Commercial Insurance Policies

Fire insurance policy covers against other perils as well in addition to loss or damage due to fire.

The main risks covered by a Fire Insurance policy are as follows:

• Fire, including due to its own fermentation, or natural heating or spontaneous combustion.
• Explosion or Implosion
• Lightning
• Earthquake, volcanic eruption, or other convulsions of nature
• Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Tsunami, Flood and inundation
• Subsidence of the land on which the insured Premises stand, Landslide, Rockslide
• Bush fire, Forest fire, Jungle fire
• Impact damage of any kind, i.e., damage caused by impact of, or collision caused by any external physical object (e.g. Vehicle, falling trees, aircraft, wall etc.)
• Missile testing operations
• Riot, strike, Malicious damage
• Acts of Terrorism
• Bursting or overflowing of water tanks, apparatus and pipes
• Leakage from Automatic sprinkler installations

Financial damage is covered by burglary insurance in the event of a burglary or attempted burglary. Burglary is defined as the act of forceful entry into a premises with an illegal intention of theft.

Shopkeeper Insurance Policy covers all the probable risks and perils faced by small to medium sized shop owners. Package policies cover risks such as fire, burglary, cash, fidelity, public liability, workmen’s compensation, machinery breakdown, glass, neon signs, etc. There will be separate sections dedicated to each class of risks in the package policy, and the customer can choose sections according to his/her needs.

The office package insurance policy covers most of the possible risks faced by an office. It is a package policy that covers risks under the following policies:

• Fire and other natural calamities as covered under a fire policy
• Burglary
• Machinery Breakdown
• Electronic Equipment
• Money
• Fidelity Guarantee
• Plate Glass
• Neon Sign
• Personal Accident Insurance
• Third party Liability
• Workmen’s compensation/Employer’s liability

Public liability Insurance provides financial assistance in the event of third party liabilities.

It covers liabilities to third parties – Bodily Injury or Property Damage arising out of the premises and operations of the Insured’s business. It also covers legal expenses – lawsuits, investigations and settlements.

The policy can be extended to industrial/non-industrial risks, business dealing with hazardous substances etc.

The Workmen’s Compensation Insurance policy protects the legal liability of employers under the Workmen’s Compensation Act 1923 and Fatal Accident Act 1855.

Workmen’s Compensation provides financial assistance to the employer to pay compensation to employees or their families in the event of death, total/partial permanent disablement, temporary disablement, or other injury arising out of or in the course of employment. This policy can be extended to cover medical expenses due to accidents.

Professional indemnity insurance protects businesses and professionals, such as doctors, lawyers, or accountants, who provide advice or services against negligence or unintentional breaches of written agreements or contracts.

An individual or company under this policy is covered for any legal expenses incurred in connection with compensating clients for loss or damage caused by negligent services or advice.

Product liability insurance helps protect the business from claims that a product manufactured, sold or distributed caused bodily injury or property damage to a third party.

This policy provides financial support to compensate third parties for:

• Personal injuries caused by the faulty product

• loss of or damage to property caused by your faulty product

However, this policy will not cover the liability caused by defective products resulting from poor workmanship.

A directors and officers insurance policy protects a company’s management from claims related to the decisions and actions taken as part of their duties. These wrongful actions may include – breach of trust, breach of duty, neglect, error, misleading statements, wrongful trading etc.

D&O insurance reimburses the defense costs incurred by board members, managers, and employees in defending against claims made by third parties. D&O insurance also covers monetary damages, settlements, and awards resulting from such claims.

 Group health insurance is a health insurance policy offered to a group of individuals.

Definition of ‘Group’ – A group should consist of persons who assemble together with a commonality of purpose or engaging in a common economic activity. No group should be formed solely for the purpose of obtaining insurance. There should be a clearly evident relationship between the member and the group manager for services other than insurance.

Salient features of Group Health insurance policies are:

• This plan allows companies, organisations, banks, and societies to procure health insurance for their entire staff or members under a single policy.

• These policies waive off the waiting period requirement mandated in individual insurance policies.
• Provides a comprehensive coverage for medical expenses, cost of medicines, ambulance etc.
• Covers medical expenses incurred for hospitalization due to accident/sickness, day care procedures, hospital cash benefits etc.
• The policy can be customized as per the requirement of the group
• Family members can be included, if desired
• Cashless facility can be availed.

Group personal accident insurance protects against accidental death and disabilities of the group members. This policy covers accidents worldwide.

General benefits included in Group Personal Accident Insurance Policies are:

• Accidental Death– The family member receives compensation in the event of the insured’s death due to accident.
• Permanent Total disability– If an accident results in the permanent total disability of the insured person for a period more than 12 months, compensation is paid by the policy based on the sum insured.
• Permanent Partial Disability– If an accident results in the permanent partial disability of the insured person for a period more than 12 months, compensation is paid by the policy as a percentage of the Sum insured depending on the disability.
• Ambulance Charges– Ambulance charges are reimbursed if the insured, because of the accident/injury, has to be taken to the hospital.
• Medical Expenses – All the medical expenses/hospitalization charges related to the accident get reimbursed.

Group term insurance policy offers Life cover to a group under a single policy. It provides financial security to the beneficiaries in the event of death of the insured person.

Group Term Life Insurance plans offer tax benefits to both employers and employees. As per prevailing Tax Laws, Death benefits are exempt from tax under Section 10(10D) of the Income Tax Act, 1961.

Group Term Insurance policies have a few disadvantages -These policies are issued by employers and the coverage is tied to employment. Hence, once the person is retired, no coverage will be available. Since the policy is through the employer, the coverage amount may be low. The insured person doesn’t have any control over the policy and hence it becomes unreliable for personal financial planning.

Group Gratuity insurance provides financial assistance to employers to manage their gratuity liability to employees.

Terms:

• If a gratuity liability for years of service is owed, it can be paid as a lump sum or within five years as an annual premium.
• The annual gratuity liability can be calculated and paid in the same year.
• An employer can set up a Gratuity Trust and deposit annual premiums into it.
• If the employee retires, the liability can be settled by withdrawing funds from the trust.

The fund invested in the trust will receive interest each year at current rates as agreed.

In case of death of the insured employee during the period of employment, the insurance company pays the employee the total gratuity amount up to retirement, covering the life risk. The employer is entitled to income tax benefits for amounts paid into a Gratuity Fund.