Kerala launches insurance cover for MSME sector to safeguard businesses

In a boost to Kerala's thriving MSME sector, the state government has introduced a comprehensive insurance scheme covering Micro, Small, and Medium Enterprises.

This initiative aims to safeguard these businesses from various risks and instill confidence in them to thrive in a competitive business environment, an official release said here.

The Department of Industries and Commerce formalised agreements with four public sector insurance companies in the presence of Minister for Industries, Law, and Coir, P Rajeeve.

Emphasising the importance of this initiative, Rajeeve said this was an upfront initiative that will provide financial protection to MSMEs against all kinds of risks that can have a detrimental impact on their businesses.

As of now, Kerala boasts over three lakh MSMEs, out of which approximately 1,40,000 have registered as part of the government's Year of Enterprises initiative.

However, only around 15,000 of them have insurance coverage against various risks.

Suman Billa, Principal Secretary, Industries, and NORKA, noted that this insurance scheme will not only strengthen the industrial and investment ecosystem of the state but also boost the confidence of entrepreneurs.

Director of the Department of Industries and Commerce, S Harikishore, stressed that the insurance scheme will provide crucial support to MSMEs in recovering from unforeseen risks they might encounter.

The insurance scheme covers a range of risks, including natural disasters, fire accidents, theft, accidents, and market fluctuations, all of which can lead to significant financial losses for MSMEs.

All MSMEs in the manufacturing, service, and trade sector with UDYAM registration in Kerala, and enrolled in the "Bharat Sookshma/Laghu Udyam scheme" from any of the four public sector insurance firms beyond April 1, 2023, are eligible for benefits under the scheme, the release said.

Enterprises are eligible for a reimbursement of 50 per cent of their annual premium, with a ceiling of Rs 2500.

MSMEs can purchase the insurance policy by paying the full annual premium, after which they should submit the application for reimbursement to the concerned DIC through the online portal, along with supporting documents.

The scheme will be implemented through the District Industries Centres (DICs), which will process the applications and reimburse the eligible assistance directly to the bank accounts of MSMEs.