In the Munich-Re standard PAR/IAR of policy wording, Act of God is not stated as an exception. Then all kind of Act of God actually covered under this policy. In example, when flood happened which resulting at damage on stock-in-trade (including stock stored in the open area), the insured can propose compensation to the insurer. One of the few exclusions concerning with accidental events is “pollution” which described at Special Exclusions to Section I (One) Point 2.6 : “The insurer(s) shall not be liable for loss destruction of or damage to the property insured directly or indirectly caused by or arising out of or aggravated by pollution or contamination, unless caused by fire, lighting, explosion, aircraft or other aerial devices or articles dropped therefrom, riot, civil commotion, strikers, locked-out workers, persons taking part in labour disturbances, malicious persons (other than thieves), earthquake, storm, flood, escape of water from any tank apparatus or pipe or impact by any road vehicle or animal.” Also at point 2.9, it is stated that the change of temperature or humidity (as a natural process) is excluded at PAR/IAR policy.

With this fact, the carelessness of underwriters in attaching TFSWD (Tempest-Flood-Storm-Water Damage) Endorsement would not be happened if this clause was used in proper place, like used in fire policy as extended clause. As we know that the PSAKI (Indonesian Standard Fire Insurance Policy) generally excludes catasthropic risk like Act of God (see on Chapter II The Exclusion of PSAKI). But while this clause is used as an additional clause in PAR/IAR wording, the coverage actually is not wider than standard cover, but on the contrary, restrict the cover. We can see at the TFSWD Endorsement at Point 2 as follows :

“This extension does notcover loss or damage to :

a) Stock and/or other movable items stored in the open.

b) Property and/or interest insured directly or indirectly caused by :

i) Erosion, Subsidence, Landslide, Volcanic Eruption, Earthquake or Tsunami.

ii) Seepage.

iii) Water discharged from sprinklers, drenchers or hydrant installations in the building/insured premises.

c) Business interruption or any kind of consequential loss."

Thereby, when the insurer meet the insured who need to insure any properties from Act of God risks (under PAR/IAR policy), it not need to attach the TFSWD Endorsement. However, in Indonesia market, the earthquake risk must be excluded from PAR/IAR policy and distribute to the Earthquake Consortium (in this matter to MAI PARK). If the underwriters attach this clause, it mean that he want to restrict Act of God risks under Par/IAR policy. So, don’t make a mistake that can leave a serious conflict between the insured and the insurer when claim arises.