Premium Adjustment Clause - Property & Business Interruption

Underinsurance arises when the declared value is inadequate to reflect the value of risk. Its intention is to ensure that claims paid by the Insurer do not exceed the premium pool collected from their customers.

But what about over insurance? In some instances the declared value may exceed the value of risk and a Policyholder may have paid too much premium.

The declared values specified on property, gross profit and payroll under a Mark IV Industrial Special Risks Policy at the beginning of the renewal period are provisional?

The "Memoranda" contains an "Adjustment of Premium Clause".

This allows the declared values specified at the beginning of the renewal period to be reviewed at the end of the renewal period.

If the initial declared values are found to be understated an additional premium may need to be paid. However, if the declared values are found to be overstated a refund may be due.

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Author

Published with permission of Claim Solutions Pty Ltd.

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Insurance Policy

Country: - Australia.

Policy Description: - Mark IV Industrial Special Risks (ISR) policy recommended by the National Insurance Brokers Association (NIBA).

Insurer: - Various.

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External Links

 

 

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