Output Replacement Clause

OUTPUT REPLACEMENT CLAUSE #

If the interest insured under the Policy constitute property which has a measurable output and which is capable of replacement with a new item or items which perform a similar function then such property shall be valued for insurance purposes as follows, and values for the settlement of any loss destruction or damage in respect thereof shall be on the same basis.

If any damaged property insured is to be replaced by an item or items which have the same or lesser total output, then the insurable value thereof is the new installed cost of

such replacement item or items as would give the same total output as the damaged property ;

If any damaged property insured is to be replaced by an item or items which have a greater total output and the replacement value is no greater than the value insured of the property damaged then no deduction shall be made from any claim due to improved output ;

If any damaged property insured is to be replaced by an item or items which have a greater total output and the replacement value is greater than the value insured of the damaged property then the insurable value thereof is that proportion of the new installated cost of the replacement item or items as the output of the damaged property bears to the output of the replacement item or items. The difference between the insurable value as defined and the new installed cost of the replacement item or items shall be borne by the Insured ;

Provided that in any event where any damaged property is to be repaired the Insurer(s) shall pay the cost of restoration of such damaged property to a condition substantially the same as, but not better or more extensive than, its condition when new and provided further that the liability of the Insurer(s) shall not exceed the sum repsenting the cost which the Insurer(s) could have been called upon to pay if such property insured had been wholly destroyed.