BURGLARY INSURANCE

 

BURGLARY INSURANCE

Burglary means the illegal entry into a building with intent to commit a crime, especially theft. Willful intent to steal & cause damage is burglary. Insurance policies define burglary as the unforeseen and unauthorized entry to or exit from the premises by aggressive and detectable means with the intent to steal contents therefrom. It is a violent, forcible, visible entry and is supported by damage to the surroundings and premises.

A burglary insurance policy is a type of crime insurance that covers losses resulting from burglary.

Who can take these policies?

Owners of godowns, businesses, and residential complexes can take these policies.

Property covered:

Any movable properties like Stock, Goods held in trust, Stock in trade, cash and Valuables etc.

Scope of Cover:

Covers properties against Burglary, Housebreaking etc. involving theft coupled with violent entry or exit

Theft cover and property in open are to be insured at extra premium

Types of Burglary policies:

Full Value Insurance: Cover is for all property and complete sum insured is reckoned for premium rating

 First Loss Policies: First-loss policies are most commonly used to insure against events where a total loss is extremely rare (i.e., the burglary of all goods in a shop, godown). Examples are:

Coal in godowns

Huge Iron& Steel stocks

It means anything that cannot be easily picked up, can be covered under a first loss policy. Although the stock is huge the chances of theft and burglary are less and remote due to the surroundings, nature of stock and the financial consequence.

v  Diamonds gold jewelry precious stones are not covered under a first loss policy.

If a shop has goods, stocks worth Rs. 1 crore and can partially lose (say 25% ) at any one time due to theft or burglary  they might obtain a first-loss policy for that amount. This analysis must be made by the Insured.

Special features:

·       Reduces premium due to limited sum Insured, but limits claim to the opted Sum Insured under first loss.

·       Under a first loss policy, the maximum claim amount payable to the insured is the amount stated as the first loss. If the loss amount is more than the first loss amount, which is to be borne by the insured.

·       First Loss policies work well for policies with higher Sum Insureds

·       Condition of Partial Average is adopted for First Loss Policies

For example, sum insured is Rs.10 crore for iron and steel stocks in a godown, and then a 25% first loss sum insured comes to Rs. 2.5 crore. Probability of burglary of stock above Rs 2.5 crore is minimal. Hence it helps the insured in minimizing the premium load in a policy.

 

Declaration Policies: Where stocks are in various godowns and fluctuating periodically the insured may opt for Declaration policies. Insured to declare periodically as agreed beforehand, (whether weekly, monthly or quarterly) the value of stocks as agreed based on which premium adjustments will be made after receipt of all declarations. This is an adjustable policy.

Extra Features:

·       Riot and strike, Terrorism are Extra covers.

·       Up to 1% of Claim amount is  payable as free cover towards damage to building ,where burglary took place and premises is damaged

·       Average (Under Insurance) clause is applicable.

Exclusions:

• No Burglary Cover for Closed /Locked out Factory/ Godowns.

• Periodical Stock taking time detected shortfalls are not covered.

• Where Insured’s Family members are involved as principal in Burglary, Claim is not admissible.

Sum insured is the main factor on which premium rating and claim settlement depend on. It is therefore important to choose according to the business of the insured for optimal benefit.

We at Zen Insurance assist in choosing the right insurance cover to suit your needs . Please contact us for assistance.

Disclaimer:

Zen Insurance is an IRDAI registered broker which facilitates quick & accurate insurance broking services. We deal with only regulator approved products of insurers. We do not underwrite the products.