PARA 13.2 IC 78, Miscellaneous Insurance One Liner, Chapter-9: Package Policies

PARA 13.2 IC 78, Miscellaneous Insurance One Liner, Chapter-9: Package Policies

Insurance exams offered by the Insurance Institute of India (III), consist of various papers either in Life or Non Life or Combined. Here we are providing ONE LINER IC 78, Misc Insurance  Chapter 9: Package Policies for para 13.2 and III exam . These questions will be very helpful for upcoming promotional exam in 2020.

IC 90, Human Resource Management is a very important topic in insurance promotional exam. This IC 78, miscellaneous insurance paper comes in all GIPSA exams which makes it very important.

The Article IC 78 Chapter 9: Package Policies

IC 78, CHAPTER 9: PACKAGE POLICIES

1.Shopkeepers insurance policy: This was a market agreement cover and was devised to cater to the needs of the small shopkeepers. The initial criterion was that the value of property at risk, including the building covered, should not exceed Rs. 10 lakh.

2.In the present scenario, the limit of sum insured specified is normally Rs. 1 crore and even more..

3.It is to be noted that the policy is meant for shops only. It is not to be issued to restaurants, tea/coffee shops.

4.It is not merely sufficient that the Shop and Establishment Act is applicable to the said premises but in fact it has to be a shop where there is over the counter sale.

5.Also, only because some repair work is being done it does not cease to be a shop subject to the condition that such repair work is just incidental to the main business of selling e.g. shop selling watches and clocks, where some repair work is also undertaken can be given a shopkeeper’s policy.

6.Coverage The policy cover is normally spread over eleven sections.

a)Section I Loss of or damage to building/contents (excluding money and valuables) whilst contained in insured premises by

  • Fire, lightning, explosion of gas in domestic appliances
  • Bursting and overflowing of water tanks
  • Aircraft or articles dropped there from
  • Riot, strike or malicious act
  • Earthquake, subsidence or landslide
  • Flood, storm or tempest
  • Impact damage

b)Section 2 Loss or damage to contents (excluding money and valuables) whilst contained in the premises by burglary and housebreaking

c)Section 3: Loss of money

  • Loss of money in transit due to accident/misfortune
  • Loss of or damage to money/valuables by burglary/housebreaking whilst contained in a locked safe (2% of S.I. under Section A subject to a maximum amount)
  • Loss of money whilst lying in cashier’s till and or counter in insured’s premises by burglary, house-breaking or following assault/violence on insured or his employees (1% of S.I. under Section A subject to a maximum amount)

d)Section 4: Loss of or damage to pedal cycle(s) by

  • Fire, lightning or external explosions
  • Riot, strike or malicious act
  • Earthquake
  • Flood, storm or tempest
  • Burglary, housebreaking or theft

Legal liability of insured for death/injury to third parties or damage to their property arising out of use of pedal cycle(s) up to a specified limit (usually Rs. 10000 to Rs. 25000) for any one period of insurance

e) Section 5: Loss of or damage to fixed plate glass in the insured premises by accidental means (10% of S.I. under Section A subject to a maximum amount)

f) Section 6: Loss of or damage to neon sign/glow sign by

  • Accidental external mean
  • Fire lightning or external explosion
  • Theft
  • Riot, strike or malicious act

(2% of S.I. under Section A subject to a maximum amount)

g)Section 7 Loss of or damage to personal baggage of insured or baggage in connection

with trade, anywhere in India (2% of S.I. under Section A or Rs.10,000/- whichever is less)

h)Section 8: Personal accident covers for insured/his employees

i)Section 9: Fidelity guarantee: Direct pecuniary loss suffered by the insured due to fraud or dishonesty committed by any salaried employees (10% of S.I. under Section A subject to a maximum amount)

j)Section 10: Legal liability

  • Legal liability in respect of accidental death or bodily injury to a third party or accidental damage to their property during performance of any act in connection with the insured’s business up to a normal limit of Rs.25,000/- or 5% of sum insured under Section A whichever is less, during any one period of insurance
  • Compensation to employees engaged in insured’s premises under the E.C. Act/common law

k) Section 11: Business interruption (loss of profit policy)

