Machinery Insurance Conditions

Valid as of 01.10.2021

The Terms and Conditions of Machinery Insurance describe the extent of insurance protection, action to be taken in the case of an insured event and principles for indemnification.

Machinery insurance provides insurance cover if the machine is damaged, destroyed or lost due to an unexpected and unforeseen event described in the conditions. Such situations may include a traffic accident or other accident, vandalism, fire, natural disaster, theft of the machinery, and damage caused by other events.

The parts of the insurance contract are the insurance policy (hereinafter policy) and these Terms and Conditions of Machinery Insurance (hereinafter Terms and Conditions).The sum insured (maximum limit of indemnity) and the amount of deductible (the excess; the amount that will be borne by the policyholder in the event of an insured event) are indicated in the policy for the insured object. Before concluding the insurance contract, the policyholder must make sure that the information specified in the policy is correct and that the scope of insurance coverage is appropriate, and read through the Terms and Conditions.

The insurer is AS LHV Kindlustus (hereinafter LHV).

The policyholder is the person specified on the policy. Persons equated with the policyholder are the owner of the insured object and all persons lawfully in possession or use of the insured object (hereinafter policyholder).

Contact details of the Insurance Provider

Client support
Mon–Fri 9–17
699 9111
kindlustus@lhv.ee
lhv.ee

Claims handling
round the clock
680 1122
kahjud@lhv.ee
lhv.ee

Insured object
The insured object is a piece of equipment specified in the policy: a piece of non-road mobile machinery, tractor, trailer or coupling device, a special-purpose machine (hereinafter machinery) at the level of completeness specified by the manufacturer.
1. Non-road mobile machinery or machine is a motor vehicle with wheels or tracks, intended for a specific task, with at least two axles and an as-designed speed of at least six kilometres per hour (excavator, harvester, loader, forklift, etc.). Along with the non-road mobile machinery, an interchangeable towable device at the level of completeness specified by the manufacturer is also insured.
2. Tractor is a wheeled or tracked agricultural, forestry or other motor vehicle with at least two axles and an as-designed speed of at least six kilometres per hour (wheeled tractor, logging or forestry tractor, etc.). Along with the non-road mobile machinery, an interchangeable towable device at the level of completeness specified by the manufacturer is also insured along with the tractor.
3. Interchangeable towed equipment is an operating mechanism used in conjunction with a tractor or mobile machinery, the main purpose of which is to supplement or modify the machine's functions and which is designed to be towed by machine (e.g. wheeled tractor suspension system, harvester heeder, logging tractor cutting head, backhoe's front or back bucket etc.).The interchangeable towed equipment cannot be used independently. If several interchangeable devices from different manufacturers are used to operate the machine, these must be indicated separately on the policy. If multiple interchangeable devices are used to operate the machine, the insurance cover applies to the disassembled device in the place where the machine is stored.
4. Trailer or coupling device means a device which is towed or pushed forward by a tractor or non-road mobile machinery and is attached to the tractor with a coupling and which is designed and or has been adapted for a specific purpose and has at least one wheel permanently resting on the ground (seeder, plough, harrow, etc.). The coupling cannot be used independently.
5. Special-purpose machinery is a motorized vehicle which moves on wheels or tracks and which has been adapted to perform a specific task or to perform a special-purpose function. The special-purpose machinery can have been converted from a truck. Together with the machine, all devices and objects necessary for the performance of special work or the performance of a work assignment permanently installed on it are also insured, unless otherwise agreed in the insurance contract.
6. Device is equipment adapted for a special task or facilitating the work (e.g. generator, soil compactor, laser meter, etc.). The device can be mounted on a trailer or truck.
Insurance coverage
An insured event is an unexpected and unforeseen event set forth in these terms and conditions, upon the occurrence of which the insurer has an obligation to perform the insurance contract. If it is not possible to determine the exact time of the insured event, it shall be considered to be the time when the policyholder or an equivalent person should have learned of the insured event.
Damage caused by the following is indemnified:
1. fire and explosion. A fire is the spread of open flame (including damage caused by smoke, soot and fire fighting efforts). An explosion is an instantaneous force generated by the expansion of gases or vapours or an explosion of an explosive device;
2. storm or a tree or other object that has fallen on the machine due to a storm. A storm is defined as wind with an average speed or gusts of at least 18 metres per second. The occurrence of a storm must be generally reported, it must be possible to determine the wind speed on the basis of observations from the nearest meteorological station and/or there must be damage characteristic of the storm at the scene of the incident;
3. theft or TWOC (taking without the owner’s consent) of the machine or part thereof, taking of the machine or part thereof in a robbery, or attempt at same, if at the time of the occurrence of the insured event, the machine was secured in accordance with the conditions and/or safety requirements provided for in the contract;
