Does your Health Insurance in India cover Coronavirus?

The world is reeling under the widespread incidence of Coronavirus which, though has its origin in China, has spread world over. The disease is on the brink of being labelled as a pandemic as it has spread to many countries across the globe. What is causing panic among individuals is the fatal nature of the virus. More than 96,000 cases of Coronavirus have been reported as of 5th March 2020 and the recorded number of deaths so far has been more than 3300 (Source: Worldometers.info).

What is coronavirus?

Coronavirus is a type of virus which causes flu like illness in humans. It is named as such because of its shape which is round with crown-like protrusions around the circle. The symptoms range from cough, cold, fever and other symptoms which are like flu and so, diagnosis becomes a challenge.

What started out as a viral infection in China has now spread to Europe, Middle-East Asia, South America and even India. Though the cases in India are low, given the contagious nature of the virus, the spread can be quick and the numbers might increase manifold. You should, therefore, take extreme precautionary measures to ensure that you and your family members are not exposed to the virus. Here are a few do’s and don’ts to keep in mind –

Do’s 

  • Invest in masks and wear them at all places, even at your own home. Masks are the first step to take so that the virus does not enter in your blood stream through breathing
  • Wash your hands multiple times using soap or a hand wash. Washing would ensure that any germs sticking to your hand would be washed off.
  • Use an alcohol-based hand sanitizer every time you eat or drink. The sanitizer would kill the virus if it is present on your hands and keep you safe.
  • Maintain a distance of at least three feet with a person who is sneezing or who is suffering from flu-like symptoms
  • If you have cough or cold, always keep a paper tissue handy. Sneeze or cough by placing the tissue on your mouth and then dispose-off the tissue immediately
  •  If you have any type of flu-like symptoms like fever, cold, cough, etc., immediately get checked. You might or might not test positive for coronavirus but early detection helps in preventing the spread of the disease among others.

Don’ts

  • Do not eat outside food especially in places where proper hygiene is not maintained.
  • Do not attend large social gatherings as infected individuals present at such gatherings pose a threat to infect others
  • Do not touch your eyes, nose or mouth frequently. Even when you touch, wash your hands thoroughly with soap and then do so
  • Do not spit in public places
  • Do not make travel plans as many countries have been infected with the virus.

How health insurance can help?

Suspected coronavirus cases are quarantined for 12-14 days to incubate the virus. After incubation it can be found whether individuals have the virus or not. If an individual test positive it usually results in hospitalisation wherein the individual is kept isolated and then treated. This hospitalisation can be of a considerable period and incurs substantial expenses.

A regular health insurance plan can come to your rescue in such cases. In case you are hospitalized for Coronavirus, your regular Health Insurance Plan would pay for the expenses and the treatment for the same. The plan would pay for the inpatient hospitalisation costs incurred when you test positive and are hospitalised for care and treatment. It would pay for the following costs which are incurred on an inpatient basis –

  • Doctor’s Consultation fees
  • Room rent
  • ICU room rent if you are admitted to the ICU
  • Daily cash allowance
  • Pre-Hospitalization and Post-Hospitalization benefits

However, recently Coronavirus has been declared a pandemic by the World Health Organisation (WHO). Given the current status of the illness, coverage allowed by health insurance plans has come under a shadow. Some health insurance policies are offering coverage for the above-mentioned medical costs given that the incidence rate of the illness in India is low. However, other health insurance companies are exercising caution. Given the pandemic nature of the disease, coverage is being restricted. So, you should find out from your health insurance company whether or not your plan would cover Coronavirus claims or not.

A specialized health plan for Coronavirus

Though regular health insurance plans take care of the inpatient costs, Go Digit General Insurance Company has launched a specialized health insurance plan for fighting the financial implication of coronavirus. The plan is a fixed benefit health insurance plan which pays the full sum insured in lump sum if you are diagnosed positive for coronavirus. Moreover, even if you are quarantined before testing for the virus, 50% of the sum insured is paid in lump sum to help you meet the associated financial costs of such quarantine even if you are later tested negative. The sum insured ranges from INR 25,000 to INR 2 lakhs and the premium per person is very low at INR 299. The plan, therefore, helps you battle the financial crisis suffered in case of a coronavirus attack. You can check the details of the plan from the Turtlemint website.

Coronavirus is spreading havoc worldwide and necessitating the need to take preventive measures to stay protected. While you can practice proper hygiene and care to avoid contracting the virus, having a health insurance plan for contingencies is also a wise choice. So, invest in a health plan for emergencies and stay protected.

Renters Insurance in India

A home insurance policy is said to be important to protect against the financial loss suffered if the house is damaged due to any natural or man-made calamities. That is why homeowners invest in home insurance plans so that they can face financial loss if their property is damaged. But, what about tenants? Do they need any insurance cover?

Yes, they do. Though tenants live in rented properties, they still need insurance for the contents of the home. If they own the household contents, they would face a financial loss if the contents are lost, stolen or damaged. Alternatively, if the household contents also belong to the landlord, the tenant has the financial responsibility to ensure that the contents are not damaged due to use. If the contents are damaged or stolen, they might have to compensate the landlord for the damage or theft. That is why a renter’s insurance policy comes in handy. Let’s understand what the policy is and why it proves useful.

What is renter’s insurance?

A renter’s insurance policy is a policy which covers the loss or damage of the contents of the house in which a tenant lives. These policies are home insurance plans which cover only the contents of the home. They are called renter’s insurance because tenants usually buy a home insurance policy covering their household contents.

What is covered under renter’s insurance?

Coverage under a renter’s insurance policy can be subdivided into the following categories –

  1. Coverage for the contents of the home

    A renter’s insurance policy covers the contents of the home against the following risks –

    • Fire
    • Theft
    • Natural calamities
    • Man-made calamities
    • Electrical breakdowns
    • Accidental damages
  1. Coverage for financial liability

    Besides covering the contents of the home, renter’s insurance policy also covers the legal liability that the tenant faces if any individual is hurt in the tenant’s home. For instance, if another individual (who is not the tenant, his/her family or the landlord) suffers any injury when at the home of the tenant, the tenant might face the financial responsibility to pay the injured individual’s medical expenses. This legal liability is also covered under a renter’s insurance policy.

  1. Coverage for special assets

    Under this cover, special assets of the tenant are covered. These assets can be high-value assets like jewellery, expensive gadgets, works of art, curios, etc. These assets are covered against damage due to natural or man-made calamities and theft.

Add-ons under renter’s insurance

A renter’s insurance policy, besides providing the above-mentioned coverage, also has different types of add-ons which help in increasing the coverage of the plan. Some common extensions include the following –

  1. Rent for an alternate accommodation

    If you are unable to live in the rented house due to damages which are being repaired, the policy pays you the cost incurred on seeking alternate accommodation

  1. Coverage for portable electronics

    Portable electronics like laptops, portable gadgets, etc. get covered under this add-on.

