Commercial Vehicle Insurance Policy

Whereas the insured by a proposal and declaration which shall be the basis of this contract and is deemed to be incorporated herein has applied to the Ethiopian Insurance Corporation (hereinafter called the Corporation) for the insurance hereinafter contained and has paid or agreed to pay the premium as consideration for such insurance.

Now this policy witnesses that in respect of events occurring during the period of insurance and subject to the terms exceptions and conditions contained herein or endorsed hereon, (herein after collectively referred to as the terms of this policy).

Section I

Insurance on the motor vehicle

Loss or damage to the Insured motor vehicle

The Corporation will indemnify the insured against loss of or damage to the insured motor vehicle and/or its accessories whilst thereon:
a) by accidental collision or overturning or collision or over turning consequent upon mechanical breakdown or wear and tear but excluding damage to tyres unless such insured motor vehicle is damaged at the same time;
b) by fire, external explosion, self ignition, lightning, theft or attempted theft;
c) by malicious act;
d) whilst in transit (including the processes of loading and unloading incidental to such transit) by road, rail, inland waterway, lift or elevator; and
e) by impact damage caused by falling objects provided no convulsion of nature such as flood, typhoon, hurricane, volcanic eruption, earth quake etc. is involved.

Limit of liability

In the event of loss of or damage to any motor vehicle described in the schedule, the Corporation may at its own option repair or replace such motor vehicle or part and/or accessories or pay in cash the amount of the loss or damage. The liability of the Corporation shall not exceed the actual value of the parts damaged or lost plus the reasonable cost of fitting. In no case shall such liability exceed the insured%u2019s estimate of the value of such motor vehicle (including accessories) as specified in the schedule or the market value of such motor vehicle (including accessories) at the time of the loss or damage, which ever is the less.

Protection and removal after accident

If the insured motor vehicle is disabled by reason of accidental loss or damage covered under this policy, the Corporation will pay reasonable cost of protection and removal to the nearest competent repairer, but in no case shall the amount exceed 20% (twenty percent) of the repair cost.

Hire purchase or mortgage agreement

If the insured motor vehicle is subject to a hire purchase or mortgage agreement, any payment in cash shall be made to the owner described in the hire purchase or mortgage agreement whose receipt shall be a full and final discharge to the Corporation in respect of such loss or damage.

5. Authority to repair The insured may authorize the repair of the insured motor vehicle necessitated by damage for which the Corporation is liable under this policy provided that:
6. a) the estimated cost of such repair does not exceed the authorised repair limit stated in the schedule;
   b) a detailed estimate of the cost is forwarded to the Corporation immediately; and
   c) the insured shall give the Corporation every assistance to see that such repair is necessary and the charge reasonable.
7. Unobtainable parts

If any damaged accessory or part of the insured motor vehicle is obsolete and can not be obtained from the dealer, the Corporation shall pay the value of the accessory or part at the time of the damage, not exceeding the manufacturer’s last quoted price for the accessory or part including a reasonable cost of fitting such accessory or part.

 

Exceptions to Section I

The Corporation shall not be liable to pay for:

1. any excess amounts stated in the schedule;
   2. consequential loss sustained by the insured or loss of use of any insured motor vehicle described in the schedule of the policy;
   3. wear and tear and/or depreciation of any motor vehicle described in the schedule or any part of such motor vehicle;
   4. mechanical or electrical, electronic or computer break-down or failure of any part of any motor vehicle described in the schedule;
   5. damage to tyres by braking, punctures, cuts or bursts
   6. loss of or damage to any communication equipment of any kind;
   7. any reduction in the market value of the insured motor vehicle following any repair whether or not as a result of any claim under the policy; and
   8. loss of or damage in respect of any radio, record player, tape recorder, canvas, ropes, unless specifically declared and insured;

Section II-Liability to third parties

1. The Corporation will subject to the limits of liability stated in the schedule indemnify the insured in the event of an accident caused by or arising out of the use of the insured motor vehicle or in connection with the loading or unloading of the insured motor vehicle against all sums including claimant%u2019s costs and expenses which the insured shall become legally liable to pay in respect of:
   (a) death of or bodily injury to a person; and
   (b) damage to property.
   2. Interms of and subject to the limitations and for the purpose of this section, the Corporation shall indemnify any authorised driver who is driving the insured motor vehicle provided that such authorised driver:
   a) shall as though he were the insured observe fulfill the terms of this policy in so far as they can apply;&
   b) is not entitled to indemnity under any other policy.
   3. The Corporation will pay all costs and expenses incurred with its written consent.
   4. The Corporation may at its own
   option:
   (a) arrange for representation at any inquest or fatal inquiry in respect of any death which may be the subject of indemnity under this section; and
   (b) assist in the defence of proceedings in any court of law in respect of any act or alleged offence causing or relating to any event which may be the subject of indemnity under this section.