4. wrongful acts of a third party (vandalism) aimed at damaging or destroying the machine or its part;
5. road accident, including when transporting the machinery on a motor vehicle or trailer, towing the machinery behind another motor vehicle or machine, hauling behind or pushing in front, as well as damage to the cab windscreen or side or rear window due to a stone or other object on the road.
  A traffic accident is a case in which damage has occurred as a result of the movement of at least one vehicle or machine on a road, or as a result of going off-road.
  Road is a facility open to pedestrians or vehicles or another area designated for traffic by a landowner;
6. damage during loading or unloading if its purpose was to tow the machine on a motor vehicle or trailer. Loading or unloading means immediately lifting the machine or moving it on and off the trailer or motor vehicle under its own power;
7. collision with obstacle or stationary object;
8. collision with moving or stationary mobile machinery or any other motor vehicle.
Additional coverage
If the policy specifies, the insurance cover also extends to the following situations or services:
1. overturning or tipping (e.g. in a field, other terrain, forest, etc.);
2. sinking into the ground or becoming trapped (e.g. in a field, other terrain, forest, etc.) and/or damage to the machine when pulling it out and returning it on the road. If the engine, transmission, suspension or any other part of the machine that has sunk into or trapped in the ground is overloaded (greater load than allowed by manufacturer, excessive load overload, overheating, etc.) compared to the instructions for use of the machine, such damage shall not be compensated;
3. falling into a ditch or trench (e.g. on a construction site or similar) and/or damage to the machine caused upon extraction;
4. object falls on to the machine when hoisting or digging, damage from a tree or other object falling on the machine, damage to the windscreen, side or rear window of the machine cab when lifting, digging, or felling a tree;
5. other unexpected and unforeseen events that are not excluded under these terms and conditions;
6. breakage of tractor and mobile machinery components and damage to the electrical system under the following conditions:
  1. the engine, transmission, suspension or other part was damaged by mechanical force or centrifugal force (including of it causes damage to other parts of the machinery referred to above);
  2. any kind of short circuit between different-voltage parts of the electrical system of the tractor and the non-road mobile machinery caused damage to the electrical system or to another component;
  3. the tractor or mobile machinery has been used for its intended purpose and was not overloaded before or at the time of the incident;
  4. all maintenance service on the tractor or mobile machinery has been performed in a timely manner by a competent person and the maintenance has been certified.
  5. the coverage only applies if the tractor or mobile machinery is insured (does not apply in the event of insurance on a trailer or coupling device, and any other device or machinery).
7. replacement machine rental cost The policyholder shall be reimbursed for the rental cost of a replacement machine if the tractor and/or mobile machine damaged as a result of the insured event can be restored (according to clause 10.5 of these terms and conditions) and cannot be used during restoration, under the following conditions:
  1. Rental cost is the local average rental price or the comparable minimum cost of renting a machine for the same use. Substantiated rental costs are compensated on the basis of the contract and/or cost document (invoice, etc.) between the registration of the insured event and the restoration of the damaged machine or until the indemnification decision is made.
  2. The amount of the indemnity for rental costs per insured event is limited to the amount of the rental expense for a maximum of 15 days, not to exceed 3,000 euros.
  3. The following are not reimbursed as replacement machine rental costs:
    1. the cost of transporting the replacement machinery (including loading and unloading) from the lessor's location to the work site and back, and other costs related to the use (fuel consumption, etc.);
    2. in the event of damage to the trailer or coupling device, special-purpose machinery or any other insured object;
    3. losses caused by damage, destruction or loss of the replacement machine, regardless of the event and cause;
    4. rental costs in the event of total loss or theft of the machine, or the taking of the machine in a robbery, as well as in the event of glass damage (if only the windscreen and/or side windows of the machine cab are damaged).
Exclusions
Claims directly or indirectly caused by the following events, causes or consequences are not compensated:
1. non-compliance of the engine, transmission, suspension, part, system (electrical, steering, braking, ventilation, cooling, supply, exhaust, hydraulic, etc.) or any other component with the requirements for the technical condition of the machinery and its equipment, and resulting damage, fault, failure or malfunction .
  If a fault, the system failure or malfunction causes an insured event (e.g. fire, traffic accident, etc.), such damage is subject to indemnification. The indemnity does not cover damage and expenses to the extent that the policyholder should have incurred in order to bring the machine or component thereof into conformity;
2. damage caused by cracking and breakage due to mechanical fatigue and natural wear of the material or object;
