The Engineering Insurance Guidance provides detailed instructions on a broad range of covers including machinery breakdown, business interruption from machinery breakdown, comprehensive project, advance loss of profits etc. In many instances the Engineering Insurance Guidance is nonmandatory, but in other instances it contains very specific instructions that KSA insurers must follow. A number of these instructions have a direct impact on cover. For example, the issuance of a wording described as a“ Machinery Breakdown” or“ Boiler and Pressure Vessel” policy will have an assumed standard level of cover, as prescribed by the Engineering Insurance Guidance.
While the Engineering Insurance Guidance is still untested, it appears that KSA insurers are able to underwrite on terms that will extend or broaden the scope of the assumed standard level of cover, but KSA insurers are unable to limit the scope of cover in respect of certain classes of business, or to provide an indemnity on a basis that is not in accordance with the“ assumed standard level”.
The Engineering Insurance Guidelines contain a number of further prescriptive requirements, for example, instructions on minimum deductibles or waiting periods( and maximum deductibles for CAR / EAR covers). In many instances the SAMA instructions can simply be considered to be
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