 

Exceptions to Section II

The Corporation shall not be liable in respect of:
1. death of or bodily injury to any person arising out of and in course of his employment by the insured;
2. loss of or damage to property (including any motor vehicle) belonging to or held in trust by or in the custody or control of any person claiming indemnity under this policy;
3. death of or bodily injury to any person being carried in or upon or entering or getting onto or alighting from the insured motor vehicle at the time of the occurrence of the event out of which any claim arises;
4. damage to any bridge, weighbridge or viaduct or to any road or anything beneath by vibration or by weight of the insured motor vehicle or of the load carried by the insured motor vehicle;
5. death, injury or damage to property caused by sparks or ashes from the insured motor vehicle described in the schedule; and
6. death, bodily injury or damage to property caused by or arising beyond the limits of any carriageway or thoroughfare in connection with the bringing of the load to the insured motor vehicle for loading or the taking away of the load from the insured motor vehicle after unloading by any person other than the driver or attendant of such insured motor vehicle.

General Provisions

No claim discounts

If no claim is made or arisen under this policy during the period of insurance immediately preceding the renewal of the policy, the renewal premium will be reduced in accordance with the Corporation%u2019s scale of no claim discount applicable at the time of such renewal.

Suspension of cover for lay-up

Upon notice being given in writing to the Corporation that the insured motor vehicle is to be laid-up and out of use otherwise than as a result of damage or loss covered by this policy, the policy will be suspended as from the date of receipt of the notice and provided that the cover is suspended for at least twelve consecutive weeks, the Corporation will extend the policy for the same number of weeks.

ExcChange of ownership

In the event of change of ownership of the insured motor vehicle to another person, the cover granted to that other person will be as follows:
(a) Not withstanding any provision to the contrary, the policy shall continue with the assignee where the insured motor vehicle is assigned; and
(b) the assignee and the Corporation may terminate the policy within three months from the date of assignment.

Change of risk

The insured shall give notice to the Corporation of any change in the risk covered by the policy. Unless such notice is given and subsequently endorsed on this policy by the Corporation any indemnity for loss or damage or liability caused by the change of the risk shall be forfeited.

Service and repair clause

This policy, excluding indemnity to third party liability, shall operate whilst the insured motor vehicle is in the custody of the motor trade for service or repair.

Insurance provided

1. Where the insurance provided is %u201CComprehensive%u201D all sections of this motor policy shall be operative.
   2. Where the insurance provided is %u201CThird Party, Fire and Theft%u201D Section I operates only in respect of loss or damage caused solely and directly by fire, self-ignition, lightning, external explosion, theft or attempted theft.
   3. Where the insurance provided is %u201CThird Party only%u201D, section I of this policy is cancelled.

General Exceptions (applicable to all section)

The Corporation will not be liable to make any payment in respect of:- 
1. any accident, loss, damage or liability caused, sustained or incurred:
a) outside the territorial limit of Ethiopia;
b) whilst any motor vehicle described in the schedule is engaged in racing, pace making reliability trial or speed testing or for any purpose in connection with the motor trade or whilst the insured motor vehicle is being used other-wise than for the purpose mentioned in the schedule; and
c) whilst the driver of the insured motor vehicle is under the influence of intoxicating liquor or drug.
2. any contractual liability;

3. loss of or damage to the insured motor vehicle or any form of liability attached whilst the motor vehicle insured under this policy is being driven by any person who has no driving license permitting him to drive the insured motor vehicle or is dis-qualified from holding or obtaining such license.
4. any damage or liability directly or indirectly proximately or remotely occasioned by or contributed by or traceable to or arising out of or in connection with flood, typhoon, hurricane, windstorm, volcanic, eruption, earthquake, or other convulsion of nature.
5. war, invasion, act of foreign enemy, hostilities or war-like operations (whether war be declared or not) civil war, mutiny, riot, strikes, civil commotion, military or popular rising, insurrection, rebellion revolution, military or usurped power, martial law or state of siege armed or unarmed robbery shifta action, hold-up or any act of banditry or any of the events or causes which determine the proclamation or maintenance of martial law or state of siege.
6. loss of or damage to the insured motor vehicle or any form of liability whilst the insured motor vehicle is towing any trailer not specifically insured under this policy or any disabled mechanically propelled motor vehicle.7. any loss, damage or liability caused by overloading or strain or if the number of persons exceed the seating capacity of the motor vehicle described in the schedule of the policy as specified in the ownership booklet issued by the licensing Authority and if this is with in the knowledge of the insured.
   8. loss or destruction of or damage to any property whatsoever or any loss or expense whatsoever resulting from or arising from or any consequential loss or any legal liability of whatsoever nature directly or indirectly caused by or contributed to or arising from:
7. a) ionizing radiation or contamination by radio activity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel:
   b) the radioactive, toxic explosive or other hazards properties of any explosive nuclear assembly or nuclear component.
8. death or bodily injury or damage to property ordamage to the insured motor vehicle caused by or arising out of the explosion of a boiler or air pressure vessel forming part of or attached to or on the insured motor vehicle described in the schedule of the policy.