3. damage caused by an explosion in an engine, pressure vessel or the like; freezing, insufficiency and leakage of oil, coolant or other liquid; inadequate lubrication or insufficient lubricant; poor quality or incorrect fuel, oil and other liquid or its use;
4. damage caused by exceeding the manufacturer-prescribed and/or permitted limit and overloading, regardless of the event or cause;
5. damage caused by improper or incorrect use of the machine or its use in unusual conditions;
6. damage caused to machinery working underground or component thereof regardless of the incident and cause (including part of the machinery becoming trapped underground and expenses for bringing the component to the surface or abandonment thereof, etc.);
7. damage to or destruction of the machine on aircraft, watercraft and floating equipment (raft, pontoon, etc.). Also, damage caused by the capsize of floating craft (including sinking of the machine – i.e., to the bottom of a body of water);
8. damage caused by the use of a motor vehicle or trailer unsuitable for towing or transport or by unsuitable fastening of the machinery when being towed on a motor vehicle or trailer;
9. damage caused by the removal of machine from the control of its owner or legal possessor through fraud, expropriation or extortion; and also damage caused to the machinery at the time when the machinery was unlawfully removed from the possession of the owner or legal possessor where the police were not duly informed of same;
10. damage caused by long-term processes such as corrosion, formation of particles and deposits, lime scale, exposure to chemical compounds and substances, excessive moisture, etc.
11. scratches, dents, nicks or other damage which does not directly affect the normal operation of the machinery;
12. damage solely to the tire or track, if is not accompanied by an insured event. If the breakage of a tire or track causes an insured event (e.g. going off road, etc.), such damage is subject to indemnification;
13. damage for which the manufacturer, seller, installer, maintenance provider, lessor or lessee of the machinery is liable under contract or law;
14. damage that becomes evident during the maintenance, inspection or return of the rented machine to the lessor; as well as the cost of regular maintenance and the cost of the part to be replaced during the maintenance;
15. software bug, fault, failure or malfunction. If a bug, fault, failure or malfunction causes an insured event (e.g. fire, traffic accident, etc.), such damage is subject to indemnification. Expenses related to the restoration and replacement of software are not indemnified;
16. damage and expenses resulting from any changes or additions to the restoration, replacement or repurchase of the machine or its part compared to the situation if the insured event had not occurred;
17. costs of expedited delivery of a machine component upon its replacement, overtime fees (including upon salvage and restoration of the machine); increase in the cost of materials, spare parts, labour or the like, etc.;
18. monetary claims that do not qualify as direct property damage, such as a third party claim, income forgone, fine, interest, default interest, etc.;
19. damage and costs directly or indirectly caused by:
  1. use of nuclear energy for any purpose or such nuclear energy becoming uncontrolled;
  2. solar flare, radioactivity and radioactive contamination or other similar cause;
  3. war, civil war, any act of war, armed conflict, invasion, popular unrest, coup d'état, lockout, strike, state of emergency, forcible expropriation, terrorism or any other similar cause;
  4. an outbreak, epidemic or pandemic of an infectious disease, as well as measures taken to prevent an outbreak, epidemic or pandemic of an infectious disease (including established restrictions);
  5. declaration of a state of emergency or similar state;
  6. cyber incident;
  7. earthquake.
Sum insured and insurable value
The insurable value is the market value of the machine at the time of the insured event. The market value is the average sale price of the machine in Estonia or the cost of acquiring a machine with equivalent technical parameters and age at the time of the insured event.
1. The market value is the average sale price of the machine in Estonia or the cost of acquiring a machine with equivalent technical parameters and age at the time of the insured event.
2. The sum insured is the maximum payout per insured event. The sum insured does not decrease by the indemnity paid out.
3. If the ratio of the sum insured to the insurable value is less than 10%, then underinsurance is not applied.
Deductible
Deductible (excess) is the part, agreed in the insurance contract, that is not indemnified by LHV. The deductible can be either a percentage of the amount of loss or a fixed monetary amount under the following conditions:
1. if more than two insured events occur in one insurance period, double deductible shall be applied starting from the third insured event;
2. if the deductible for theft is indicated in the policy as a percentage, the amount of the deductible shall be the corresponding percentage of the amount of damage, but not less than the primary deductible indicated in the policy;
3. damage caused as a result of different events is considered to be separate insured events and a separate deductible is applied for each insured event;
4. the policy may have several deductibles, which are applied together or separately depending on the conditions.
Territory
Is the area, specified in the policy, where the machine is to be operated (e.g. when moving from a storage site to work) or where the machine is used for work purposes (e.g. field, other terrain, construction site, quarry, etc.). Unless otherwise stated in the policy, the insurance cover is valid only in Estonia.
Insurance risk and significant circumstances affecting it