  1. Jewellery and valuables cover

    Under this add-on, you can get coverage for your precious jewellery and other valuable items.

  1. Terrorism cover

    If the contents of the home are damaged due to any terrorist activity, the damages are covered under this add-on.

  1. Pedal cycle

    This add-on extends coverage to a pedal cycle that you own. If the cycle is damaged due to fire, accident, natural or man-made calamity, the add-on pays for the loss suffered.

What is not covered under renter’s insurance?

A renter’s insurance policy does not cover damages suffered due to the following instances –

  1. Wilful damage caused deliberately
  2. War, rebellion, mutiny and related perils
  3. Precious items are not covered unless otherwise specified
  4. Very old content which has lived its useful life is not covered
  5. Any type of consequential losses are not covered

Why is renter’s insurance required?

A renter’s insurance policy proves to be a useful cover for tenants because of the following reasons –

  1. The policy covers the financial loss which tenants face if their belongings are damaged due to any calamity
  2. If the house suffers any damage, the landlord would pay for the repairs of such damages but if the tenants lose their belongings, the financial loss is theirs alone. This loss is covered by renter’s insurance policy which gives tenants financial relief
  3. Since the renter’s insurance policy also covers third-party liability, it gives tenants a sense of financial security that if any individual is hurt in their rented apartment they would not have to bear any losses
  4. If you accidentally damage the landlord’s assets in the house, the policy would give you compensation for such damages too
  5. The add-ons available under the policy increase the scope of coverage and give additional financial protection
  6. The premiums are very low and you can easily buy renter’s insurance policy for your household contents

How much does renter’s insurance cost?

The premiums of a renter’s insurance policy depends on various factors. These are as follows –

  • The value of the contents to be insured affects the premium. If the value is high, the premiums would be high
  • The risks faced by the property based on its location, age, safety and security measures etc. have a direct impact on the premium. If the risk is perceived to be high, the premiums would be high
  • if add-ons are selected with the basic policy, the premiums would increase

Top #6 Things to remember when buying renter’s insurance

Before buying a renter’s insurance policy, the following things should be kept in mind –

  1. Ensure that all the contents are covered under the policy. If any content is left uninsured, you would have to bear the costs if such content is damaged or stolen
  2. The sum insured of the policy should be sufficient to cover the replacement cost of the contents which are damaged or stolen
  3. Choose the required add-ons if they suit your coverage requirements
  4. Always compare the available renter’s insurance policies before buying one. Comparing allows you to buy the plan which has the most inclusive coverage features at the most reasonable premium rates
  5. Keep the bills and other relevant documents of the content that are insured under the policy
  6. If you have precious jewellery and other valuable items in your possession, get them insured under the available add-ons as their loss would be the most expensive to bear

If you are a tenant and are living in a rented house you don’t have any responsibility in case the structure of the house faces any damage. However, if the contents are damaged or burgled, you tend to incur a financial loss as the contents belong to you. Therefore, insuring the contents of the home is a wise move and since the premiums are not very high you can easily buy renter’s insurance policy. So, invest in a comprehensive renter’s insurance plan and secure your household contents against possible damages.

Frequently Asked Questions:

  1. What is the difference between renter’s insurance and homeowners insurance?

    A homeowner’s insurance policy is a policy which is bought by individuals who own their homes. These policies are usually bought to cover the structure as well as the contents of the home. a renter’s insurance policy, on the other hand, is bought by tenants and the policy covers only the contents of the home.

  1. Who can buy renter’s insurance policy?

    A renter’s insurance policy can be bought by tenants who are living in rented accommodation.

  1. Can the coverage be increased if required?

    Yes, you can increase the coverage level under your renter’s insurance policy when the policy is up for renewal.

All you need to know about Transit Insurance in India

Businesses are going global and their goods are being sold in international markets too. This globalisation has not only increased the potential of business profits, but it has also led to better marketing opportunities and competitive products. While globalisation is driving business expansion, the risks associated with the transportation of goods cannot be ignored. When the goods are being transported through land, air or water, they face the threat of damages due to unforeseen contingencies. In case of any damage, businesses stand to lose a great deal of money. That is why, to protect the financial risks faced by goods being transported, a transit insurance policy is available. Let’s understand what this policy is all about –

What is transit insurance?

Transit insurance is an insurance plan which covers the risks faced by goods when they are being transported from one place to another. The policy covers being transported by air, water, road or rail.

What is covered under transit insurance?

Transit insurance coverage includes common perils which might cause damage to the goods which are being transported. These perils against which transit insurance protects the goods are as follows:

  • Earthquakes
  • Explosion 
  • Fire 
  • Lightning 
  • Any type of natural or man-made calamity
  • Overturning of the transport vessel
  • The collision of the vessel which damages the goods contained therein
  • The derailment of the vessel
  • The sinking of the vessel
  • Risks faced while loading and unloading the goods
  • Risks faced in packing and unpacking of goods
  • Accidental damages
  • Malicious damages
  • Impact damage
  • Theft, etc.

Who should invest in a transit insurance policy?

A transit insurance policy is suitable for businesses and individuals who are involved in regular transportation of goods. The policy can be bought by the following types of parties –

  • Manufacturers of goods
  • Importers and exporters of goods
  • Custom house agents
  • Traders
  • Transporters or aggregators

Types of transit insurance for goods

Transit insurance policies can be offered in multiple variants. These variants are as follows –

  1. Single transit policy

    This policy covers one particular journey and is suitable for businesses that do not transport their goods frequently. The policy would cover the goods which are being transported on a particular journey only.

  2. Customised policy

    This policy is a flexible transit insurance policy which can be customised for businesses to suit their coverage requirements.

  3. Open policy

    This policy covers multiple transits occurring within a given period of time which is, usually, one year. So, if businesses transport their goods frequently, they can buy this policy and ensure coverage for multiple trips without buying a different policy for each one.

  4. Overnight vehicles’ insurance policy

    If the goods are to be stored overnight in a vehicle, this policy is suitable as it covers the goods in such cases.

  5. Goods in transit (carrier’s) cover

    If your goods are transported using the transport vessel of a third party carrier, the carrier might not undertake the risks of damage to your goods. You can, therefore, buy this policy to cover the damages when the goods are being transported using another carrier service.

  6. Goods in transit (own vehicle) cover

    If your own vehicle is being used for transporting the goods, this cover would insure the goods against possible damages.

  7. Multiple vehicles cover

    If multiple vessels are used in the transportation of goods, this policy can be taken to cover the goods being transported through different vehicles. The policy would cover multiple vehicles under a single plan.

Why transit insurance is required?

