Cash-carrying companies seek to double insurance coverage

Cash-carrying companies are seeking higher insurance cover after the government scrapped ~500 and ~1,000 notes.

Sanjay Kedia, country head and chief executive officr of Marsh India, said cash-carrying companies were expecting a spurt in liquidity and had ramped up storage facilities across India.

He added most cash-carrying companies were seeking to more than double their per-location insurance coverage. A few companies are asking for insurance limits as high as ~500 crore per location. Insurance industry executives said this was a temporary situation, only till customers had adequate cash.

Insurance companies provide coverage against theft and other contingencies to companies that manage cash and ATM machine functioning. Banks also take cover for ATM machines against theft or damage due to natural disasters and other causes. Industry sources said smaller banks that usually took cover of ~1-2 crore were now demanding cover as high as ~20 crore. This is because of the greater amount of cash being transported.

Public sector insurers are active in this segment and private players also offer cover for specialised needs. This specific cover is customised to individual needs and may cover cash in transit and personnel who are carrying the cash.

Sanjay Datta, chief, underwriting and claims, ICICI Lombard, said higher cover was being sought because of the higher number of cash transits till the situation returned to normal.

K G Krishnamoorthy Rao, MD and CEO, Future Generali India Insurance, explained with more frequent replenishment requirements, the demand for insurance would go up.