This IGI policy is designed for business premises and covers stock in trade, goods held in trust or on commission, fixtures & fitting and utensils of trade.
- The scope of cover is limited to burglary and house breaking only. It does not include related perils like larceny which are not covered by the definition
- The claim amount reduces sum insured every time a claim is paid. However the sum can be reinstated on payment of pro-rata additional premium
- Property insured is covered only when it is lost from the insured premises and not from any other location
In the case of goods, which are of low value in high bulk, (such as cotton in bales, grain, sugar etc) the risk of losing the entire stock on a single occasion is considered remote. The value that can be burgled is then ascertained as Probable Maximum Loss and the premium is charged for this maximum probable loss while covering the entire stock at risk.
- There is no tariff regulation and each case is considered on merit. The determining factors include the client himself, situation of risk, the type of property (whether easily saleable in the market), security measures & precautions taken and previous claims experience
- The benchmark rate varies between 0.35% to 0.75% (for a standard risk)
- With regard to rating of the risk in first loss policies, it depends on the proportion the maximum Probable Loss bears to the maximum sum insured with appropriate discount
The proposal form should be completed providing very detailed information on the location of the risk and claims history. Often inspection of the premises and its neighbourhood will be carried out. Premises located in isolated areas or the adjoining premises and such which are not occupied in the night (like educational institutions or places of worship) are not favorably considered.
Why You Must Buy This Policy
The policy is vital especially when the property is pledged with a financial institution. Normal security arrangements are necessary for an insurer to accept the proposal for insurance. Even if an elaborate security system is planned, the cost of such system will not be as expensive as the premium paid for the Burglary policy, as the risk is dispersed and distributed among the insuring public. In any case, good security system will benefit the insured in fixing the premium rating.