Insurance risk is the risk against which the machine is insured and which is affected by the following circumstances:
1. compliance or non-compliance with additional and special conditions and safety requirements set out in the policy and its annexes, including those concerning insurance risk;
2. change in the field of use and purpose of use;
3. changes in circumstances related to the machine's storage location and security at the storage location or security alarm system;
4. replacement of anti-theft alarm system and immobilizer, surveillance device or video surveillance system;
5. change of ownership and/or lease relationship;
6. change in the level of completeness, loss of key or registration document, etc.
Action to be taken in case of an insured event
In the event of an insured event, the policyholder must:
1. take immediate measures to prevent any increase in damage and reduce mitigate damage;
2. report the case to the police immediately – in case of theft, robbery or wrongful actions of third parties; to the Rescue Board – in the event of a fire or explosion of an explosive device; to the relevant competent authorities or persons – in other cases;
3. notify the insurer in writing of the incident, as soon as possible in person or through a representative, stating in the notification the time, circumstances and cause of the incident, as well as the expected amount of damage, witnesses, parties and culprits, and follow the insurer's further instructions;
4. if possible, keep the scene of the insurance event intact until the insurer inspects it;
5. the person to whose telephone the output of the burglar alarm or video surveillance system is directed must, in the event of an alarm signal being transmitted, take the measures described in the preceding clauses without delay;
6. provide, as soon as possible, a list of the machinery or parts thereof which were stolen, damaged or destroyed as a result of the incident;
7. allow the insurer to determine, through the claims adjustment process, the cause and amount of the damage caused as a result of the insured event;
8. submit the machine to the insurer for inspection, in the condition it was in after the incident;
9. not start restoration or disposal of the damaged or destroyed machine without the consent of the insurer;
10. in the event of theft, submit, together with the report, a document (contract, invoice, etc.) or lease agreement certifying the purchase and sale of the stolen machine; in the event of theft, also all parts of the registration certificate (if the machine is registered) and all sets of keys; in case of robbery, all keys and registration documents remaining in the possession of the policyholder;
11. provide the insurer with other information (e.g. video surveillance system and recordings made by the surveillance device, etc.).
General principles of indemnification
In the case of an insured event, LHV shall indemnify the direct and justified costs of restoration or replacement of the insured object and other expenses provided in the insurance contract either as monetary compensation or by restoring the insured object to its pre-insured-event condition or replacing the damaged object with an equivalent one, based on the following:
1. The method of compensation shall be decided by LHV;
2. The insurance benefits are determined by subtracting the deductible, unpaid insurance premiums that have become collectible, indemnity reductions and the proportion of taxes refunded on the basis of law (e.g. VAT) from the amount to be indemnified;
3. If the machinery is a total loss or was stolen, LHV has the right to reduce the insurance indemnity to be paid by the amount in insurance premiums payable paid by the end of the current insurance period and not paid by the time of the indemnity decision, regardless of whether the insurance premium payment date has come due and whom the insurance indemnity is paid to.
4. Other costs include:
  1. necessary and justified expenses incurred in order to prevent or reduce the damage, which the policyholder considered necessary to bear pursuant to the circumstances;
  2. necessary and justified machinery salvage and transport costs. The cost of salvage is the cost of lifting a damaged and overturned machine, extricating a machine that has sunk into the ground, returning to the road a machine that has gone off-road, as well as the cost of cleaning. The transport cost is the cost of transporting the damaged machine to the nearest repair shop and back. The costs of salvaging and transporting the machine shall be compensated up to 10% of the sum insured, but not more than 5,000 euros.
5. If it is possible to restore the damaged machine and it is economically feasible to restore it, the justified costs of restoration and/or replacement shall be compensated:
  1. costs of dismantling and restoring the damaged part (cost of works and auxiliary materials) and reassembly;
  2. the cost of replacing the damaged part, including transport and assembly costs. Compensation of replacement costs takes into account the age, technical condition, degree of wear and completeness of the part to be replaced. If a part with an age-appropriate degree of wear cannot be repurchased, the cost of the new part will be reimbursed (the maximum is the cost of the original part at the level of completeness specified by the manufacturer).
6. If the machine has been destroyed or damaged to such an extent that it cannot be restored or if restoration is not economically feasible, as well as in case of theft or robbery, the market value of the machine shall be indemnified at the time of the insured event. The market value shall be determined based on the year of construction of the machine, the number of operating hours, technical condition, degree of wear, completeness, etc. The extent of indemnification and the economic expediency of restoration shall be determined by the insurer.
