Talk about insurance and the first thing that comes to one's mind is that the bad things always happen to the other person and never to us. But that is not true. Calamities and mishaps are always around the turn. This is the argument that most insurance agents offer to their clients, when they are soliciting life insurance. But when the same argument is also applied when the client asks for securing his business assets, they are either met with a nonchalant shrug or a frosty silence. But the fact remains that insurance is not limited to your life or car. As a businessperson, you should look at securing all your assets, safeguarding yourself from any future mishap, resulting in any type of losses.

“What is sad is that a large percentage of business people are not even aware of the kind of good non-life insurance offerings that most agencies have. And they procrastinate about going for it, as they feel that it is not very crucial,” said Sanjay Sanghvi, an Independent Insurance Portfolio Manager.

Not crucial, till a fire sweeps through the office or the premises are burgled. That is when they realize that maybe they should have signed up for the non-life insurance policies for business houses. And if you too have not given insuring your business premises and process, then maybe it is time you consider it. You can either go for a comprehensive policy or secure some of the assets. Bear in mind, that the more assets you choose to secure or the increased coverage you require, thehigher the premium you will have to pay.

The insurance sector, which has 12 private and public non-life agencies, is getting very compe­titive, with the entry of several private companies. They are going all out to entice customers to sign up for their non-life policies. And with the de-tarriffing of this segment, that is slated to come into effect soon, things are going to get increasingly lucrative for customers.
 

The Dos And Don'ts
There are several things you have to bear in mind while going for a corporate insurance policy. For starters, have a clear idea of the assets you want to secure. Next, make sure that you give the correct and most updated information to the agency. For instance, if you are seeking the accident insurance of your current staff of 100 people, the insurance company will not pay for any mishap occurring to the 101st person.

Always veto your insurance plans with your lawyer and financial advisor. Talking to the lawyer keeps you grounded on the situations when you can challenge the insuring company for not honoring their promises. A financial advisor will tell you about the tax benefits and how much premium you can expend annually. It is also advisable to appoint an insurance agent for your policies, who can do all the legwork while trying to get the claims approved and sanctioned quickly. Often a lot of documen­tation has to be submitted while submitting claims, which is best handled by someone who knows the system inside out.

Most third party insurance agencies prefer not to dabble in non-life policies, as the number of claims that they have to process is much higher than the life policies. So select an agency that will be able to expedite the claims process and has a presence nationally. Make it a point to read all the fine print. For instance, if you opt for the fidelity liability of your employees, you might be surprised to know that not all kinds of cheque forgeries or embezzlement will be covered under the scheme.

You can either go for a piecemeal or a comprehensive policy. The more incidents for which you opt insurance coverage, the higher will be your premium payment. For instance, if you want to safeguard your premises from a terrorist attack, you will have to pay a certain percentage of the overall policy scheme. 

Kinds Of Policies
Here are some of usual suspects against which you can safeguard your assets with a policy: 

“Businesspeople are not even aware of the kind of good non-life insurance offerings that most agencies have. And they procrastinate about going for it, as they feel that it is not very crucial” Sanjay Sanghvi Insurance Portfolio Manager

Burglary And Theft: This is probably the most important facet of any corporate insurance policy, besides fire. Burglary can be loosely defined as forced entry causing in loss of property or articles. Most policies cover assets contained within the business premises, stocks owned, cash, valuables, securities kept in a locked place. Some agencies have policies that is also extended to indemnify you for damage caused to insured premises as well as costs for changing locks at the insured premises resulting from burglary or even an attempted theft.

Fire: Setting up a business calls for immense investment. And this is not limited to buying a place to operate from. Equipments have to be bought, people have to hired and a whole lot of other things have to be set in place before you can commence work from there. And one spark can reduce all of this to ashes. This is where the fire liability can be handled in a corporate insurance policy. Most policies cover fire related incidents like an explosion or implosion, leakage from automatic sprinkler installations, bush fire or fire set off by earthquakes. 

Money: Most business houses have money that has to be collected from or deposited at someplace. Funds in transit can give one sleepless nights, especially if it is a substantial amount. So you can sign up for a policy that will compensate you if the money carried by you or your authorized employee is lost because of theft, accident, waylaying or any other fortuitous event. However, most policies commence with the taking over by you of the money for the purpose of transit and ends as soon as the money reaches the place of delivery. Additionally, you can also secure funds that are lying in your locker as well. This clause overlaps with the coverage of your property, so if you wish you could either go for the property or the money coverage, if you do not wish to opt for both.  

Riots: Given the prevalent political scenario of the nation, some agencies like Bajaj Allianz have extended a policy to include loss of the insured property as a result of riot, strike risks or terrorism attacks. The company also has a policy specifically devised for small business houses having building and stock value limited to less than or equal to Rs 10 lakh. The policy covers host of risks like stock in trade, building, furniture, money-in-transit, business interruption etc. and indemnifies the insured loss due to any of the perils covered.  