A transit insurance policy proves to be a boon for businesses because of the various benefits it provides. Here are some of the benefits of transit insurance policies which make them a must-buy –

  1. Coverage under transit insurance plans is provided on globally standard terms. Thus, even when you are transporting your goods internationally, you can meet the coverage requirements of the country to which the goods are headed
  2. Transit insurance coverage provides financial support to businesses which might face considerable losses if their goods are damaged during transit. The policy, therefore, helps keep the business finances stable even after a loss
  3. Since any possible loss is covered under the transit insurance policy, businesses can also maintain their profitability even when any contingency damages their goods. This profitability also helps businesses maintain their solvency and their market value
  4. The policy can be customised as per the requirements of the business and is, therefore, suitable for all types of businesses

So, if your business is engaged in the movement of goods, which it surely would be, buy a transit insurance plan and secure the losses which you might face if your goods don’t make it to their destination. The policy is easy to buy and comes at low premium rates making it a simple and necessary addition to the transit of your goods.

Frequently Asked Questions

  1. In case of a claim, what documents would be required?

    If you face a claim in your transit insurance policy, you would have to submit the following documents for claim processing –

    • Invoice of the goods in original
    • Survey report
    • Bill of Lading
    • The claim form, filled and signed
    • Shipping details
    • Correspondence is done with carriers and its copies
    • Any other documents as required by the insurance company
  1. What is the meaning of deductible under transit insurance?

    A deductible is the level of claim which the insurance company does not pay. Only when the claim exceeds the deductible limit it is paid and even then the deductible limit is paid by you and the insurance company pays the rest.

  1. Are partial losses covered?

    Yes, even if the goods are partially damaged, the insurance company would cover the financial loss that you have suffered.

A guide to Burglary Insurance policies in India

The crime rate is increasing and getting your house or your office burgled leads to enormous loss. After the money that you spend in acquiring the assets for your home or your business, if the assets are stolen, you face a considerable financial loss. In fact, after a burglary, you might find it difficult to replace the items that you lost to theft. To cover the financial loss suffered due to burglary and theft, burglary insurance policies are available in the market. Let’s explore what a burglary insurance policy entails –

What is burglary insurance?

Burglary insurance is an insurance policy which covers the financial loss that you suffer in case of a burglary or attempted burglary into your home or business premises. Burglary is defined as an act of forceful entry into the house or business premises with an illegal intention of theft.

Features of burglary insurance

Burglary insurance policies have the following salient features –

  • They can be bought by homeowners, tenants as well as business organisations to cover the financial loss suffered due to burglary
  • A burglary insurance policy can also cover theft and robbery. That is why the plans are also called burglary and theft insurance plans
  • There are different types of burglary insurance plans available in the market
  • You can avail different types of burglary insurance policies for covering different types of assets which are exposed to the risk of theft
  • A standard burglary insurance policy can be extended to cover losses suffered due to burglaries committed during riots, strikes, fire, etc.

What is covered under burglary insurance?

Burglary insurance covers the following losses which you might face in case of a burglary or attempted burglary –

  • Damage to the home or business premises due to forceful and unlawful entry
  • Loss of assets or property due to theft and burglary

Coverage under burglary insurance policies can be taken for the following types of assets –

  • Cash and valuables
  • Home appliances
  • Electronic gadgets
  • Money in transit
  • Cash stored in safe
  • Stock in trade
  • Business assets
  • Plants and equipment used in the factory or business premises
  • Jewellery, etc.

What is not covered under burglary insurance?

Burglary insurance policies have the below-mentioned exclusions in which case the claims are not paid –

  • Loss or damage which occurs due to war, strikes, riots, etc. unless otherwise specified
  • Losses due to natural calamities
  • Losses suffered when the property is under renovation
  • Losses due to nuclear threats or contamination
  • Loss of property because it was confiscated by the Government
  • Consequential losses
  • If the family members are involved in the burglary, claims would not be covered
  • Precious metals and cash might be excluded unless specifically covered under the plan
  • Theft or burglary of share certificates, promissory bonds, treasury bills, etc. are not covered
  • Theft by employees or housemaids are not covered
  • Burglary or theft when the premises were left unattended or when the premise was not completely locked
  • Fraudulent claims are not covered
  • Theft using a duplicate key is not covered unless the key was acquired forcefully
  • Burglary, when proper security was not maintained, would not be covered

Types of burglary insurance policies

Burglary insurance policies can be of different types based on the type of coverage as well as the assets that they cover. Here are some of the commonly found burglary insurance policies in India –

  1. Stock Declaration Policy

    This policy is for businesses which cannot estimate the exact value of their stock in trade. In such cases, the highest possible value of the stock is taken to be the sum insured so that the losses can be sufficiently covered.

  1. First Loss Policy

    Under this policy, a portion of the stock is insured which is likely to be burgled. This type of policy is relevant when the total loss cannot be plausibly estimated.

  1. Full Value Policy

    This policy covers the asset for its full value so that in case of loss the full value can be claimed.

  1. Money in Transit Insurance

    This policy covers the risk of theft or burglary on an amount of money which is in transit. The policy is relevant for businesses where the movement of physical cash is involved.

  1. Business Premises Insurance

    This policy covers the risk of burglary and theft in the place of business.

  1. Dwelling Insurance

    Under this policy, your residential house is covered against burglary and theft.

  1. Jewellery and Valuable Policy

    This policy specifically covers precious jewellery, valuable, works of art and other valuables against burglary.

  1. Cash in Safe Policy

    This burglary insurance policy covers the risk of theft of the cash which is kept in a safe at the house or at the business premises.

Burglary v/s robbery v/s theft

While the terms ‘burglary’, ‘robbery’ and ‘theft’ are used interchangeably, their meanings are quite different from one another. Here’s how –

  1. Burglary is when there is an unlawful and forceful entry into your premises. You might or might not be present on the premises when the burglary occurs
  1. Robbery is an unlawful and forceful entry into your premises when you are present on the premises. Your presence is important for the act to be considered a robbery in the eyes of the law
  1. Theft involves non-violent and forceful entry into the premises

Some insurance policies can cover the only burglary while others can also cover theft and/or robbery. So, you should know how these terms differ from one another and check whether the policy allows coverage for all three terms or for some of them.

Premiums of burglary insurance policies

The premiums of burglary insurance plans depend on the asset covered, its value and the expected risks. You can, however, reduce the premiums through the following ways –

  • By installing safety devices in your house or business premises which would alert you to any unlawful activity
  • By installing CCTV cameras which would help in preventing or lowering the risk of burglary
  • By fencing the premises which are being insured
  • By installing security alarms which would lower the extent of loss, etc.