7. If no more than one year has passed since the first sale of the machine and the machine has had only one owner or responsible user since then and the initial sale price of the machine has been proven, damage caused by the insured event shall be indemnified up to the original sale price of the machine.
8. Ownership of the indemnified machine, its remnants or part thereof shall be transferred to the insurer. If the policyholder wishes to retain ownership of the machine or part thereof damaged due to the insured event or does not transfer it to the insurer, the insurance indemnity shall be reduced by the post-insured-event value of the asset.
9. If the insured event occurs outside Estonia, the policyholder is obliged to hand over the damaged or destroyed machine or part thereof to the insurer in Estonia. The insurer shall not indemnify the costs of transporting the damaged or destroyed machine, its remnants or part thereof to Estonia.
Safety requirements
The following safety requirements must be met when using the insured object:
1. The machine may only be operated by an authorized person who has the right to work with the machine and has the relevant training.
2. The user of the machine is obliged to comply with all safety requirements arising from the operating instructions for the machine, current legal acts, rules, guidelines, etc., as well as the requirements set by the machine manufacturer and the requirements applicable to the machine's technical condition and equipment.
3. It is forbidden to use the machine for work for which it is not intended, as well as for work that does not meet the requirements applicable to the machine's technical condition and equipment (including work under a load higher than the manufacturer-specified limit, lifting an object heavier than the permitted hoisting power, etc.).
4. The machine must be maintained in accordance with its operating instructions and the manufacturer's requirements. All scheduled maintenance must be performed at the right time. Scheduled maintenance must not be waived. The machine may be serviced (only) by a competent person or company. Maintenance must be documented. The document certifying the maintenance must be kept in a form that can be reproduced.
5. The working condition and technical status of the machine must be inspected regularly. Machinery parts, components, fluids and substances with a short service life and/or a high degree of wear must be replaced if they:
  1. are worn, broken or damaged;
  2. need to be replaced according to the manufacturer's requirements and instructions or the machine's user manual.
6. The machinery must be fitted with the primary fire extinguishers required by current legal acts. Primary fire extinguishers must meet the requirements of current legal acts and be in working order at all times. The condition of the primary fire extinguishers must be checked regularly.
7. When performing maintenance and repair of the machine, the area (e.g., garage) in which said procedures take place must have primary fire extinguishers. The selection, placement, marking and maintenance of primary fire extinguishers must comply with current legal acts, regulations, instructions, etc.
8. If a fire extinguishing system is installed in the engine compartment of the machinery, it must always be in working order and properly maintained.
9. If it is necessary to use roads to move the machine from one place to another or when hauling or towing it, the applicable legal acts, regulations, instructions, etc. must be observed.
10. While it is not in use, the machine must be kept either in a building with closed and locked doors and windows and a security alarm system, or in a guarded area.
11. Guarding and security mean the following conditions, which must be applied together or separately, as specified in the insurance contract:
12. manned surveillance (a guard) 24 hours a day or outside working hours in the building or area where the machine is stored;
13. a security alarm system on the premises of the building where the machinery is stored or a perimeter alarm system on the fencing around the area where the machinery is stored. The alarm system must be installed such that the machine is located within the operating range of the system's sensors. The alarm system must have an output either to the security company or to the security desk in a constantly guarded place or to the telephone numbers of at least two (2) persons;
14. a video surveillance system in the building where the machinery is stored or on the territory of the storage location. A video surveillance system is a complete system consisting of control device (s), sensor (s) and other devices, which must be able to monitor the machine and its surroundings, react to movements and record information. The alarm system must be installed such that the machine is located within the operating range of the system's sensors. If the system is also activated in the event of movement, the system must have an output either to the security company or to the control panel in a place with constant security or to the telephone of at least two (2) persons;
15. an anti-theft alarm system installed on the machine. An alarm system is an integral system consisting of a control, switch(es), sensor(s), siren, remote control, battery and other devices which must respond to the opening of a machine door, window, engine hood or any other opening. The activation of the system must be detectable (siren sound and flashing lights). The battery of the system must be autonomous and allow the transmission of an alarm even when the battery cable is cut;
