Bharat Sookshma Udyam Suraksha Policy

 

A new business venture needs attention in a lot of areas. Finance, infrastructure, permissions, regulations- the list is endless. It is also important to secure the venture from losses due to unexpected events that can result in a financial loss. Insurance is the safest method of protection from such unforeseen losses. The

Bharat Sookshma Udyam Suraksha policy is designed to meet the specific needs of small businesses, MSMEs or Micro, Small and Medium-sized enterprises.

 

What can be covered under this policy?

 

 The Bharat Sookshma Udyam Suraksha policy covers all the assets of a business such as:

 

·                 Building with its basements, fittings and fixtures, garage, lifts, air conditioning systems, security systems, electric installations, fire sprinkler systems and other structures that are located in the business premises

·                 Plant and machinery, spares, accessories

·                 Stock of goods which includes finished goods, semi-finished goods, stock in process and raw material, packing material etc.

·                 Other items like furniture, office and electronic equipment, canteen and kitchen equipment, computers etc.

 

 

Who can purchase this policy?

 

Business owners, tenant doing business on the premises, lessee of the premises; where the value of all insurable assets at any one location is not more than Rs 5 crores at the policy commencement date.

 

If the value of insurable assets is more than 5 crores at the Bharat Sookshma Udyam Suraksha policy commencement date this policy is not given to such assets and another policy may be opted. So, the maximum sum insured for all valuable assets allowed under this policy is Rs 5 crores.

 

 If the value of insurable assets exceeds Rs 5 crores during the policy period then Bharat Sukshma Udyam Suraksha policy will be replaced with the applicable policy on expiry of this policy.

 

 

What type of small or medium businesses can be covered under the Bharat Sookshma Udyam Suraksha policy?

 

·       Offices, hotels, shops, industrial/manufacturing risks

·       Utilities located outside the compound of industrial/ manufacturing risks

·       Storage risks outside the compound of industrial/ manufacturing risks

·       Tank farms/Gas holders outside the compounds of industrial/ manufacturing risks

 

All the businesses listed above and with sum insured up to Rs 5 crores  can be covered under the policy .

 

 

Which unexpected events does the policy cover?

 

The Bharat Sookshma Udyam Suraksha policy will pay for physical loss or damage, or destruction caused to insured property by the following unforeseen events.

 

1. Fire

 

 2. Explosion or implosion

 

3. Lightning

 

4. Earthquake, volcanic eruption, or other convulsions of nature

 

 5. Storm, cyclone, typhoon, tempest, hurricane, tornado

 

 6. Subsidence of the land on which your premises stand, landslide, rockslide.

 

 7. Bush fire, forest fire, jungle fire

 

 8. Impact damage of any kind

 

 9. Missile testing operations

 

 10. Riot, strikes, malicious damages

 

11. Acts of terrorism (coverage as per terrorism clause)

 

12. Bursting or overflowing of water tanks, apparatus and pipes

 

13. Leakage from automatic sprinkler installations. Damage due to repairs or

      alterations in the building in which your business is located

 

14. Theft within 7 days from the occurrence of any of the above insured events

 

 

What is the basis of sum Insured in the Bharat Sookshma Udyam Suraksha policy?

 

i)                 For building, plant and machinery, furniture, fixture and fittings and any other contents: reinstatement value

ii)               for stocks:

a) For raw material: landed cost at your premises.

b) For stock in process: input cost of the stock at the time of damage

 

c)For finished stock: the manufacturing cost of the finished stock

 

The important features of Bharat Sookshma Udyam Suraksha policy

 

The Bharat Sookshma Udyam Suraksha Policy covers the property relating to one’s business. Policy pays for financial loss caused by unexpected events which result in physical loss, damage or destruction of building and structures, plant and machinery, stock and other assets relating to business. This policy offers three types of covers:

     Standard Cover for the building and structures, plant and machinery, stock and other assets of the business.

     In built covers for loss or damage and expenses for additions, alterations or

      extensions: property that is acquired or added during the policy period

·       Stocks on floater basis: Loss to stocks located at more than one named location.

·       Temporary removal of stocks: Loss to stocks temporarily removed to other

           premises for fabrication, processing or finishing up to 10% of value.

·       Cover for specific contents: 

·     o   Cover for money up to Rs 50,000 during the policy period, cover for documents such as deeds, manuscripts, business books, plans, drawings, securities etc.

o   Cover for computer programmers, information and data up to Rs 5 lakhs during the policy period.
o   Cover for personal effects of employees, Directors and visitors up to Rs15,000 per person for a maximum of 20 persons during the policy period.
o   Startup expenses: Start-up cost or expenses incurred, consequent upon a loss or damage due to insured events up to ₹ 1 lakh during the policy period.
o   Professional fees: Costs incurred to draw up a revised plan reasonable fees of architects, surveyors and consulting engineers up to 5% of the claim amount are paid under the policy.
o   Cost of Removal of debris: reasonable expenses for removal of debris up to 2 % of the claim amount.
o   Costs compelled by municipal regulations: Additional cost of reconstruction of property incurred solely for complying with municipal regulations.

 

 

Additional covers (add-ons) other than the standard add-ons are available and can be opted however coverage under add-ons can differ from insurer to insurer.

 

The premium for the insurance depends on the

·       Nature of insured property such as building, plant, stock etc.

·       The amount of sum insured.

·       The nature of your business.

·       Various factors that define the risk profile.

 

 Period of policy is one year, ideally the policy is suited to small scale business operations and policy offers a comprehensive cover for the assets at risk.

 

 

We at Zen Insurance assist in a complete understanding of the various insurance covers offered. Contact us for assistance.

 

Disclaimer:   

Zen Insurance Brokers 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.