Things to remember when buying burglary insurance

You can buy a burglary insurance policy online by making an online application to the insurance company which is offering the cover. Before buying the policy, however, the following should be kept in mind –

  1. Ensure that all possible assets which face a risk of theft are covered under the burglary insurance policy
  1. Compare the available policies before buying
  1. Check whether the policy covers only burglary, theft or both
  1. The sum insured should be sufficient enough to cover the loss that you suffer. If the sum insured is inadequate, the claim would be settled on a proportionate basis even if the loss is covered under the sum insured. For instance, if the value of an asset is INR 1 lakh but you insure it for INR 80,000, if there is a loss of INR 50,000, the claim would be paid for INR 40,000
  1. The premium of burglary insurance policy can be reduced. Use the available ways to reduce the premium so that the policy becomes affordable

Making a claim under burglary insurance

If a burglary happens and you face a claim, here are the steps which you should take to raise the claim and get it settled –

  1. Inform the insurance company immediately of the burglary
  1. Take pictures of the loss which you have suffered. These pictures would serve as proof to help the insurance company estimate the extent of loss
  1. Record all the losses which you have suffered so that they can be mentioned on the claim form
  1. The receipts of repairs and replacement of the burgled items should be kept securely
  1. Record everything that happens after the burglary has occurred so that you give documentary evidence to the insurance company if required

A burglary insurance policy proves to be a valuable addition to your insurance portfolio as the policy compensates you for the financial loss that you suffer in case of burglaries. So, insure your home or your office under a burglary insurance policy and be financially secured against unlawful activities.

Frequently Asked Questions

  1. What is the meaning of policy extensions?

    Policy extensions are additional coverage options which you can choose by paying an additional premium. These extensions increase the scope of coverage of the policy.

  1. Does burglary insurance offer any policy extensions?

    Yes, burglary insurance plans offer policy extensions which allow you coverage against losses that you face due to riots, strikes, rebellion, etc.

  1. I was on holiday for 10 days and my house was burgled. Would the burglary insurance policy cover this loss?

    No, burglaries occurring when the house is left unattended for more than 7 days are not covered.

All you need to know about the FRDI Bill and its effect on your bank deposits

Fixed deposits are always viewed as secured investment avenues wherein the returns are guaranteed. Many risk-averse investors prefer to invest their hard-earned money in fixed deposit schemes of their banks expecting a guaranteed corpus after the selected duration. But what if your deposits were used to bail out an ailing bank which is on the verge of bankruptcy?

The introduction of FRDI Bill

The Financial Resolution and Deposit Insurance Bill (FRDI Bill) was introduced in the Lok Sabha on 10th August 2017. The objective of the bill was to provide a structural framework which would help banks, financial institutions and insurance companies deal with insolvency and bankruptcy. This Bill aimed at providing an easy way out for eligible financial institutions that are in a financial crisis. According to the proposal of the FRDI Bill, a Resolution Corporation would be established which would have complete authority regarding mergers, transfer of assets, integration of property of the financial institutions which are nearing insolvency.

Role of the Resolution Committee

The Resolution Committee was to handle a sick institution before it becomes completely bankrupt. The role of the Resolution Committee would be to classify the financial firms in five categories based on their financial condition. These categories are as follows –

  • Low
  • Moderate
  • Material
  • Imminent
  • The critical risk to viability

The financial risk of the institution would be evaluated considering the following factors –

  • Assets and liabilities of the institution
  • Capital adequacy
  • Management capability
  • Quality of assets
  • Leverage ratio
  • Sufficiency of earnings
  • Liquidity of the firm, etc.

The Resolution Committee would, therefore, make its assessments and then take measures to salvage an ailing financial institution.

Proposals mentioned in the FRDI Bill and their effects on your deposits

Various proposals were mentioned in the FRDI Bill and each proposal has an impact on your deposits. These proposals and their effects were as follows –

  1. Proposal: non-withdrawal of deposits

    Under the proposed rule under the FRDI Bill, you would not be able to withdraw your bank account balance as per your requirement if the bank is in distress.

    It’s effect:

    Currently, you can withdraw your account balance whenever you require as per the provisions of the Deposit Insurance and Credit Guarantee Corporation Act, 1961. But with this rule, your control on your deposits would be lost.

  1. Proposal

    Your account balance can be converted to fixed deposits by banks and such deposits would be paid after five years

    It’s effect:

    If your savings account or current account balance is converted to fixed deposits, you would lose liquidity and face problems when you need money.

  1. Proposal:

    To bail out an ailing bank your account balance can be reduced. The bank can reduce your account balance substantially.

    It’s effect:

    If your account balance is reduced drastically, you would lose your hard-earned money invested in bank accounts.

  1. Proposal:

    If the bank is in a financial crisis, it has the power to decide how much and in which mode your investments would be returned.

    It’s effect:

    You would have no knowledge of how your money would be handled by the bank and whether you would get the full amount that you have invested. This would create chaos as there would be no security.

  1. Proposal:

    The bank can give their stocks to customers against the value of their deposited money.

    It’s effect:

    Even if you get the stock of the bank, the stock would be exposed to market volatility. This volatility was not present when your money was in the bank account. This measure would not be feasible for risk-averse individuals who don’t like market risks.

  1. Proposal:

    The insurance cover given to accountholders would depend on the account balance maintained by the holders.

    It’s effect:

    Account-holders are given a uniform level of insurance coverage by banks irrespective of their account balance. The insurance cover was for INR 1 lakh. However, with the new rule, the cover would depend on the financial status of individuals. Rich accountholders can enjoy higher coverage while middle-class accountholders would be given a low cover. This would discourage middle-class individuals to keep their deposits in bank accounts.

    The FRDI Bill is supposed to strengthen the framework of handling ailing and insolvent financial institutions. However, it has negative impacts on bank deposits and other bank accounts that you have. Given these negative impacts, the FRDI Bill was open to debates and negative reactions from all sectors. That is why the Government later announced that the FRDI Bill would be dropped. Though currently, the FRDI Bill is not under the proposal, you should know the proposals presented by the Bill and how such proposals would have affected your deposits.

Frequently Asked Questions:

  1. How does the insurance cover given by banks work?

    As per the applicable provisions, bank deposits like a savings account, current account, fixed deposits, recurring deposits, etc. are insured under the Deposit Insurance and Credit Guarantee Corporation (DICGC). The insurance cover is given for up to INR 1 lakhs on your deposit balance. This means, that if you have a savings account and a fixed deposit account in a bank and the total balance of these accounts (including interest) is INR 80,000, you would get coverage for INR 80,000. Even if the bank is wound up, you would get INR 80,000 against your deposit accounts. However, if the balance in the deposit accounts is more than INR 1 lakh, coverage would be available only up to INR 1 lakh.

  1. Can I enjoy multiple insurance cover?

    If the bank account is maintained under different names, you can enjoy multiple insurance cover on each account. For instance, you might have a bank account in your maiden name and another in your married name. In that case, each account would be able to enjoy insurance cover of up to INR 1 lakh.