16. an immobilizer installed on the machinery to prevent its engine from being started. An immobilizer is an integral system of devices which must ensure that the engine does not start. This is done through interrupting the electrical circuit and/or preventing fuel injection;
17. a tracking system installed on the machine to point its location. The tracking system is an integral system consisting of a control unit, a transmitter and other devices that allow the location of the machine to be detected by satellite or other technology. The tracking system must always be in working order.
18. The person or possessor authorized to use the machinery must, each time they leave the machinery:
  1. close and lock all its doors, windows and other openings and hatches;
  2. take with them the registration documents of the machine and all keys (incurring mechanical and/or electronic keys, control panels, etc.);
  3. keep the registration documents and keys of the machinery in a secure manner and in a place inaccessible to third parties;
  4. activate the anti-theft alarm system installed on the machine (if the respective system is specified and required in the insurance contract).The alarm system must always be in working order;
  5. activate the immobilizer installed on the machine. The immobilizer must always be in working order (if an immobilizer is specified and required in the insurance contract);
  6. activate the tracking system installed on the machinery or check that it is activated (if the respective system is specified and required in the insurance contract).
19. The person or possessor authorized to use the machinery must, each time they leave the machinery:
  1. close and lock all its entrances and exits (doors, windows, hatches, etc.);
  2. arm the security alarm system of the building and/or the perimeter alarm system of the facility (if the respective system is specified and required in the policy).Make sure that the operating range and sensitivity of the system sensor(s) are not limited or reduced in any way. The alarm system must always be in working order;
  3. activate the video surveillance system installed on the machinery or check that it is activated (if the respective system is specified and required in the insurance contract). Make sure that the operating range and sensitivity of the sensor and cameras are not limited or reduced in any way. Also make sure that the system battery or batteries are sufficiently charged and that information is being saved. The video surveillance system must always be in working order;
  4. keep the fire alarm system installed in the building operational 24 hours a day (if the respective system is required by legal acts). The fire alarm system must always be in working order;
20. During the rest breaks and lunch breaks within the working day, reasonable supervision of the machinery must be ensured so as not to leave the machinery unattended for long periods. If a person or possessor authorized to use the machine leaves the machine during a break, the person must follow clause 11.18 of the ventilation requirements.
21. Additional instructions related to machinery security and specified in clause 12.12 shall be established in the insurance contract. The insurer has the right also to apply other safety requirements in regard to the machine.
Obligations of the policyholder
The policyholder is obliged to:
1. pay insurance premiums in the agreed amount and according to the agreed procedure;
2. notify LHV of an insured event immediately, but not later than within five days after the occurrence of the insured event or becoming aware of the event;
3. provide LHV with complete and correct information for the assessment of insurance risk and, upon concluding the insurance contract, notify LHV of all significant circumstances known to it that affect or may affect the decision to enter into the insurance contract on the agreed terms, inter alia to notify LHV of the proper area of use of the insured object (machine);
4. notify LHV as soon as possible if any of the information submitted to LHV turns out to be false or incomplete;
5. explain the obligations arising from the insurance contract to the person into whose possession or use the policyholder assigns the insured machine;
6. notify LHV before concluding the insurance contract or during the term of the insurance contract, if the policyholder or a person equivalent to him or her is shown as listed or becomes listed as a person subject to international financial sanctions;
7. enable LHV's representative to examine the condition and documents of the insured machinery;
8. install and, if necessary, secure loads in such a way that the load does not break free or move during normal operation (including sudden braking, sudden turn);
9. notify LHV as soon as possible of a possible increase in the insurance risk;
10. do everything in its power to prevent an insured event and reduce possible damage, to avoid the possible increase of the insured risk and not to allow the persons who use the machinery to increase the insured risk;
11. enable LHV to investigate the circumstances of the insured event in order to identify the amount of the loss and the persons responsible for the loss and, if necessary, to involve experts in establishing the circumstances of the insured event;
12. comply with any additional instructions given by LHV to reduce the insurance risk;
13. if machinery that is stolen (including in a robbery) is returned after LHV paid the insurance indemnity for it, return to LHV the insurance indemnity paid for the machinery or hand over the returned machinery to LHV.
Obligations of LHV
LHV is obliged to:
1. introduce the documents related to the insurance contract to the policyholder before concluding the insurance contract and keep secret the information which has become known to LHV in connection with the insurance contract;
