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Interactive Session
My friend Rajesh owns a small office to run his business, wherein he has employed 11 staff. Recently, two of the laptops in his office were stolen, which lead to a lot of problems to his staff (directly – loss of data, unavailability of laptops to work upon) and his clients (indirectly – in terms of delayed reports, deliveries etc). He then, started thinking seriously about insuring his office, which till now, he has been neglecting, thinking it would not happen to him.
Subsequently, he called upon an insurance advisor to clearly understand what all he should cover and how to do it. It also ended up clarifying and removing some of his myths and doubts about office insurance. The summary of his discussion with the advisor has been provided below:
Rajesh: Hi, I am Rajesh. I was the one who requested you to meet me, regarding insuring my office.
Advisor: Hello sir, my name is Nishi. Pleased to meet you.
Rajesh: Thank you Nishi. I do not have much idea about what and how to insure in my office. I need your guidance on this. Can you please let me know which options are available in the market and which one I should opt for?
Nishi: Before you decide on what cover to buy, what is important to understand is what cover you actually need. Otherwise, you might end up getting insured improperly while spending higher on not needed covers.
Rajesh: You sound right. So, how do I know which covers do I need?
Nishi: It is actually simple. You need to know what kind of losses you think your office might face. For example, if you think, your office area can face flood or inundation, then you should opt for fire cover. Similarly, as you have yourself mentioned earlier about some items burgled form your office, you should opt for burglary cover too.
Rajesh: OK. This leads me to believe that first I need to be clear on what losses / damages my office may face. Since you already meet and insure a lot of other offices like mine, you might already be aware of most of this. My task would be easier if you could provide me a list of such possible losses from where I could choose.
Nishi: Sir, below is the list of some of the perils/hazards from which you could choose which all are applicable in case of your office insurance.
| Fire | Burglary | Terrorism | | Flood / Inundation | Theft | Additional Expenses of Rent | | Lightening | Problem to electronic Equipments like PC, Laptops, Other equipments | Illness of employees | | Explosion | Accidents to employees | Cash in safe in office | | Earthquake | Damage to glass in building | Cash taken to/from bank | | Riot / Strike | Dishonesty by employee | Malicious Damage | | Storm / Tempest | Fraud by employees | |
Nishi: Sir, there are many more possibilities; the ones presented in this table are more common to offices like yours in this area. Now let me know, which ones you think can happen to you.
Rajesh: Now that I see the list, there seem to be many. I think my office is prone to flood. There are chances of earthquake. Strikes are common due to political parties presence, this being a state capital. Burglary has already happened. Then chances of problems with laptop are always there. During strike, I always fear that someone might just throw a stone shattering the glass of my office. Terrorism is a real threat now a day for anyone and everyone. However, I am not sure what is the difference between burglary and theft?
Nishi: Let me answer your question first. Burglary is theft accompanied by visible, forcible entry and/or exit. If there is no visible forcible exit/entry, it is considered theft.
Rajesh: OK
Nishi: You mentioned many of the above as possible risks to your office. But you have not mentioned accidents to your employees and about cash. I assume that you consider them completely safe.
Rajesh: Accidents might happen with employees, but I am not clear how that can be a risk to my company. Similarly, our company hardly does any cash business. We mostly do it through internet banking. However, dishonesty is a possibility.
Nishi: OK. Now to cover for the possible risks that you have mentioned, a set of covers need to be taken. Let me mark on the list which cover shall be needed for what risk/peril/hazard.
| Fire | Fire | Terrorism | Terrorism extension to Fire cover | | Flood / Inundation | Fire | Additional Expenses of Rent | Additional Rent Extention to Fire Cover | | Earthquake | Earthquake extension to Fire cover | Problem to electronic Equipments like PC, Laptops, Other equipments | Electronic Equipments / All Risks Cover | | Riot / Strike | Fire | Dishonesty by employee | Fidelity cover | | Burglary | Burglary | Fraud by employees | Fidelity Cover | | Theft | Theft extension to burglary cover | Damage to glass in building | Plate Glass Cover |
Others, not mentioned by you have been left out. Now this clarifies that we need to have Fire, Burglary, Fidelity and Plate Glass cover. In addition to this, if you wish to provide healthcare benefit to your employees, you may opt for group mediclaim cover.
Rajesh: That I have already taken earlier.
Nishi: OK. We need to ask one more question. Do you feel that your clients might file a legal complaint leading to financial compensation for errors on part of employees?
Rajesh: Yes. In fact one of my customers threatened me to sue if we do not compensate for his losses, which arose because of one mistake in our recommendation reports to the client. Then we paid him approximately Rs 2 lack to settle out of court.
Nishi: Then you might think of opting for applicable Liability cover. This shall provide you cover against such legal liabilities as well as the fees of court proceedings.
Rajesh: Oh, that’s great. I did not know such a cover exists. But is not it that we will have to buy so many policies for taking cover of one office. That is going to be cumbersome I guess.
Nishi: No sir. There are policies in the market which take care of all your needs in one single policy, thereby making it convenient and easy to process and handle. It also reduces your transaction cost.
Rajesh: Wow, I am happy to hear that. Can you suggest me on such option?
Nishi: You may evaluate the Corporate Cover product offered by ICICI Lombard General Insurance Company. This can offer you all such covers within one policy.
Rajesh: OK. But why are you recommending product by ICICI Lombard?
Nishi: Because not only they are a very well known reputed brand but also the fact that ICICI Lombard is the number 1 private general insurance company in India coupled with their rating as iAAA by ICRA which means they have the highest claim paying capacity makes them unmatched in the market. Also, they are very competitive in rates, while their service standards are higher than industry standards.
Rajesh: You pretty much summed up the vital parameters to decide which company to go for. I would prefer to go for a well known company which is highly rated for claim paying capacity. I don’t want to face a situation wherein when I need my insurance back-up, the insurer is not able to provide the services/support.
But how do I get the policy from ICICI Lombard.
Nishi: It is very simple. You may provide your contact details at their website (click here) or you may call their 24 X 7 toll free call center no (please provide the no). Someone form the company shall contact you in person, explain everything you need to know and then tell you applicable premium. You can then and there give them a cheque and soon enough you will get your policy. You would get a “delivered to your door” service.
Rajesh: That’s so pleasing to know. It saves me a lot of time and hassles. Thanks a lot Nishi. I appreciate your guidance and suggestions. You have been a very helpful.
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