  1. Can the FRDI Bill be reintroduced?

    The reintroduction of FRDI Bill depends on the Government. The Government might modify the FRDI Bill and introduce it in future if it is feasible for all the segments of the economy.

What is Marine Insurance all about?

What is Marine Insurance all about?

Insurance is an important aspect of growth and success of any business. Financial consequences of unexpected mishaps can get your cherishing business to halt. Having insurance coverage provides protection against unforeseen happenings and various risk involved in the business. Marine insurance is one of the oldest form of insurance that businesses, especially shipping and cargo companies started availing in the 17th century. In this article, let’s learn more about marine insurance and its types.

What is marine insurance?

Every cargo or the ship that carries goods is of value. Irrespective of the value of goods, if there is any unforeseen event happens and the cargo or ship is lost or damaged, it becomes a financial liability for ship owners, shipping companies or to cargo owners. This is when the marine insurance comes in for the rescue. Marine cargo insurance is the most common method used to avail security for your goods from damages, theft or general average etc.

Marine insurance is a type of insurance plan that provides protection to the owner of cargo or ship or to the shipping company against various marine risks. Marine insurance mitigates the risk of loss in an unforeseen event like an accident, loss of life or damage to the property etc. In simple terms, marine insurance provides security to your goods while they are in transit via inland water, road, rail, air, registered post or by courier.

Who needs marine cargo insurance?

Marine insurance can be purchased by import and export merchants, buyers, sellers, buying agents, selling agents, contractors or banks or anyone involved in import and export transactions or domestic transportation of goods. Who needs to buy marine insurance is decided by the nature of the contract. Some of the common contracts of sales are:

  • Free on Board (FOB)
  • Cost & Freight (C&F)
  • Cost, Insurance and Freight (CIF)

In FIB and C&F contracts, the buyer is responsible for buying the insurance. While, in CIF contracts, the seller is responsible for buying the insurance.

Why marine insurance is needed?

While you are in the business of supplying goods or transporting goods of value, it’s important to be covered financially against the potential losses that may arise due to various risks involved in transit. As your goods are the source of revenue for you, securing them ensures continuity and growth of your business. Not just for business, individuals moving their goods from one place to another for personal or professional reasons, securing the valuables while in the transit is extremely important to avoid the financial repercussions of any unfortunate losses or damage. Hence, marine insurance is an important requirement to maintain financial integrity.

Types of marine insurance

Marine insurance policy comes in many variants. Coverage under a marine insurance policy can be customised based on the requirement of the business. Following are the major marine insurance policies available in the market:

  1. Hull insurance

    Hull insurance is a type of marine insurance designed to cover the damages to transportation vessels such as damages caused to ship or boat, its equipment and machinery.

  2. Cargo insurance

    Cargo insurance provides coverage against all potential risks to the cargo or goods that are in transit from one place to another.

  3. Freight insurance

    Freight insurance is a common form of marine insurance that offers extra protection to goods that are being transported from one place to another. Usually, vessel operators are at a loss of freight receivable in case the goods are lost or damaged in the transit. Freight insurance gives them the protection against loss of freight suffered.

  4. Liability insurance

    Marine liability insurance provides liability coverage in the event of vessel collisions. Marine liability insurance also provides coverage against liabilities arising from injury, property damage or loss of life of the third party involved.

    Apart from these, there are various other types of marine insurance policies that can be availed on unique requirements. Following are some of the marine insurance types available:

  5. Voyage policy

    Voyage policy offers coverage for marine risks during a specific voyage. As soon as the ship arrives at the destination, the policy will expire.

  6. Time policy

    Time policy is a marine insurance policy that is valid for a specific time period. Generally, time policies are valid for a year.

  7. Valued policy

    In valued policy, the value of cargo or the goods being transported is ascertained at the beginning. In the event of loss, ascertained value is paid as claim compensation.

  8. Port risk policy

    Port risk policy covers the loss suffered by the ship while it is stationed in the port.

  9. Floating policy

    Floating policies are bought for lump-sum value covering multiple voyages. This policy is suitable for businesses that transport goods frequently.

  10. Open or unvalued policy

    In open policy, the value of goods will not be ascertained initially but the loss suffered will be estimated in the event of loss.

Benefits of marine insurance

There are various benefits of availing marine insurance. Some of the major benefits are as follows:

  1. Marine insurance helps to maintain financial integrity and stability of the business
  2. It helps to manage and reduce various risks associated with the shipment of goods and helps to conduct business without any hassles.
  3. Marine insurance compensates the financial loss that the business may face due to loss or damage to goods during transit

Coverage offered under marine insurance

Following are the coverages offered under a marine insurance policy

  1. Institute cargo clause (C) – covers below named perils
    1. Fire and explosion
    2. Overturning or derailment of land conveyance
    3. Stranding, grounding, sinking and capsizing of the vessel
    4. Discharge of cargo at the port of distress
    5. The collision of vessel or conveyance with any external object other than water
    6. Jettison
    7. General average sacrifice
  2. Institute cargo clause (B) – covers below named perils
    1. Washing overboard
    2. Eruption, lightning, earthquake or volcanos
    3. The entry of sea, river or lake water into the craft, vessel, conveyance or lift van or to the place of storage
  3. Institute cargo clause (A) – Covers all risks both named and unnamed pertaining to the transportation of goods

Many marine insurance policies offer additional coverages at an extra cost of the premium.

Exclusions in marine insurance

Marine insurance policy is customisable with a wide range of extensive coverage options it offers. However, there are certain exclusions to the policy. Following are the major exclusions in a marine insurance policy:

  • Wilful and planned act of negligence and misconduct
  • Delayed shipment
  • Poor and improper packaging
  • Insolvency or bankruptcy of the shipping line
  • War, strikes, riots and civil commotion
  • Wear and tear of cargo
  • Removal of wreck
  • Contamination due to radioactive rays

#4 Tips for identifying the best marine insurance plan

Following are the tips for identifying the best marine insurance plan

  1. Ensure to avail the marine insurance coverage from trusted insurance brand. Do your research on the insurance company’s past records and credentials
  2. Check the nature of coverage offered by the policy and ensure it matches your need
  3. Compare the benefits of marine insurance plans offered by various insurance companies and then choose the plan based on cost-benefit analysis
  4. Read through the fine prints and understand the inclusions and exclusions of the policy thoroughly.

Documents required for marine insurance registration

At the time of registering marine insurance claims, following are the documents required:

  1. Duly filled and signed the claim form
  2. Original insurance certificate
  3. Estimated loss report
  4. Bill of lading copy
  5. Survey report
  6. Shipping specification with a packing list
  7. Original invoice
  8. Details of correspondence exchanged

Frequently Asked Questions (FAQs)

  1. What is ‘General Average’ in marine insurance?

    General average refers to losses that may arise due to voluntary sacrifice of any parts of the cargo or the ship in order to safeguard the ship or the rest of the cargo.