  • Loss of profit due to interruption in business consequent upon loss sustained by property insured in Section A of the policy, due to insured perils under that section.
  • For the cover to be allowed, the building concerned has to be of class ‘A’ construction as defined in the old fire tariff.
  1. Householder’s insurance policy: The policy comprises of 10 sections as under
  2. a) Section 1: Loss of or damage to the building and contents (excluding money, jewellery and valuables) whilst contained in the insured premises by:
  • Fire, lightning or explosion
  • Bursting and overflowing of water tanks
  • Air-craft or articles dropped there from
  • Riot, strike or malicious act
  • Earthquake, subsidence or landslide
  • Flood, storm or tempest
  • Impact damage

b)Section 2 Loss of or damage to contents (excluding money and valuables) whilst

contained in the insured premises by burglary, house breaking including larceny and theft

c)Section 3: Loss of or damage to jewellery and valuables caused by accident or misfortune whilst anywhere in India

d)Section 4 Loss of or damage to fixed plate glass by accidental means

e)Section 5: Unforeseen and sudden physical damage due to mechanical or electrical

breakdowns of domestic appliances specified in the policy and whilst contained in the insured premises

f)Section 6: Loss of or damage to television apparatus including VCR / VCP whilst contained in insured premises by:

g) Section 7: Loss of or damage to pedal cycle(s) by:

  • Fire, lightning or external explosion
  • Riot, strike or malicious act
  • Flood, storm or tempest
  • Earthquake
  • Burglary, house-breaking or theft
  • Accidental external means
  • Legal liability of the insured for accidental death/injury to a third party or damage to their property as a result of the use of the pedal cycles, up to a limit of Rs.10,000/- in any one period of insurance.

h)Section 8: Loss of or damage to personal baggage due to accident or misfortune whilst travelling anywhere in India

i)Section 9: Personal accident insurance for insured, his spouse and children as per

personal accident insurance practice

j)Section 10:Legal liability of the insured in respect of accidental death or bodily injury

to third party through fault or negligence of insured/family members up to a limit of Rs.25,000/- for any one event or during the policy period.

Legal liability as per E. C. Act /common law in respect of employees For the cover to be allowed the building concerned has to be of class ‘A’ construction as defined in the old fire tariff.

8.Common features: The common features of shopkeepers’ and householders’ policies are as follows

  • The cover under “Fire Section” is compulsory. In addition, the proposer can choose any number from the remaining covers.
  • The exceptions usual to the various types of covers, when taken as individual separate policies, apply to the corresponding sections of these policies.
  1. The policy is subject to certain common exceptions like:
  • War and allied perils
  • Wear and tear and depreciation
  • Consequential loss
  • Nuclear perils
  1. The standard conditions are applicable like:
  • Reasonable care of property to be taken
  • Cancellation with 7 days notice
  • Claims procedure involving complaint to the police authorities, immediate notice to the company and submission of full particulars within 14 days
  • Applications of principles of indemnity subrogation and contribution
  • Arbitration regarding quantum of loss only
  1. Rating
  • Each section is rated independently.
  • The total premium depends upon the sum insured, the type and number of sections covered.
  • If the insured chooses more than 4 Sections he is entitled to 15% discount in premium.
  • If he has selected more than 6 Sections then 20% discount is available.
  1. Package / Multi-peril policy for L.P.G. gas dealers: a) Loss of or damage to building and contents due to fire and allied perils like lightning, riot and strike, malicious damage, earthquake, flood, storm or tempest
  2. b) Loss or damage to the contents due to burglary / house-breaking
  3. c) Money
  • Cash-in-Transit insurance in the hands of delivery boys to a small extent and in the hands of messengers for deposit in the bank, withdrawals etc. for a larger limit
  • Cash-in-Safe/box insurance
  • Cash-on-Counter insurance

d) Pedal cycle insurance, both on damage cover and third party cover up to Rs.10, 000/-

