MR 731 – Adjustment of Sum Insured and Premium

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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 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

E0     machinery production price index as at the beginning of the insurance

P      premium of the current year

P0     premium as at the beginning of the insurance

L       labour cost index of the current year

L0      labour cost index as at the beginning of the insurance

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