  2. What is ‘bill of lading’?

    Bill of lading is the most common form of a document issued by a carrier to acknowledge the receipt of cargo for shipment.

  3. How should the insured act in the event of loss or damage?

    In the event of loss, insured should first take preventive measures to reduce the impact of an event. Insured must act the same as the case the goods were uninsured. To claim the losses, insured must immediately notify the insurance company about the loss or damage.

  4. What is ‘Free on Board’ (FOB) contract?

    The free onboard contract refers to the contract in which the seller is required to deliver the goods at his cost through a specific route to the destination as designated by the buyer. In this risk transfers from seller to buyer at the FOB point.

  5. What is Cost, Insurance and Freight (CIF) contract?

    In CIF contract, cost insurance and freight expenses are borne by the seller in order to cover the buyer against possible losses or damage to goods in transit.

All you need to know about motor insurance premium calculator

Motor insurance policies are mandatory in India. If you own a car or a bike, you have to buy a valid motor insurance cover on the vehicle so that you can drive your car or bike without facing legal consequences. Since the policy is mandatory, you have to invest in a motor insurance plan for your vehicle. 

There are two types of policies for your vehicle. One is the third party liability which covers any liability that you face if your vehicle damages third party property or harms someone physically. The other is the comprehensive package policy which covers both third party legal liability as well as the damages suffered by your vehicle itself. You can buy any suitable policy as per your coverage requirements but do you know the premiums are calculated?

Factors affecting motor insurance premiums

Premiums for a motor insurance policy depends on a lot of factors. These factors are mentioned below:

  • Type of policy that you buy

    The premiums for motor insurance policies depend on the type of policy that you choose. Third-party plans have lower premiums which depend on the cubic capacity of your vehicle’s engine. Comprehensive plans, on the other hand, have higher premiums because the scope of their coverage is wider.

  • Age of the vehicle 

    The premium for newer vehicles is higher compared to older vehicles. This is because as the vehicle ages, its value decreases. Since the value is reduced, the premiums are low.

  • Registration location 

    The place where your vehicle is registered also has a direct bearing on the motor insurance premium. In metropolitan cities, the probability of accidents is higher and so premiums in such places are higher.

  • Make, model and variant (MMV)

    The make, model and variant of the vehicle directly affect its premium. It is because the MMV determines the value of the vehicle. If the vehicle has a higher value the premiums would be higher and vice-versa.

  • Term selected

    Nowadays, vehicle insurance policies are also available for longer tenures which provide coverage for up to 5 years. If you choose a long term plan, you would have to pay the aggregate premium upfront. So, long term plans prove costlier than annual ones.

  • Add-ons 

    Comprehensive vehicle insurance plans allow optional coverage benefits called add-ons. You can choose any add-on that you want to increase the scope of your motor insurance cover. However, each add-on has an additional premium attached to it. So, if you choose add-ons, the premiums would increase.

  • Fuel variant

    Petrol vehicles are cheaper than diesel ones. That is why premiums for petrol vehicles are lower than those for diesel vehicles.

  • Modifications

    If you do modifications on your vehicle such that the value of the vehicle increases, such modifications impact the premium rate. Since the value has increased, the premiums are also increased. However, if you modify your vehicle to suit the usage of a disabled rider, you would be allowed a premium discount and your premiums would reduce.

  • Premium discounts

    Motor insurance policies have a range of premium discounts which help in lowering your premiums. If you can claim the available discounts, your premiums would reduce. Commonly available discounts in motor insurance plans are as follows –

    • Discount for installing safety gadgets in the vehicle 
    • Discount for having the membership of a recognized automobile association 
    • Discount if you have not made a claim in the last policy years (called no claim bonus discount)
    • Discount if you choose a voluntary deductible and opt to pay a part of the claim yourself
    • Discount for buying long term policies, etc.
  • Status of an existing policy

    If you are renewing an existing motor insurance plan, its status would affect the renewal premium. If the existing policy has lapsed, the renewal premiums would be high. If, however, your existing policy is still in force, the renewal premium would not be increased.

Now you know the factors which determine the premium that you would be charged for your motor insurance policy. How about calculating the premium before buying or renewing the policy?

Motor insurance calculator

There are online motor insurance calculators which help you calculate the exact premium of your policy. These motor premium calculators calculate the premium based on the vehicle details that you enter. Using these calculators you can get an idea of the premium that you would have to pay for your motor insurance policy.

Where to find motor insurance premium calculator?

Motor insurance calculators are online tools and they are found on the website of the insurance company. Moreover, you can also visit the websites of online insurance brokers, like Turtlemint, which allow you to calculate the premiums of multiple motor insurance policies at once. By using Turtlemint’s motor insurance calculator you can calculate and also compare the motor insurance premium of leading companies. You can then choose a company which offers the best coverage benefits at the lowest premium rates and buy or renew your motor insurance plan.

How do motor insurance calculators work?

Motor insurance calculators work on the details that you enter into the calculator. You would have to provide the details of your vehicle based on which the premiums would be calculated. These details include the following:

  1. Registration number of the vehicle
  2. Make, model and variant
  3. Registration year
  4. Manufacturing year
  5. Place of registration
  6. Fuel type
  7. History of claims in an existing policy so that the no claim bonus can be determined
  8. Whether the existing policy has lapsed or not
  9. Type of policy that you want
  10. Add-ons selected if any

Once all the details are entered, the premium would be calculated and displayed. 

How to use Turtlemint’s motor insurance calculator?

As mentioned earlier, Turtlemint’s motor insurance calculator helps you compare different motor insurance policies before buying. This allows you to choose the best plan at the lowest premium rates. To use Turtlemint’s motor insurance calculator, here are the steps –

  1. Visit the homepage of Turtlemint at www.turtlemint.com and choose your vehicle – Car or bike
  2. Enter the registration number of the vehicle and proceed
  3. Provide your vehicle’s make, model and variant
  4. Manufacturing year and fuel type would also be required
  5. Next, you should enter the details of your previous policy and state whether the policy is in force or has expired
  6. The type of the previous policy and the claim history is also to be recorded. If no claims have been made, choose the applicable no claim bonus. Also, state the previous insurer
  7. In the next step, you are asked to provide your contact information so that Turtlemint’s executive can call you and help you with buying the policy
  8. You would then be able to check and compare the available policies and choose the one which is best for your coverage needs

Top #4 Benefits of motor insurance calculator

A motor insurance premium calculator offers great help in calculating your motor insurance premiums even before you buy the policy. It provides the following benefits –

  1. You can estimate the premium outgo beforehand and assess the affordability of your motor insurance policy
  2. You can make a provision in your annual budget when you know exactly the premium that you would have to pay for buying or renewing motor insurance plans
  3. If you use the motor insurance calculator of online websites like Turtlemint, you would be able to compare the premium rates of different insurers and get the best deal
  4. If the calculated premium is high you can make changes in the policy and arrive at the most affordable rate

So, if you have to buy a new motor insurance policy or if your existing policy is up for renewal, use the motor insurance calculator to determine the premium, compare the available plans on their coverage benefits vis-à-vis premium rates and then buy or renew the plan.