Plate Glass: With fancy corporate houses sporting plate glass facades, and interior designing, the chances of these fragile items breaking at sometime can never be ruled out. And rather than write it off as an unavoidable expense, you can simply opt to cover it in your policy. You can claim coverage for the plate glass located in your premises due to accidental breakage during the policy period, due to fire, breakage or any other incident, which is specified in the policy document. You will either be paid for the replacement or repair of the glass and/or paid for the cost of any temporary boarding needed 

Office Equipments: If you have spent a lot in installing office equipments, it is the first thing you should consider insuring, as machines will always breakdown due to natural or manmade circumstances. So rather than shell out the repair or replacement charges entirely from your pocket, your insurance provider can help you do so, partially or completely, as the case may be. You can also insure any external data media, software and cost for reproduction of lost data and information. 

Personal Accident: Accidents are sudden and unforeseen. They can happen to you or your employees at the workplace resulting in large financial implications. There are policies that have provisions to protect you from the losses occurring from such incidents. However, bear in mind that you will get compensation only for those people who have been specifically included under the insurance coverage. Also, this policy will benefit those employees who are handicapped while on duty, or their families, in case of their demise. 

Public Liability: Sometimes inadvertently your actions could cause a third party bodily injury or damage to property. To avoid getting into financial wrangles for the same, opt for this clause in your policy so that you can seek compensation for such incidents. 

Directors and Officers Liability: This policy is aimed at non-proprietor companies, that have gone public or have private shareholders to whom a board of director reports. This policy insures the personal assets of corporate board members and officers, as well as the company's corporate assets, from lawsuits arising out of their capacity as directors or officers of the cooperation.

Directors and officers have historically been protected from personal liability against them by a legal principal known as the Business Judgment Rule. This legal principal shields corporate directors and officers by applying the rule for mistakes in judgment (like second-guessing). As long as the director or officers has acted according to the duties of loyalty, obedience and diligence, then the Business Judgment Rule may protect the director or officer.

Interestingly, public com­panies experience more frequency and severity of claims related to shareholder issues, while both public and private companies face similar experience for employment related claims. The typical claimants of this policy are the company's shareholders, employees, creditors, clients or even competitors, in a member of the board has acted dishonestly. There is a lot of fine print involved in this clause. So it has be read and considered very carefully, so that your insuring company does not reject your claims.

Fidelity Guarantee: In today's competitive world, employees can be a company's key assets or liabilities. Especially, if you end up employing someone who causes losses to you or your customers using fraudulent and dishonest means. You can get your business covered against any direct pecuniary loss caused by act of fraud or dishonesty committed by any salaried person employed by you in the insured premises.

The term 'Fidelity Guarantee Insurance' embraces policies indemnifying employers against financial loss on account of forgery, defalcation, embezzle­ment and fraudulent conversion by employees. The object is to provide protection in respect of the default of an individual acting in some capacity such as cashier, accountant, storekeeper etc. However, you need to remember that the loss is payable up to the limit specified for the employee.

Within this clause, you can go for either the individual policy (for one individual, like your finance manager), a collective policy (for a group of people working in one high-risk division like finance or sales), or position policy (based on the designation of the person, like the general manager etc)

Travel Insurance: If overseas travel is a dominant feature of your business process, then you might consider opting for the ICICI1 Lombard Overseas Travel Insurance. The reason this policy has been successful is because it can be issued online. Which means that you can insure your employee who is traveling from your office and also pay on a per-day basis, which saves you on the premium amount. Under this insurance, you can claim for medical expenses which the insured party might have to pay or for the loss of passport or baggage while traveling. In the case of the demise of the insured, you can also claim expenses incurred in transportation of the remains back to India. However, bear in mind that medical expenses arising out of pre-existing conditions or substance abuse will not be covered. Similarly, if war or riots break out in the country where the employee is traveling, then too the insuring company is exempted from making good the loss.
 
Process For Claims
If you have to claim for a mishap, then make sure that you have all your documentation ready. This is where poring through the offer document carefully will come in handy. Also, be prepared for a wait of at least two months before your claim is approved and you get the reimbursement.
The moment a mishap, for which you are insured, occurs; make it a point to file a first information report (FIR) with the police. Without the FIR, you will not be able to file your application for payment. Next inform your insurance company about the event in writing. Attach a photocopy of the policy and if you can procure photographs of the incident as well. A surveyor appointed by the insurance company will then come and investigate about the nature of the incident and whether it fulfils all the criteria for a claim to be awarded to you. If he files a positive report, then the insurance company will send you a cheque for the insured amount.

VINITA BHATIA

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