2. issue to the policyholder a replacement policy, as well as copies of the policyholder's statements of intent submitted in a form that can be reproduced in writing, and data and copies of documents that affect the policyholder's rights or obligations arising from the insurance contract, if such activities are not in conflict with legal acts;
3. examine the claim submitted by the policyholder and the claim documents;
4. inspect the damaged machinery or arrange for it to be inspected as soon as possible, but not later than within five working days of the receipt of the notice of loss;
5. make a decision to indemnify or refuse to do so within ten working days of receiving the information necessary to clarify the circumstances of the insured event and its extent. In the case of theft, TWOC of the machinery or theft of the machinery in a robbery, LHV has the right to postpone the decision until the receipt of the decision on closing or ending the criminal case opened concerning the incident or the culprit is formally accused;
6. after receiving a notice of loss, to inform the policyholder which documents must be submitted to LHV in order to determine the cause and amount of the loss;
7. indemnify the damage caused due to the insured event or pay the agreed monetary amount or the insurance indemnity in one instalment or in parts, or perform the insurance contract in another agreed manner. LHV must pay the insurance indemnity within a reasonable term after the completion of the claims adjustment operations and the indemnification decision. If LHV delays the performance of a monetary obligation, it is obliged to pay late interest at the rate provided in the Law of Obligations Act;
8. refuse to pay the insurance indemnity if the payee is subject to a corresponding restrictive international financial sanction established on the basis of UN resolutions or corresponding legal acts of the European Union or the Republic of Estonia.
Rights of LHV
LHV has the right to submit additional requirements in order to reduce the insurance risk. Additional requirements become part of the insurance contract, unless the policyholder submits an application for withdrawal from the insurance contract within ten working days after receipt of the respective requirements.
During the insurance period, LHV has the right to inspect the machinery and, in the event of increased insurance risk, demand that the policyholder implement additional security measures and/or increase the insurance premium.
In the event of an increase in the insurance risk, LHV has the right to demand from the policyholder the difference between the insurance premium to be paid on the basis of the actual insurance risk and that specified in the policy.
If the insurance contract is entered into for a period longer than one year, LHV has the right to change the terms and/or the insurance premium, but not in regard to the first one-year insurance period of the insurance contract.
LHV has the right to refuse to pay the insurance indemnity if the payee is subject to the relevant international financial sanction established by the Office of Foreign Assets Control (OFAC) under the relevant legislation of the United States of America or the relevant legislation of HM Treasury United Kingdom.
Exemption from performance of insurance contract
LHV has the right to deny or reduce the indemnity if:
1. the policyholder has intentionally submitted false data or misleading information to LHV or failed to submit significant information concerning the material circumstances of the insurance contract or insured event;
2. the policyholder has intentionally or due to gross negligence breached at least one obligation agreed in the insurance contract and this has an effect on the occurrence or amount or determination of the extent of the loss;
3. the policyholder has violated the obligation to notify of changes in significant risk circumstances;
4. the person who operated the machinery left the scene of the insured event, failing to register it correctly in accordance with clause 9.2 of the Terms and Conditions;
5. the policyholder caused the damage intentionally;
6. the policyholder used the machinery to abet the commission of a crime or attempted crime;
7. the policyholder has not paid the insurance premium by the prescribed deadline or by an additional deadline and the insured event occurs after the expiry of the additional deadline, unless the failure to make the payment was due to a circumstance beyond the control of the policyholder;
8. the event is one where resulting damage is not compensated on the basis of the Terms and Conditions.
Refund of indemnity
The policyholder and/or the beneficiary is obliged to return the insurance indemnity to LHV as soon as possible if:
1. circumstances that exclude compensation emerge after the compensation of damage or if the damage has been compensated by a third party;
2. the policyholder or beneficiary regains possession of a stolen machine or machine taken in a robbery. LHV must be notified immediately, and if LHV has already indemnified the value of the insured object, the insurance indemnity paid must be returned to LHV or the possession and right of ownership of the returned machinery must be returned to LHV.
Expiry of the insurance contract
The insurance contract shall expire:
1. at the end of the insurance period;
2. upon cancellation of the insurance contract;
3. upon withdrawal from the insurance contract;
4. by agreement between the policyholder and LHV;
5. on other grounds provided for by legal acts.
Cancellation of the insurance contract
LHV has the right to cancel the insurance contract in accordance with the cancellation terms prescribed by legal acts, if:
1. the policyholder has failed to perform the insurance contract, among other things, not paying the insurance premium by the deadline or additional deadline;