Frequently Asked Questions:

  1. What is the cost of using motor insurance calculator?

    There is absolutely no charge involved in using motor insurance calculators. You can use the calculator and calculate your premiums anytime without paying anything.

  2. Can I reduce my motor insurance premiums?

    Yes, your motor insurance premiums can be reduced through the following ways –

    • By using premium discounts wherever applicable
    • By choosing only the required add-ons
    • By renewing the policy on time
    • By not making small claims and preserving the no claim bonus
    • By comparing 
  3. Does the premium remain the same every year under motor insurance plans?

    No, the premium differs every year because the value of the vehicle decreases as it ages. Moreover, if there have been claims, the premiums would not be discounted. If you choose additional add-ons on renewing the policy, then also your premiums would increase. Thus, the premium is dynamic and changes every year.

History of LIC Claim Settlement Ratio

LIC was formed in the year 1956 when the Life Insurance Corporation Act was passed to nationalise life insurance business in India. From 1956 to the year 2000 LIC was the sole life insurance provider in India enjoying monopoly position. Though other private insurance companies entered the insurance segment from 2000, LIC retained its leading market position. Even today, LIC has the largest market share among other life insurance companies and enjoys the trust of more than 250 million customers.

LIC offers a range of life insurance products like term insurance, endowment insurance, money back plans, child plans, unit-linked plans, etc. Even health insurance plans are offered by the company which help you meet the rising medical costs of common ailments. All the plans offered by the company have very good coverage benefits and the premiums are also low. Even in the case of claims, LIC believes in settling its customers’ claims quickly and efficiently. This is the reason why the company has been consistently enjoying a high Claim Settlement Ratio. Do you know what the ratio means?

What is Claim Settlement Ratio?

Claim Settlement Ratio (CSR) is the percentage of claims which an insurance company settles against the total number of claims made on it in one financial year. For instance, if, out of 100 claims in a financial year, the insurance company settles 95 claims, the CSR would be 95%. If the ratio is high it shows that the company settles the maximum of its claims and it is a good indicator.

LIC Claim Settlement Ratio history

As stated earlier, LIC has maintained a good CSR over the years and this is one reason why customers trust LIC. Here are LIC Claim Settlement Ratio over the last few years –

Financial year Number of claims Number of claims settled LIC Claim Settlement Ratio
2017-18 739,082 724,596 98.04%
2016-17 769,386 756,399 98.31%
2015-16 761,983 749,249 98.33%
2014-15 755,901 742,243 98.19%
2013-14 760,344 746,212 98.14%
2012-13 750,576 733,545 97.73%
2011-12 731,136 712,501 97.42%

As can be seen from the above table, LIC maintained a ratio of more than 98% in most of the financial years leading the claim settlement race among other insurers. This shows that the company honours its claims without fail.

Analysis of LIC Claim Settlement Ratio of 2017-18

In the last financial year of 2017-18, LIC Claim Settlement Ratio was quite high at 98.04%. Out of the claims received under 739,082 policies, LIC settled claims under 724,596 policies thus having such a high ratio. The company rejected 0.67% of its claims while 0.08% of the claims were still pending when the financial year ended. 1.21% of the claims were unclaimed by the policyholders. Out of the claims settled during 2017-18, here’s the claim turn-around-time followed by LIC –

  • Claims settled in less than 3 months – 45.17%
  • Claims settled in 3 months to less than 6 months – 44.64%
  • Claims settled in 6 months to less than 12 months – 3.51%
  • Claims settled in more than 12 months – 6.68%

LIC has been operating since the last 60 years and more and has built up a good claim settlement department which helps the company settle most of its claims. This high claim settlement record also garners trust among policyholders who favour LIC for their insurance needs. So, if you are considering buying a life insurance policy, you can trust LIC and choose a suitable plan for your coverage needs.

Frequently Asked Questions

  1. Does claim settlement ratio measure the amount paid in claims?
    No, the claim settlement ratio is used to measure the number of policies under which the claims have been paid. The ratio has nothing to do with the amount of claim paid by the insurance company.
  2. What is the meaning of pending claims?
    The claim settlement ratio is calculated by considering the number of claims settled by the insurance company in one financial year. If, however, a claim has been made on the insurance company and the company is unable to settle it within the completion of the financial year, the claim which has been made would be considered a pending claim. The insurance company would carry forward the claim to the next financial year and settle it in that year.
  3. If an insurance company has a low claim settlement ratio does it mean that the company is bad?
    No, a low claim settlement ratio does not necessarily mean that the insurance company is bad. There might be some reasons for a low ratio. For instance, most of the company’s claims could have been made in the last days of the financial year which the company could not settle within that year itself. This would make such claims pending and reduce the claim settlement ratio.
  4. Who publishes the claim settlement ratio?
    The Insurance Regulatory and Development Authority of India publishes the claim settlement ratio of all life insurance companies for each financial year.

Liability Insurance – Types and Compare Plans

In today’s uncertain world, insurance has become an important risk management tool. Insurance gives much-needed peace of mind by providing a financial safety net against various risks and liabilities. Life insurance, motor insurance and health insurance are the commonly availed insurance solutions. However, there are many other insurance products that address certain specific issues and offers risk cover for the same. Liability insurance is one such insurance product that covers specific risks. In this article, let’s learn more about liability insurance.

Liability insurance –an overview

Liability insurance is a part of general insurance that offers protection to individuals or businesses against the risk of legal liabilities that may arise due to negligence, malpractice, damage or an injury caused to the third party. There are various types of liability insurance with each one having a different focus. Liability insurance products are most commonly availed by businesses to safeguard themselves against lawsuits and claims that may arise due to day-to-day business operations. Main aspects covered in any liability insurance policy is the cost of defending the lawsuit and the compensation to be paid.

Why liability insurance is needed?

Considering the fact that today we are living in a highly litigious society and business environment, lawsuits are common. Expensive lawsuits can put your business and personal assets at stake. Having adequate liability insurance cover can come to your aid in such situations. Following are the reasons why liability insurance is needed:

  • Liability insurance provides protection against liabilities arising out of workplace accidents and injuries
  • Liability insurance protects businesses or individuals against legal costs that need to be incurred while defending the case of claims placed by third-party
  • Liability insurance helps in settling the expensive lawsuits

Who needs liability insurance?

