Zen Vichaar

    Insurance protects from the unforeseen whether it is life or property, the unexpected always needs cover. Insurance policies offer the required financial assistance when one suffers a loss. Fire insurance policy is an     important safeguard against fire and allied perils. Damage to property due to natural disasters is covered under the fire policy. However, it is necessary to know the policy contents, and reading the fine print of the policy is the best method to come to an understanding of the coverage offered. We often see the exclusions under the policy written in fine print and ignore it. Understanding the exclusions under the policy gives us     a wider comprehension of the policy coverage. A quick look into the details of these exclusions will highlight the modus operandi of the cover offered. Policies may be then customized to accommodate the specific requirements of the policyholder. Fire insurance policy does not cover the following risks. Spontaneous combustion T

                                     No fault liability is often heard in insurance policies and as the title suggests, imposes a liability that accrues without one’s fault. No fault liability means liability of a person even without any negligent act on his part and even if he has taken due care and caution. This term is usually found in motor insurance where compensation for an accident is paid on no fault basis. The driver of a vehicle exercises ample caution while driving yet the inevitable happens and a   third party is injured or dies. To safeguard from such unforeseen and unexpected accidents, Motor Vehicles Act 1988 has laid down the compensation to be payable for the victims of the accident. No fault liability, is known as strict liability, compensating victims without having to establish the cause of accident or prove the negligence of the driver of the vehicle.   Section 140(1) of the Motor Vehicles Act 1988 states that: "Where the death or permanent disab

  Public liability insurance policy is an insurance cover, for liabilities that arise in course of business operations. In short it is liability to the public who come to your premises for the purpose of business. Any third party can claim compensation if they are injured or if their property is damaged. The business owner has to incur financial loss and this also hampers the smooth flow of business. Public liability insurance Act policy is for providing immediate compensation to those affected by the accident. This insurance applies to business owners handling /manufacturing     hazardous substances. For example, if a stock of goods falls on a customer visiting a shop and he suffers an injury and if the customer claims for injury/damages the business owner is liable. This can be safely insured under a public liability policy. Similarly, where there is manufacturing /handling of hazardous goods the business owner must compulsorily buy a Public Liability Act policy. This policy i

               Cumulative bonus is a benefit offered under health insurance plans, to the policyholders for maintaining zero claims throughout the policy period. Offer of cumulative bonus is either in the form of an increase in the sum insured or a discount on the policy premium, at the time of renewal of policy. However, there is a cap on the cumulative bonus offered and is mostly restricted to 50% of the sum insured. How does cumulative bonus work?   For example, sum insured under a health insurance policy is Rs 5 lakhs, the cumulative bonus is 10% of the insured sum for each year. First year sum insured is: Rs 5 lakhs Second year sum insured if no claim is made: Rs 5,50,000/- Third year sum insured if no claim is made: Rs 6,00,000/-   One must plan their health insurance program in such a way that the cumulative bonus is retained for major health claims. Also, it is beneficial to handle small claims as the cumulative bonus adds to the sum insured and increases the su

                             To get back business to normal after a loss, needs a lot of finance, right from removing the debris, repair of machines, maintenance of process etc. Fire policies usually cover the losses due to insured perils and policy pays the loss amount. Apart from this, the expenses for cleaning up a damaged premises are high and the debris removal clause in fire policies provides the right cover for such expenses. What is paid under debris removal insurance? Debris removal insurance is an extension under the standard fire policy to cover the costs and expenses of removing debris if an insured property has been destroyed or damaged by an insured peril.  If a fire breaks out in a building complex it leads to damage of the building and the surroundings. Removal of debris is the next step which involves money and labor. Debris removal insurance pays the cost of removing debris that’s been left behind. Policies with a debris removal provision cover only costs a

  Fire policies - condition of average clause Insurance policies are governed by a set of conditions and clauses. One of the most important clauses in property insurance policies, is the condition of average clause. The clause ensures that the insured ‘s property is put to “as is where is” condition after a loss. The condition of average states that: If at the time of loss or damage, the property insured is collectively of a greater value than the sum insured thereon, then the insured shall be considered as being his own insurer for the difference and shall bear a rateable proportion of the loss accordingly. From an insurer’s viewpoint this clause is paramount as it is instrumental in deciding the amount of claim vis a vis the policy sum insured, along with other factors. How does the clause work? At proposal stage, value of the property is based on the prevailing market rate and the appreciation of property. However, the value of the property may depreciate with age and he

Directors of a company are responsible for major decisions that impact many.   Since they are trustees of the company’s assets and funds, they have a greater responsibility and have to exercise due diligence in the discharge of their duties and in decision making.   Any wrongful act committed such as errors and omissions, neglect or breach of duty that could lead to financial liability and the threat of civil and criminal action, for the company and to the director/officer himself. In order to protect against such risks, companies take a Directors & Officers Policy or a D&O policy. This policy protects directors and officers from legal claims as a result of any wrongful actions committed by them when performing their duties. In recent times companies are keen to utilize the expertise of outside directors which is called outside directorship. These outside directors are not directly in the rolls of the company. Such outside directors are enrolled for their expertise and