Section 1 - Property Damage
The cover provided for property by the Policy is expressed in three lines and qualified by the limitations and exclusions:
"If during the Period of Insurance School Property is lost stolen or accidentally or maliciously destroyed or damaged the Company will pay the amount of the loss or damage or at its option repair reinstate or replace such School Property as specified in Section Condition 2".
Loss or Damage to School Property. What property is covered?
The policy defines both buildings and contents. These definitions are more than adequate for most schools. You are recommended to read through these definitions to ensure that they are adequate for your school. The policy definition of school property does NOT, for example, include synthetic pitches and these, and any other differences from the normal can be added on request. The policy also outlines what is not insured and in so doing qualifies the broad statement of cover in the second sentence above.
What are the main Exclusions?
1. The first €300 of all claims other than for Fire, Lightning or Explosion.
2. (As we have stated, the purpose of an insurance policy is to cover only the fortuitous loss and not damage occurring over a period of time.) Loss or damage resulting from:
|(i) vermin, insects, wet and dry rot or damp mildew;|
|(ii) normal settlement, marring, scratching, exposure to light, change in colour, texture or finish;|
|(iii) rust, wear, tear, corrosion, shrinkage, expansion, gradual deterioration or any gradually operating cause;|
|(iv) any form of gradual pollution or contamination.|
3. Loss or damage to fences, gates, posts or property in the open resulting from storm, flood vandalism or malicious damage.
4. Malicious damage, escape of water or oil or theft when the building is left unoccupied for more than 60 consecutive days other than for normal school holidays.
5. Theft or attempted theft not involving violent and forcible entry to or exit from the Building(s) or violence or threat of violence to an Employee other than theft of
|(i) external lead copper or other metals|
|(ii) fixed external lighting and security equipment|
|(iii) Contents where the liability of the Company in respect of one loss does not exceed €10,000 with the exception of personal effects of any kind where the limit in respect of any one loss is reduced to €650|
How should the premises be insured?
To ensure that the sums insured are adequate in the event of a loss, the Board of Management should insure for the full costs of rebuilding the school in the event of its destruction and the full value of the contents.
What is the Sum Insured?
The Sum Insured represents the maximum liability of the Insurer in the event of a claim. The Board of Management (the "Insured") is responsible for setting this figure.
How does the Board Arrive at the Sum Insured ?
The sum insured on the building is the full cost of rebuilding (see above) whilst the sum insured on contents represents the cost of replacement in the event of their total destruction. The Board is recommended to take professional advice in arriving at the Sum Insured. See notes on Valuation of property in Chapter 3.
Each building will be different because of its construction and design and some form of professional advice is advisable. The factors which need to be considered are:
|(a) cost of materials necessary to rebuild|
|(b) costs of clearing the site and debris removal|
|(c) costs of site works and drainage|
|(d) fees of architects, surveyors and other professional advisors|
|(e) an inflation provision based upon the estimated period between destruction and reconstruction all inclusive of VAT.|
How important is the Sum Insured?
The adequacy of the Sum Insured is very important in ensuring that you are properly protected in the event of a serious loss. The Rules for National Schools issued by the Department of Education stipulate that 'school premises and furniture be insured adequately against damage ..... where such insurance has not been effected, grants will not be made for the purpose of rebuilding or refurbishing'.
Is the property of teachers and pupils covered?
The property and personal effects of teachers and pupils are covered subject to the terms, conditions, exclusions and limitations of the policy where loss or damage occurs as a result of loss or damage to the building.
Property of teachers and pupils is more appropriately insured under a Household policy taken out by the teachers or by parents of the pupil.
Are teachers' cars parked on the grounds covered?
It is not uncommon for teachers and other staff to park their cars in school grounds. The Board of Management may make spaces available but they do not undertake the safety or security of the vehicle.
Cars are parked on school grounds at the risk of the owner. The Board of Management should not undertake or assume responsibility for any loss or damage.
It is recommended that a Disclaimer Notice be affixed to the wall to the effect that the Board of Management does not accept liability for loss or damage to cars parked in school grounds.
Does The Custodian School Protection Policy cover Central Heating Systems ?
Yes. The policy covers loss of or damage to central heating systems. The systems, of course, also include pipes and radiators.
What about other engineering plant and equipment ?
The Definition of School property includes such equipment. However plant and equipment such as lifts and air receivers (high pressure plant) must, by law, be inspected.
Is all damage covered?
An insurance policy only covers a fortuitous loss. Many items have a limited life-span and damage caused by normal processes of wear and tear is not covered. To cover damage occurring over a long period of time would make an insurance policy a maintenance contract.
What if the existing building is too big?
If your school falls into this classification then of course you will ask the question 'why should we insure for the full value?'
The answer to your question is that, you do not necessarily have to. You can under the terms of the policy opt for building a new structure in modern materials and the sum insured should reflect the cost of building such new structure. In the event of partial damage the repairs would be undertaken as far as possible in existing materials. Therefore in deciding on a sum insured, care must be taken to make provision for repair costs to cater for a situation where there is a substantial partial loss and repair rather than rebuilding, is still possible.
Allianz representatives can provide you with some indicative guidelines in relation to the average costs of building modern churches. This option is not suitable where the building is a protected structure or where full reinstatement would be required.