Every business operating in today’s litigious market environment needs liability insurance. However, there are various types of liability insurance products covering the liabilities of a specific nature. Some covers may be needed for high-risk businesses like manufacturing, construction etc. Not just business entities, liability insurance is needed for individuals living in this litigious society also. Certain liability insurance like auto liability insurance is mandatory by law for every motor vehicle owner.

Types of liability insurance

There are many types of liability insurance policies available which can be chosen based on the nature of the business, need or individual requirements. Following are some of the most common forms of liability insurance:

  1. Public liability insurance

    In any business, accidents are inevitable. Accidents that expose the business to the risk of litigations can financially affect business growth. This is where public liability insurance comes into your business’s rescue. Public liability insurance indemnifies your business for any claims arising out of any injury, damage or accidents that occur on your premises during the course of business operation.
    For example, if a customer slips on a wet floor of your business premise and breaks his leg which needs hospitalisation. In this case, you will have to compensate the customer for medical treatments. Customer may also take legal action. This is where liability insurance policy compensates

    • What is covered in public liability insurance?

      Public liability insurance mainly covers-

      • The legal cost of action
      • Compensation to be paid in claims made against the business
      Along with this, comprehensive public liability insurance also covers legal exposures arising out of-

      • Act of god’s perils
      • Sudden and accidental pollution
      • Transportation of hazardous substances and many more
    • What is not covered in public liability insurance?
      Some of the exclusions in public liability insurance are:

      • Libel and slander
      • Fines and penalties
      • Punitive and exemplary damages
      • War
      • Deliberate non-compliance of any statutory provisions
  2. Employer’s liability insurance

    Employer liability insurance is an insurance policy that provides covers with the statutory liability of an employer arising out of death or bodily injury caused or an occupational illness sustained by an employee/workmen during the course of employment. The policy covers ‘employee’/’workmen’ as defined in the Employee Compensation Act. There is also a provision to cover employees who do not come under the purview of the term ‘workmen’ as per the Employee Compensation Act.

    • What is covered under Employers liability insurance?

      Following statutory liabilities of the employer are covered under the policy:

      • Death of an employee due to a workplace accident or occupational illness
      • Bodily injury resulting in disablement caused due to a workplace accident or occupational illness
      • Liabilities arising under common law 
      • Costs and expenses incurred by the insured with the consent of the company
    • What is not covered in the Employer’s liability insurance?

      War and nuclear perils

      • Employer’s liability to employees of contractors
      • Occupational diseases mentioned in Part ‘C’ of Employees Compensation Act
      • Insured’s liability which attaches by virtue of an agreement
  3. Product liability insurance

    Product liability insurance is very important for product manufacturers to manage the risk. Product liability insurance is an insurance plan that covers liabilities that may arise due to damage caused to the third party by the product of the insured. The coverage includes defence cost incurred to defend the case and also the compensation to be paid. However, the policy excludes liability for product recall, pure financial loss, product guarantee and loss of goodwill etc

  4. Directors and Officers liability insurance

    Directors and officers are the key personnel of any company who takes the crucial decisions for the company in their managerial capacity. Adverse consequences of their decisions can bring in a lawsuit against them from various sources such as shareholders, creditors, employees, customers, suppliers, competitors and regulators. Such expensive lawsuits can put directors and officers personal assets at stake.

    Directors and officers liability insurance provide protection against personal liability of directors and officers arising due to any wrongful act committed by them in their managerial capacity. Coverage includes management liability and indemnification, spousal liability extension, coverage for legal representatives of deceased insured and cover for new subsidiary etc. However, directors and officers insurance policy do not cover claims covered by other insurers, misuse of company’s fund, criminal act, dishonesty, pending litigations and breach of law etc.

  5. Third party liability insurance

    Third party liability insurance covers the damages caused by the insured to the third party. For example, let’s say in an accident you cause a damage to third party property. The other person can take legal action on you claiming for the loss. In this case, third party liability insurance pays for the cost of defending the case along with compensation to be paid for the damages occurred.

  6. Professional indemnity insurance

    Professional liability or indemnity insurance is a type of liability insurance that protects professionals such as doctors, lawyers and accountants against the liabilities arising out of negligence or errors and omissions done at the time of providing services to their clients.

  7. Cyber risk insurance

    Social media and use of technology play a key role in the growth of any organisation. Cyber risk insurance policy helps in reducing the risk exposure of the organisation in relation to a cyber-related security breach. Typically, the cyber risk insurance policy covers expenses related to cyber-related security breaches such as investigation cost, privacy and data breach notification, business losses and legal expenses.

  8. Trade credit insurance

    Trade credit insurance policy provides protection to the business for non-payment of commercial debt. The policy protects the manufacturers, service providers and traders against the losses of non-payment.

How to decide the premium amount for a liability insurance policy?

Premium amount for the coverage sought by the insured individual or business will vary depending on their needs and requirements. Insurance company’s base rate for the policy will be considered in the first place while accessing the premium rates. Other factors like the nature of business and risk exposure to the particular company, previous claim history and business environment will be considered while assessing the insurance cost.

Liability insurance claim process

The claim process may vary depending on the nature of the claim, type of liability insurance product. The process for claim will also vary from insurance company to insurance company. In case claims where no lawsuits are brought against, insured needs to fill in the claim requisition form and submit it along with the relevant documents. In case of lawsuits from third-party, the process will again vary depending on how settlements are made, whether in court or as out-of-the court settlement.

Frequently Asked Questions (FAQs)

  1. How much liability insurance is ideally required?

    The amount of liability insurance coverage depends on the type of liability insurance cover you or your business is seeking. There are various factors that are to be considered while deciding the coverage that you need such as type and size of the business, type of customers, number of employees and many more.

  2. How are directors and officer’s liability insurance structured?

    Directors and officers liability insurance are structured with layered coverage. There are three layers in the policy and you can structure them based on your unique needs.

    • Side A cover: Directors and officers personal liabilitySide A cover: Directors and officers personal liability
    • Side B cover: Company reimbursement
    • Side C cover: Entity securities coverage
  3. Does directors’ and officers’ liability insurance cover the entity?

    Though directors and officers liability insurance are designed to protect the personal assets of directors and officers of the organisation, it also covers organisational entities from securities claims.

  4. What are the damages that need to be compensated for in a defective product case?

    In case of defective product case, compensation will include past and future medical expenses, funeral expenses and diminished or impaired earning capacity due to emotional distress, disability, pain and disfigurement.

  5. Is employers’ liability insurance a legal requirement?

    Yes. Employer’s liability insurance is a legal requirement in India under the Workmen Compensation Act, 1923 or Employee Compensation Act.