Design Defect Cover in C.A.R.

There are five DE exclusions and they fall in three categories; Outright Exclusion, Cover for Consequential Damage, Exclusion for Betterment & Improvement

• Table has a design defect in one of its leg The defective table leg buckles and the table falls on the computer. The table, vase, phone and the computer are damaged.
• Flower Vase is placed on the table
• Computer is installed next to the table
• Leg is the defective item
• Table is the defective property

The defective table leg buckles and the table falls on the computer. The table, vase, phone and the computer are damaged.

DE1

Excludes all damages due to design defect. Any damage to table leg, table, flower vase as well as the computer is excluded if these items were damaged due to design defect of the table legs.

DE2

Permits cover for damage to the property of the insured (which does not rely upon the defective property for support) surrounding the defective property. Hence damage to computer is covered but damages to table, vase and phone are not covered since they rely upon the defective property for support.

DE3

Permits cover for the damage to all the insured’s surrounding property whether relying upon the defective property for support or not. Hence damage to computer, vase and phone is covered. Damages to table are not covered

DE4

It is similar to DE3 but is intended to apply in respect of machinery rather than building work.

DE5

Covers damages to the defective property (table) also alongwith the coverage available in DE2 and DE3. But excludes any cost for betterment of the defective item (table leg) or improvement in the specification of the defective property (table).

For more information on Contractor’s All Risk Policy or other insurance products to cover construction risks, write to us on info@optima.co.in

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