e) Plate glass insurance

f) Neon sign / glow sign insurance

g) Baggage insurance

h) Personal accident insurance

i) Public liability insurance

j) Workmen’s compensation insurance

Doctors’ package insurance: The following cover is provided

a) Fire and allied perils in respect of building and contents Burglary / house-breaking, theft in respect of contents

b) Fidelity guarantee insurance for cashier / compounder / any other authorised employee

c) Money in transit with the doctor, his compounder or any other authorised employee

d) Loss of or damage to doctor’s kit by fire, theft or accident during visits within the municipal city limits

e) All Risks cover for ECG machine and such other equipment pertaining to doctor’s profession

f) Signboard

g) Professional liability insurance

Discounts: The coverage under “Section A” is compulsory.

If two sections are covered a 10% discount in premium is available under the policy. If more than 2 covers are taken a discount of 15% is allowed.

  1. Office protection shield(General office): The policy offers coverage under 12 sections

a) Section I: Building (for owners)

  • Building including landlord’s fixtures, fittings, boundary wall and fences
  • This section covers fire and allied perils including EQ and STFI perils

b) Section II (A): Office contents

  • Furniture, fixtures, fittings, electrical appliances, clothing and personal effects of insured or employees
  • Perils covered – As per Section I, including burglary, robbery and dacoity
  • Exclusions – As per Section I including erasure or breakdown of information contained in data carrying materials and/or consequential loss of any description

c) Section II (B) Tenants’ liability

  • Liability as a tenant for damage to office premises including fixtures and fittings
  • Perils covered – As per Section II (A)

d) Section III Money

  • Loss of money while in transit, on the premises during office hours and in safe after office hours.
  • Perils covered – Any accident and/or misfortune

e) Section IV Fixed glass and sanitary fittings including damage to frames

Risks covered – Accidental/Breakage

f) Section V Fidelity guarantee of any salaried person employed by insured

Risks covered – Pecuniary loss caused by fraud and/or dishonest act.

g) Section VI (A) Electronic equipment and data carrying material

i)Risks covered – Unforeseen sudden physical loss or damage due to any cause other than those specifically excluded

ii)Exclusions

  • 10% of each claim
  • Pre-existing faults or defects, wear and tear
  • Loss due to climatic conditions
  • Maintenance cost
  • Loss or damage for which insured is contractually liable
  • Defects or design or material for which suppliers are responsible

h) Section VI (B) Cost of re-instatement of data and programme

i)Risks covered – As per section VI (A)

ii)Exclusions

  • 5% of each claim
  • Data carrying materials not stored as in makers instructions
  • Erasure and corrupted from unidentifiable occurrence
  • Intrinsic value of the data
  • Cost incurred for false programme or alteration of programme

i)Section VI (C) Portable computer whilst being carried anywhere in the world

Risks covered – As per Section VI (A)

j)Section VII Additional expenses of rent for alternate accommodation if premises occupied is damaged and declared unfit for occupation

Perils covered – As per Section II (A)

k)Section VIII Personal accident insurance for self and employees

Risks covered – Death, permanent total or partial disablement and temporary total disablement due to accident.

l)Section IX: Breakdown of office appliances and electrical and mechanical gadgets

Risks covered – Electrical and mechanical breakdown

m)Section X Loss or damage to baggage belonging to self and/or employees whilst on journey anywhere in the world

Risks covered – Any accident and/or misfortune.

n)Section XI Liability

  • Public liability and workmen’s compensation – Death or bodily injury and/or damage to property of third party and liability for workers
  • Risks covered – Negligence of self and/or any family members permanently residing with him

o)Section XII Mediclaim: Expenses incurred during hospitalisation in any hospital or recognised nursing home.

