OUTPUT REPLACEMENT CLAUSE – IAR

RISKS : IAR “Notwithstanding anything contained herein to the contrary, Property Insured under this policy has measurable output and which is capable or replacement with a new item or items which perform a similar function is valued for insurance purposes as follows and settlement of any loss, destruction or damage in respect thereof shall be on the same basis : a) If property lost, destroyed or damaged is to be replaced by any item(s) which has or have the same or a lesser total output, then the Insurable value thereof is the new installed cost of such replacement item or items as would give the same output as the property lost, destroyed or damaged. b) If the property with the same total output as the lost, destroyed or damaged property is not available within a reasonable time of the loss, destruction or damage then no deduction shall be made from any claim to allow for the improved output of the replacement property. In such circumstances this Policy will pay the installed cost of the replacement equipment including such extra cost required to ensure associated equipment is compatible and the operations of the Insured are restored. Provided that in the event of partial loss where property is to be repaired, this policy pay the cost of restoration of the property to a condition substantially the same as but not better or more extensive than its condition when new”