MR 601 – Adjustment of Sum Insured and Premium

M-Clauses162 Views
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It is agreed and understood that otherwise subject to the terms, exclu­sions, provisions and conditions contained in the Policy or endorsed thereon, the following alteration of Memo 1 of the provisions applying to Section 1 shall apply to this insurance:

The Insurers shall waive the right to apply underinsurance, provided the sum insured at the beginning of the insurance was correctly fixed and the premium as well as the sums insured are adapted at each renewal date (annually) to the changes in machinery production prices and the cost of labour.

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Such adaptation shall be made according to the following formulae:

   

S  = sum insured of the current year

S0 = sum insured as at the beginning of the insurance

E  = machinery production price index of the current year

Eo= machinery production price index as at the beginning of the insurance

P = premium of the current year

Po = premium as at the beginning of the insurance

L = labour cost index of the current year

Lo = labour cost index as at the beginning of the insurance

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