General Insurance is known as a Non-Life Insurance, they have wide range of insurance products to covers such as properties against fire, burglary, natural climates etc., personal insurance such as Accidental and Health Insurance, and liability insurance covers legal liabilities. There are also other covers such as Errors and Omissions insurance for professionals, credit insurance etc. The non-life companies also offer policies covering machinery against breakdown, Marine Cargo policy covers goods in transit including by sea, air and road. Further, insurance of motor vehicles against own damages due to accidental and Fire and theft and also cover third party cover and its mandatory Indian law. Workmen’s Compensation Policy etc. For instance, there are package policies available for householders, shop keepers and also for professionals such as doctors, chartered accountants etc. Apart from offering standard covers, insurers also offer customized or tailor-made ones.
Types of Insurance:
- Fire Insurance
- Marine Insurance
- Motor Insurance
- Engineering Insurance
- Others Insurance
- Fire Insurance:
The term fire in fire insurance is interpreted in the literal and popular sense. There is fire when something burns. In other words fire means visible flames or actual ignition. Simmering/ smoldering is not considered fire in Fire Insurance. Fire produces heat and light but either of them alone is not fire. Lightening is not a fire but if it ignites something, the damage may be due to fire.
Under section 2(6A) Insurance Act 1938, the fire insurance business is defined as follows:
“Fire insurance business means the business of effecting, otherwise than independently to some other class of business, contracts of insurance against loss by or incidental to fire or other occurrence customarily included among the risks insured against in fire insurance policies”.
Example: The following are the items which can be burnt/ damaged through fire:
We can covers under Fire Polices: Office, house, Factory, Godowns Buildings, Electrical installation in buildings, Contents such as plant & machinery and equipment and it’s accessories, etc. Goods (raw materials, in–process, semi–finished, finished, packing materials, etc.) in factories, godowns and in the open area, Furniture & fixture and fittings, office equipment such as computer, printer etc., Pipelines (including contents) located inside or outside the compound, etc.
Fire policy can take on reinstatement value or market value.
- Marine Insurance Policy
A contract of marine insurance is an agreement whereby the insurer covers against losses incidental to marine adventure.
There is a marine adventure when any insurable property is exposed to maritime perils i.e. perils consequent to navigation of the sea. The term 'perils of the sea' refers only to accidents or causalities of the sea, and does not include the ordinary action of the winds and waves. Besides, maritime perils include, fire, war perils, pirates, seizures and jettison, etc.
There are four types of Marine Insurance:
- Hull Insurance - Covers the insurance of the vessel and its equipment i.e. furniture and fittings, machinery, tools, fueled. It is affected generally by the owner of the ship.
- Cargo Insurance - Includes the cargo or goods contained in the ship and the personal belongings of the crew and passengers.
- Freight Insurance - Provides protection against the loss of freight. In many cases, the owner of goods is bound to pay freight, under the terms of the contract, only when the goods are safely delivered at the port of destination. If the ship is lost on the way or the cargo is damaged or stolen, the shipping company loses the freight. Freight insurance is taken to guard against such risk.
- Liability Insurance - Is one in which the insurer undertakes to indemnify against the loss which the insured may suffer on account of liability to a third party caused by collision of the ship and other similar hazards.
In a contract of marine insurance, the insured must have insurable interest in the subject matter insured at the time of the loss. Insurable interest is not required to be present at the time of taking the policy.
Types of Marine Insurance Policies
- Voyage Policy - Is a policy in which the subject matter is insured for a particular voyage irrespective of the time involved in it. In this case the risk attaches only when the ship starts on the voyage.
- Time Policy -Is a policy in which the subject matter is insured for a definite period of time. The ship may pursue any course it likes, the policy would cover all the risks from perils of the sea for the stated period of time. A time policy cannot be for a period exceeding one year, but it may contain a 'continuation clause'. The 'continuation clause' means that if the voyage is not completed within the specified period, the risk shall be covered until the voyage is completed, or till the arrival of the ship at the port of call.
- Mixed Policy - Is a combination of voyage and time policies and covers the risk during particular voyage for a specified period of time.
- Valued Policy - Is a policy in which the value of the subject matter insured is agreed upon between the insurer and the insured and it is specified in the policy itself.
- Open or Un-valued Policy - Is the policy in which the value of the subject matter insured is not specified. Subject to the limit of the sum assured, it leaves the value of the loss to be subsequently ascertained.
- Floating or Declaration Policy - Is a policy which only mentions the amount for which the insurance is taken out and leaves the name of the ship(s) and other particulars to be defined by subsequent declarations. Such policies are very useful to merchants who regularly dispatch goods through ships.
