Shop­keeper’s Pack­age In­sur­ance Pol­icy

Are they a good deal?

Consumer Voice - - Contents - Subas Ti­wari & Gopal Ravi Ku­mar

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.

Salient Fea­tures

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.

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