  1. Office protection shield(General office Sections I and II (A) are compulsory for owners (building) insured
  • Section II (A) compulsory for tenant (building) insured
  • Minimum number of sections to be insured by owner is five
  • Minimum number of sections to be insured by tenant (building) insured is four
  • All the exclusions, warranties and conditions applicable to individual sections are applicable to the package policy
  1. Office protection shield(General office) Discount for sections
  • For additional two sections above minimum sections described in c & d above (10% discount on premium)
  • For additional four sections (15% discount on premium)
  • For additional seven sections (20% discount on premium)
  1. Office protection shield(General office Renewal Claim free discount
  • First renewal (5%)
  • Second renewal (10%)
  • Third renewal (15%)
  • Fourth renewal (20% maximum)
  1. Adhikari suraksha kavach: This is a personal package policy designed for executives and/or businessmen
  2. a) Section I Laptop / Portable computer
  • The company will indemnify the insured in the event of any unforeseen sudden physical loss or damage due to any cause, to the portable computer belonging to the insured and in the personal custody of insured, whilst anywhere in the world for the purpose of business or profession.
  • Excess: 10% of claim amount or Rs.5000/- whichever lower.

b) Section II Cellular phone

  • The company will indemnify the insured for the loss of or damage to cellular phone by theft and burglary, fire, lightning explosion, malicious or accidental damage due to external means, earthquake, flood, storm or electrical and mechanical breakdown.
  • Excess: First Rs. 1000/- of each and every claim.

c) Section III Loss of cash: In the event of loss of cash due to accident or misfortune happening during the currency of the policy when the insured is on official duty or on outstation tour, the company will pay to the insured the amount of such loss not exceeding the sum Insured and up to a maximum of Rs.5000/- during the policy period.

d) Section IV Baggage insurance

  • In the event of damage to baggage due to accident or misfortune whilst on journey, anywhere in the world, the company will indemnify the insured in respect of such damage up to the actual value at the time of happening of damage but not exceeding the sum insured in any one period of insurance.
  • Excess: First Rs.500/- in each and every loss or damage.

e) Section V All risks (Jewellery & Valuables): The company will indemnify the insured in respect of loss or damage to valuables caused by accident or misfortune whilst anywhere in India.

  1. f) Section VI Personal accident insurance: Provides a scale of benefits for lumpsum payment of accidental injuries resulting into various disabilities defined in the policy including transportation of insured’s dead body to the place of residence, reimbursement of ambulance charges.

g) Section VII Mediclaim

  • Re-imbursement of hospitalisation/domiciliary hospitalisation expenses incurred for illness/diseases or injury sustained.
  • Benefits: As per standard mediclaim policy (individual)

h) Section VIII Personal liability

  • The company will indemnify the insured against legal liability in respect of accidental death or injury to a third party or his property caused by fault of his property or caused by fault or negligence of the insured.
  • Excess: Rs.2000/- in respect of third party property damage
  1. Minimum three sections are to be taken
  • If more than four sections are taken then 10% discount is allowed except on mediclaim section.
  • However, for counting the number of sections, the mediclaim section is also to be taken into account
  1. Package policy for credit – societies: The covers provided are

a)Section I Building & contents – Fire and allied perils

b)Section II Office contents – Burglary

c)Section III Money and pledged gold

  • On premises – Fire and allied perils, burglary, hold-up
  • In transit – Loss, theft due to negligence or fraud of employees or otherwise
  • Note: The cover applies to dishonesty of employees, appraisers or pigmy collectors

d)Section IV Personal accident cover

e)Section V Pedal cycle

f)Section VI Plate glass & sanitary fittings

g)Section VII Mediclaim (individual basis)

  1. Complete family protection plans
  • This package policy protects the entire family and their home from any kind of danger that may befall it.
  • It provides health insurance, home insurance and travel insurance etc. all under a single plan.
  • There are 8 to 10 sections under this policy and the client is required to choose a specified minimum number of sections.
  • If the client opts for more than the specified number of sections, he is entitled to a discount on the price.
  1. Business package policies
  • Package policies have been designed to cover business enterprises (any manufacturing or trading unit) to cover the varied risks in their business.
  • The risks covered under these policies include damages caused by fires and other related perils, earthquakes, terrorism, loss of rent and engineer’s fees. Cover is also provided for temporary relocation of the business in case of these dangers.
  • In addition there are other covers that can be opted for by the businessman at his discretion. These include loss due to robbery, loss of stored money or money being transferred, equipment and machinery insurance, employee fidelity and workman’s compensation

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