2. the policyholder has intentionally submitted false information to LHV regarding the circumstances of the insurance contract and/or the insured event;
3. an insured event has occurred and LHV has made a decision on indemnification or refusal to indemnify the damage;
4. the insurance risk has increased (including if the insurance risk has increased independently of the policyholder and the policyholder does not agree to amend the insurance contract retroactively starting from the increase of the insurance risk);
5. the insured object has been transferred;
6. other grounds for cancellation of the insurance contract provided by legislation become apparent.
The parties have the right to cancel an indefinite-period insurance contract under ordinary procedure by the end of the current insurance period, giving at least 30 days' notice.
Withdrawal from the insurance contract
LHV has the right to withdraw from the insurance contract if upon entering into the insurance contract, the policyholder failed to notify LHV of significant circumstances affecting the insurance risk and/or has knowingly submitted false information (including deliberately avoiding reporting a material circumstance). LHV may withdraw from the insurance contract within one month after LHV became aware or should have become aware of the policyholder's failure to perform the notification obligation.
If the policyholder has not paid the first insurance premium within 14 days after concluding the insurance contract, LHV may withdraw from the insurance contract until the payment is made. If the paid insurance premium (including an instalment thereof) is less than the amount payable specified in the policy, the insurance premium shall be deemed not to have been paid. LHV shall be presumed to have withdrawn from the insurance contract if it does not file an action for the collection of the insurance premium within three months as of the premium becoming collectible.
If the insurance contract is entered into through telecommunications, the policyholder has the right to withdraw from the insurance contract within 14 days as of the conclusion of the insurance contract. The policyholder must submit a written application to LHV regarding the withdrawal in a form that can be reproduced in writing. Upon withdrawal, LHV will return the paid insurance premium. If LHV has provided the policyholder with immediate insurance coverage, the policyholder has no right of withdrawal.
If the insurance contract is entered into for longer than one year, the policyholder has the right to withdraw from the insurance contract within 14 days as of the conclusion of the insurance contract. The policyholder must submit a written application to LHV regarding the withdrawal in a form that can be reproduced in writing. Upon withdrawal, LHV will return the paid insurance premium. If LHV has provided the policyholder with immediate insurance coverage, the policyholder has no right of withdrawal.
If the insurance contract has been cancelled or a party has withdrawn from it, the parties to the insurance contract shall no longer be bound by the obligations arising from the contract as of the termination of the insurance contract. The rights and obligations of the parties, including the policyholder's obligation to pay insurance premiums to LHV, remain valid until the termination of the insurance contract.
Communication
All notices necessary for the performance of the insurance contract shall be submitted in a form that can be reproduced in writing.
Processing of personal data
LHV is entitled to process personal data related to the insurance contract on the basis of LHV's Principles of Processing Client Data and to disclose information related to the insurance contract to a third party whose right to receive information arises from LHV's Principles of Processing Client Data.
LHV has the right to preserve recordings obtained by telecommunication or other means in connection with the performance of the insurance contract and, if necessary, use them to prove the declarations of intent submitted by the policyholder.
Expiry of claims arising from insurance contract
The limitation period for claims arising from the insurance contract is three years. The limitation period shall run from the end of the calendar year in which the claim becomes collectible.
Conflicts in the insurance contract documents
If there are any inconsistencies in the documents of the insurance contract, the interpretation shall be based on the presumption that the special terms and conditions of the insurance contract specified in the policy take precedence over the general terms and conditions.
If the terms and conditions have been translated into a foreign language, their interpretation shall, in case of a dispute, always be guided by the Estonian-language terms and conditions.

Machinery Insurance Conditions

The Terms and Conditions of Machinery Insurance describe the extent of insurance protection, action to be taken in the case of an insured event and principles for indemnification.

Contact details of the Insurance Provider

Insured object

Insurance coverage

Additional coverage

Exclusions

Sum insured and insurable value

Deductible

Territory

Insurance risk and significant circumstances affecting it

Action to be taken in case of an insured event

General principles of indemnification

Safety requirements

Obligations of the policyholder

Obligations of LHV

Rights of LHV

Exemption from performance of insurance contract

Refund of indemnity

Expiry of the insurance contract

Cancellation of the insurance contract

Withdrawal from the insurance contract

Communication

Processing of personal data

Expiry of claims arising from insurance contract

Conflicts in the insurance contract documents

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