Readers' Corner: General Insurance

A shipment of steel scraps from Indonesia in container loads was inspected by an inspection agency before loading, packed into containers and sealed. At this stage, the shipment was done perfectly with videos of inspection, etc. When the shipment arrived at the destination port, the material inside the container was found to be bricks instead of steel scrap. Will a marine insurance cover this type of risk? If not, what type of insurance will cover such risks?

If a policy is taken for covering all risk according to the Institute Cargo Clauses–A, this type of loss is covered. If a policy is taken for covering the basic risk, according to Institute Cargo Clauses-B, this loss is not covered. For getting such losses covered, basic risk cover needs to be extended to include cover for losses due to theft, pilferage and non-delivery. 

I am the founder of a start-up. What type of insurance policy will cover frauds committed by my employees? And what types of frauds will be covered?
 

A fidelity guarantee policy covers financial losses caused by dishonest acts of employees.  These could include fraud, embezzlement, manipulation of accounts or similar acts with an intention to enrich himself and cause financial loss to the employer. 

However, the policy will cover only the direct financial loss caused by dishonest acts of the employee and not cover any consequential loss. Nor will it cover any legal liability arising out of such acts. The liability of the insurer under the policy shall not exceed the sum insured or the limit of indemnity mentioned in the policy, if any. Losses payable under the policy shall also be subject to any deductible mentioned therein. The systems and processes which the customer has in the management of his business in terms of internal check and internal control and hygiene practices like job rotation would be the key underwriting factors an insurer would consider in rating proposals for fidelity guarantee insurance.

How does cashless claim work in motor insurance? Is there a list of garages where I can take my car for service to get the cashless facility?

The procedure adopted by insurers for cashless claims remains the same as followed in reimbursement claims, except that the claim amount is directly paid to workshop so that insured does not have to shelve out money initially and then wait for payment from an insurer. You can call on the customer service number of your insurance company to avail details of cashless workshops and it will help you to identify the nearest or most convenient workshop. You can also approach the nearby branch of your insurer or check with the agent. 

Alternatively, you may visit the website of your insurer which generally lists the cashless workshops. It is desirable to intimate the claim at the call centre, though cashless workshops also help an insured in submitting their intimation to insurer. Cashless workshops also facilitate customers in submitting their documents like registration certificate book, driving licence, claim form and so on, which shall be verified by the surveyor visiting the workshop for inspection of the vehicle. Once the vehicle is repaired, workshop shall submit the repair bill to surveyor or insurer who shall respond with liability amount, that is, claim payment amount. 

The claim department also approaches an insured entity to explain assessment, claim amount and also the amount to be borne by insured, that is, insured’s share subject to terms and conditions of the policy. In case the claim amount is more than Rs 1 lakh, it is mandatory for the insured to provide anti-money laundering documents along with the CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest) form as 

applicable.

The writer is MD and CEO, Future Generali India Insurance. The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in