss assessment, the surveyor needs to look into the following
main issues.
ARUN GUPTA
FCA, FIIISLA
Associated Surveyors &
Consultants, New Delhi
PRELIMINARY / INITIAL STEPS
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Insurable Interest
First and foremost, the surveyor needs to verify the insurable interest which in simple
terms is the eligibility of an insured to lodge the claim, being preferred by him/ her.
He/ she may be doing so in the capacity of an owner, trustee / administrator, tenants
(as per the lease agreement) or the bailee for the property in his / her custody.
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Coverage
The surveyor also needs to check for the coverage of the following :
Insured location vis-à-vis Affected location
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- i.e. The affected location finds Coverage under that insurance policy.
Period of insurance vis-à-vis date of loss
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- i.e. The date of loss falls within the period of insurance as per the policy.
Subject mater of insurance vis-à-vis affected properties.
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- i.e. The affected properties are covered as per insurance policy.
Covered perils vis-à-vis operated peril.
- i.e. The peril so operated finds coverage under the policy in question,
Associated Surveyors &
Consultants, New Delhi
ARUN GUPTA
FCA, FIIISLA
INCIDENT
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Cause of Loss i.e. how the incident had taken place.
Extent of Damage i.e. the loss in physical terms (it could be
Singular Damage or Multiple Damage).
Singular damage means – one type of asset damage viz. Building
or P&M or FFF or Stocks etc.
Multiple damages means – various types of asset damage e.g.
compound loss of two or more than two type of assets viz. Building,
P&M, FFF, Electrical Equipments, Stocks etc.
For evidence of incident & extent of damage – There is required
photography, videography, statement of the eyewitness / insured,
Police Report, Fire Brigade Report, newspaper cuttings etc.
Associated Surveyors &
Consultants, New Delhi
ARUN GUPTA
FCA, FIIISLA
DOCUMENTATION
I.
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Basic / general documents:
Complete set of all relevant insurance policies along with
schedules, warranties and clauses attached and endorsements
upto the date of loss (if any / whatsoever).
Other relevant insurance policies (if any) obtained from any
other insurance company applicable at the affected location/s
and / or related to the insured’s business.
Claim form duly filled in, stamped and signed
Police report (FIR) / Fire brigade report & News paper clippings.
Brief profile of the insured and details of business activities
undertaken by them.
ARUN GUPTA
FCA, FIIISLA
Associated Surveyors &
Consultants, New Delhi
II. Building:
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Location, layout plan of the risk premises along with blockwise occupancy and construction details.
Present valuation of the building above the plinth level as well
as separate cost of plinth & foundations.
Estimates for reinstatement / repair of damaged building with
expected salvage value.
If the coverage is on reinstatement value basis, then bills for
the actual expenses incurred for reinstatement of the
damaged items and their payment details along with
documentary evidence would also be needed subsequently.
ARUN GUPTA
FCA, FIIISLA
III.
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Associated Surveyors &
Consultants, New Delhi
Plant & Machinery / FFF:
Layout details of all the items of plant & machinery, electrical installations &
other utilities in terms of name of the item, model, make, specifications viz.
ratings & capacities etc. and their functions in the production process.
Extent of damage sustained by the respective equipments/machines during
the fire. In case of P&M, it is better if supported with OEMs’ / authorised
agents’ inspection reports.
If the machines are repairable then repair estimates for the same, otherwise
replacement value quotations of the same.
Year-wise capitalization details since inception of business to the date of loss
along with respective copies of original purchase invoices, fixed asset
register and present replacement value quotations.
If the coverage is on reinstatement value basis, then bills for the actual
expenses incurred for repair & reinstatement of the damaged items and their
payment details along with documentary evidence would also be needed,
subsequently.
ARUN GUPTA
FCA, FIIISLA
IV.
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Associated Surveyors &
Consultants, New Delhi
Stocks:
Demarcation of the location of various types of stocks of raw
materials, stock-in-process and finished goods in the layout
plan.
