Shopkeeper’s Package Insurance Policy
Are they a good deal?
Are they a good deal?
In November last year, during Diwali, a massive fire broke out in Guwahati city’s commercial hub, Fancy Bazar, cutting through more than 40 shops and several houses. While the damage was estimated to have run into crores, just about 20 per cent of the shops that bore the brunt of the fire might have had some sort of insurance cover. Typically, small establishments with meagre earnings shy away from getting an insurance policy. However, there are also instances where bigger businesses either do not bother taking a cover or miss renewing an existing cover. Fact, though, is that the shopkeeper is as vulnerable as any other when it comes to guarding valuables and assets from unpredictable mishaps and disasters. What follows is an analysis of package insurance policies available for shops and shopkeepers, and whether they really reduce the risk factor. This report also looks at the types of cover offered in a package policy. Does coverage of additional risks entail additional premium or are these covered on the basic premium?
Large business houses typically opt for separate policies for different categories of risks as the complexities involved are high and the size of the risk leads to a larger premium, due to which it makes sense that each risk be handled under a specific policy. In case of smaller businesses, the sum insured for the individual risks is low, leading to a small amount of premium. Here, it becomes costineffective and administratively cumbersome to issue individual policies for different risks. Therefore, utilising the high level of standardisation possible and the cost-effectiveness as well as administrative ease, insurance companies have drawn package covers for businesses.
A package policy is a single policy combining the various insurance requirements of shopkeepers. It may – cover loss of your business money while in transit, safe, and cashier’s till cover electrical and mechanical appliances against damage due to electrical and mechanical failure cover loss of publicity material/equipment such as neon signs, signages, and hoardings compensate for loss or damage to data, datacarrying material, and software What this translates into is: Fire and allied perils cover Burglary cover (violent entry, theft, robbery) Cover against money in transit (outside business premises) Cover against plate glass (glass counters, show display) Additional risk covers The above risks are all covered in a shopkeeper’s package policy offered by select insurance companies. However, the sum assured and the premium payable will vary due to the risk factor envisaged and the underwriting guidelines of companies.
Let us understand the inclusions generally offered under the various sections.