Normal Wear and Tear
Gradual deterioration or atmospheric conditions.
EFI Policy
In 2026, Electronic Equipment Insurance (EEI) in India is a comprehensive “All-Risk” policy specifically designed to protect sophisticated, low-voltage electronic systems against sudden and unforeseen physical damage.
Electronic Equipment Insurance
Core Structure of EEI Policies
Standard EEI policies are typically divided into three distinct sections:
Section I: Material Damage
Covers the physical equipment (hardware) including CPUs, monitors, UPS, and built-in system software against fire, theft, and accidental breakdown.
1
Section II: External Data Media
Covers the cost of restoring data on external media (hard drives, tapes, discs) if they are physically damaged by a covered peril, provided a backup system exists.
2
Section III: Increased Cost of Working (ICOW)
Reimburses additional expenses, such as renting substitute equipment or hiring extra staff, to maintain operations following a claim in Section I.
3
Key Inclusions
The policy protects against a wide range of perils, including:
Accidental Damage
Human errors like dropping equipment, faulty manipulation, or lack of skill.
Electrical/Mechanical Breakdown
Damage due to short circuits, over-voltage, or mechanical failure.
Natural Calamities
Fire, lightning, flood, earthquake, and landslides.
Social Perils
Theft, burglary, riots, strikes, and malicious damage.
Major Exclusions
Claims are typically denied for:
Pre-existing Defects
Faults known to the insured at the time of policy commencement.
Willful Negligence
Gross negligence or intentional destruction by the insured.
Consumables
Parts with limited life like bulbs, ribbons, and fuses.
Aesthetic Defects
Surface-level damage like scratches or dents that do not affect functionality.
Key Policy Requirements for 2026
Important conditions to consider before purchasing an EEI Policy.
01
Sum Insured: Must reflect the New Replacement Value (current market price for a similar new model) including installation, duties, and freight.
02
Maintenance Agreement: Many insurers require a Preventative Maintenance Agreement to be in place during the policy term, particularly for equipment valued over ₹1 Lakh.
03
Portable Devices: Traditional EEI often excludes portable items like laptops or smartphones; these usually require a separate Portable Electronic Equipment Policy.