- Machinery Breakdown (MBD) Insurance:
- Electronic Equipment(EEI) Insurance:
The unexpected occurrences of Machinery Breakdown can damage machinery and cause expensive production delays or interrupt cash flow. This policy covers the breakdown of machinery due to various perils. This policy is indispensable for businesses that operate using a large number of machines. The breakdown of a single machine may bring the operations of the factory to a standstill. This policy covers monetary costs involved in restoration or replacement of machines.
- Motor/ Vehicle Insurance:
As per the Motor Vehicles Act, 1988 it is mandatory for every owner of a vehicle plying on public roads, to take an insurance policy, to cover the amount, which the owner becomes legally liable to pay as damages to third parties as a result of accidental death, bodily injury or damage to property. A Certificate of Insurance must be carried in the vehicle as a proof of such insurance.
Two types of covers are available:
Liability Only Policy:
The policy covers the vehicle owner's legal liability to pay compensation for:
- Death or bodily injury to a third party person.
- Damage to third party property.
Liability is covered for an unlimited amount in respect of death or injury and damage to third party property for Rs.7.5 lacs under Commercial vehicle and private and Rs. 1 lakh for Scooters / Motor Cycles.
In addition to the coverage under liability only, this policy covers loss or damage to the insured vehicle and its accessories due to:
- Fire, explosion, self-ignition or lightning.
- Burglary, housebreaking or theft.
- Riot and Strike.
- Malicious Act.
- Terrorist Act.
- Earthquake (Fire and Shock) Damage.
- Flood, Typhoon, Hurricane, Storm, Tempest, Inundation, Cyclone and Hailstorm.
- Accidental external means.
- Whilst in transit by road, inland waterway, lift, elevator or air.
- By landslide/Rockslide
- No- claim discounts are available on renewal of policy, ranging from 20% to 50%, depending upon the type of vehicle and the number of years for which no claim has been made.
- The policy also pays for towing charges from the place of accident to the workshop upto a maximum limit of Rs.300/- for Scooters/Motorcycles and Rs.1500/- for cars and commercial vehicles. It is also permissible to opt for higher towing charges subject to payment of extra premium.
A restricted cover is also available covering the risk of Fire and/or Theft only, in addition to the compulsory cover granted under "Liability Only Policy". However the same is not available in case of vehicle ratable under Class D, Tariff for Miscellaneous and special types of vehicles.
Rating depends upon the following factors:
- Cubic capacity
- Geographical zone
- Age of the vehicle
- GVW of in case of commercial vehicles
- Add on Covers
The important exclusions under the policies are:
- Wear and tear, breakdowns
- Consequential loss
- Loss when driving with invalid driving license or under the influence of alcohol.
- Loss due to war, civil war, etc.
- Claims arising out of contractual liability.
- Use of vehicle otherwise than in accordance with `limitations as to use ' (e.g. private car being used as a taxi)
- Home Insurance
Home Insurance policy provides a cover to the structure and contents of your home from all unforeseen natural & man-made catastrophes. It provides protection for property and interests of the insured and his family members. It is imperative that you secure your home which gives one peace of mind protecting the most valued possession.
SectionI: Fire & Allied Perils. Loss to the residential building, household goods & personal effects - as per Fire Policy and Earthquake Risk.
A) Against House Building.
B) Against household contents.
SectionII: Burglary & Housebreaking including larceny or theft (Contents only)
SectionIII: All Risk against valuable items. Loss or damage to Jewellery, Valuables etc. due to accident or misfortune
SectionIV: Plate Glass Cover (fixed). Accidental breakage of fixed plate glass
SectionV: Breakdown of domestic appliance. Damage to electrical appliances (refrigerator, mixer etc.) due to electrical or mechanical breakdown.
SectionVI: Television Sets (All Risk) cover. Sum insured should be its new replacement value
SectionVII: Pedal Cycle (All Risks) cover. Loss by Fire & allied perils Housebreaking / Theft, Accidental external means
SectionVIII: Baggage Insurance cover. Loss to accompanied baggage by accident or misfortune
SectionIX: Personal Accident Insurance cover. Death or bodily injury by accidental, external violent, visible means including Medical Expenses resulting from accident & weekly compensation during hospitalization in Hospital only.
SectionX: Public Liability &; Workman Compensation Risks. Legal liability of the Insured to the public for bodily injury or accidental death and workman compensation as per Workman Compensation Act
- Burglary Insurance:
This policy covers property contained in business premises, stocks owned or held in trust against the risk of burglary. It also covers cash, valuables, securities kept in a locked safe or cash box in locked steel cupboard on specific request.