The surveyors needs to understands about insured’s products &
their systems viz. system of purchase / receipt / storage & issue
of raw materials for production, production process with process
flow-chart as well as process wise details of respective items of
stocks and further system of storage of finished goods and
system of sales & dispatch of the same.
List of all the raw materials & finished products alongwith
standard consumption of major raw materials vis-à-vis standard
output of finished goods along with details of by products (if
any), finished product wise.
ARUN GUPTA
FCA, FIIISLA
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Associated Surveyors &
Consultants, New Delhi
Details of materials lying with job workers (if any).
Details of materials of other parties lying with the insured (goods
held in trust) at the time of loss.
List of books of accounts maintained by the insured along with
details of excise / VAT records maintained by the insured.
Balance Sheets of last three years for trend analysis of gross
profit with regard to expenses and stock valuation. Current
period manufacturing & trading account along with purchase /
sale and quantitative stock movement details.
Copies of sales tax / VAT returns.
Details of demand raised by the excise / VAT department against
cenvat / VAT on account of damages sustained during the fire
(wherever applicable).
We should understand that timely & proper documentation (like
other aspects of the fire claim), is very important and will always
help in faster claim settlement.
Associated Surveyors &
Consultants, New Delhi
ARUN GUPTA
FCA, FIIISLA
SALVAGE
 To minimise the loss by getting better salvage
recovery, the surveyor should get all the salvage
segregated / sorted out and stored in a proper storage
area and then salvage disposal should be taken up
either through limited quotation route or through
tendering process by calling bids through
newspapers.
ARUN GUPTA
FCA, FIIISLA
Associated Surveyors &
Consultants, New Delhi
INDEMNIFICATION / LOSS ASSESSMENT
After concluding the verification of the physical circumstances and that of the relevant
documents & details, the surveyor has to work out the loss assessment.
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FOR FIXED ASSETS – I.E. BUILDING / P&M / FFF THE STEPS WOULD BE :
Value of damaged assets
ii) Less – Cost of improvements (if any)
iii) Less – Depreciation (in case the coverage is on market value basis)
iv) Less – Salvage
v) Less – Under insurance (if any)
vi) Less – Policy deductible (as per the policy)
vii) Net Liability
i)
 REMARK:
If the policy is on reinstatement basis, then the depreciation will not be applicable.
ARUN GUPTA
FCA, FIIISLA
Associated Surveyors &
Consultants, New Delhi
 STOCKS:
*
*
*
*
*
*
Value of damaged stock
Less – Dead / obsolete stock
Less – Salvage
Less - under insurance (if any)
Policy deductible
Net Liability
ARUN GUPTA
FCA, FIIISLA
Associated Surveyors &
Consultants, New Delhi
ADEQUACY OF COVER
o
The value at risk is required to be worked out as per
the coverage under the policy.
o
In case of declaration policy, the surveyor is also
required to work out the adequacy of declaration in
addition to adequacy of sum insured.
ARUN GUPTA
FCA, FIIISLA
Associated Surveyors &
Consultants, New Delhi
 The surveyor also needs to consider the following on
reimbursement basis :
(i) Fire fighting expenses.
(ii) Debris removal expenses.
(iii) Architects’ and Consulting Engineers’ fees.
Remark
Both (ii) & (iii) are subject to the limits specified in the
policy.
ARUN GUPTA
FCA, FIIISLA
Associated Surveyors &
Consultants, New Delhi
LOSS MINIMISATION
o Surveyor has also to advise the insured to try
his very best to minimize the loss of the insured
property.
ARUN GUPTA
FCA, FIIISLA
Associated Surveyors &
Consultants, New Delhi
CONCLUSION
In nutshell, while carrying out the survey & loss
assessment, the surveyor should remain fair & judicious
and should try to indemnify the insured in a rational
manner, keeping in view the coverage as well as terms &
conditions of the relevant insurance policy.
THANK YOU