In Asia, it is common to see Material Damage Proviso Waiver Clause in a Business Interruption Insurance policy. However, the wording of this clause always confuses readers.
Clause Wording – Material Damage Proviso Waiver
MATERIAL DAMAGE PROVISO WAIVER CLAUSE
It shall not be a condition precedent to liability in respect of interruption or interference in consequence of destruction or damage (as within defined) that payment shall have been made or liability admitted under the insurance covering the interest of the insured in the property at the premises against such destruction or damage if no such payment shall have been made nor liability admitted solely owing to the operation of a approves in such insurance excluding liability for losses below specified amount.
What does that mean? – Material Damage Proviso Waiver
The Material Damage Proviso Waiver Clause means that the insurance company will not require the insured party to prove that they have received payment or admitted liability for any interruptions or damages caused to their property before they can claim compensation.
In simpler terms, if the insured party’s property is destroyed or damaged, and their insurance policy covers such destruction or damage, they don’t have to wait for the insurance company to pay them or admit liability before they can make a claim for any interruptions or losses they may have suffered.
Example
For example, let’s say a business has a property insurance policy covering fire damage. If a fire breaks out and damages the insured property, the business doesn’t have to wait for the insurance company to pay them or admit liability for the fire damage before they can claim compensation for any interruptions or losses they may have experienced due to the fire. Even if the insurance policy has a clause that excludes liability for losses below a certain specified amount, the insured party can still make a claim for any losses exceeding that amount.