General Conditions

Insured%u2019s Duty

The due observance and fulfillment of the terms and conditions of this policy in so far as they relate to anything to be done or not to be done by the insured or any person claiming to be indemnified and the truth of the statements and answers in the proposal or accident report shall be conditions precedent to any liability of the Corporation to make any payment under this policy.

Care of Motor vehicle

The insured, his employee or any authorised driver or any one in charge of the insured motor vehicle shall take all reasonable steps to safeguard the motor vehicle from loss or damage and maintain the insured motor vehicle in efficient and road worthy condition. The Corporation shall have at all times free and full access to examine the motor vehicle or any part thereof or any driver or employee of the insured. In the event of any accident or breakdown the insured motor vehicle shall not be left unattended without proper precautions being taken to prevent further loss or damage. If the motor vehicle be driven before the necessary repairs are effected, any extension of the damage or any further accident arising shall be excluded from the scope of the indemnity granted by this policy.

Fraud

If a claim is in any way fraudulent including over valuation of the insured motor vehicle with intent to defraud or if fraudulent means is used by the insured or by any one acting on his behalf to obtain any benefit under this policy or if any loss or damage to the insured motor vehicle is caused by the willful act or with the connivance of the insured, all benefits under this policy shall be forfeited.

Notification of accident

Notice shall be given in writing to the Corporation immediately upon the occurrence of any accident or loss or damage. In the event of any claim, every letter, claim, writ, summons and/or process shall be forwarded to the Corporation immediately on receipt by the insured. Notice shall also be give in writing to the Corporation immediately the insured shall have knowledge of any impending prosecution in respect of any occurrence which may give rise to a claim under this policy. In case of theft or other criminal act which may be the subject of a claim under this policy the insured shall give immediate notice to the Police and co-operate with the Corporation in securing the conviction of the offender.

Conduct of claim/subrogation

No admission, offer, promise or payment shall be made by or on behalf of the insured or any person claiming to be indemnified without the written consent of the Corporation. The Corporation shall be entitled if it so desire to take-over and conduct in its name defence in civil cases or the negotiation and settlement of any claim or to institute civil action in its name for its own benefit any claim for indemnity or damages or otherwise against any third party. The Corporation shall have full discretion in the conduct of any proceedings and in the settlement of any claim and the insured shall give all such information and assistance as the Corporation may require.

Other insurance

If at the time any claim arises under this policy there is any other insurance covering the same loss, damage or liability, the Corporation shall not be liable to pay or contribute more than its rateable proportion of any loss, damage, compensation, costs or expenses.

Cancellation

The Corporation may cancel this policy by giving to the insured fifteen days notice by registered letter to the insured at his last known address. In such event the Corporation will return to the insured the premium paid less the pro-rata portion for the period the policy has been in force. The policy may also be cancelled at anytime by the insured on written notice and provided no claim has arisen during the current period of insurance the insured shall be entitled to a return of premium less the premium at the Corporation%u2019s short period rates for the period the policy has been in force.

Arbitration

If any difference arises as to the amount to be paid under this policy (liability being otherwise admitted), such difference shall be referred to the decision of an arbitrator to be appointed in writing by the parties in difference or, if they cannot agree upon a single arbitrator, to the decision of two arbitrators, one to be appointed in writing by each of the parties, within one calendar month after having been required in writing so to do by either of the parties, or in case the arbitrators do not agree, of un umpire to be appointed in writing by the arbitrators before entering upon the reference. The umpire shall sit with the arbitrators and preside at their meetings. The making of an award shall be a condition precedent to any right of action against the Corporation.

Contribution

In the event of loss of or damage to any part of the insured motor vehicle described under the schedule of this policy, the insured shall be liable to pay reasonable contribution on the replacement cost of new accessories or spare parts on account of wear and tear or depreciation.

Replacement/Total Loss

In the event of damage where repair is carried out or where the vehicle is damaged beyond repair and where total loss payment is to be effected, the insured shall hand over the replaced old spare parts or the damaged vehicle to the Corporation with the necessary power of attorney, title deed and other documents. The Corporation shall have full right to own, sale or transfer ownership of the old spare parts or the damaged vehicle.

Removal from Accident site

The Corporation upon receipt of notice of accident, the damaged vehicle will be removed from the sight of the accident, so that it is protected from further damage. This Act of the Corporation shall not be considered as admission of liability. The claim can be rejected on grounds of the insurance Policy after further investigation is carried out. In such cases the insured shall reimburse all guarding & towing expenses paid by the corporation.

Note:

This article is prepared to elaborate about the Commercial Vehicle Insurance Policy. Therefore, legally it shall not come into force.