Commercial Line

1. Business interruption

This is a pecuniary insurance, separate from but very closely connected with material damage insurance it compensates in the form of loss of profit, extra expenses, etc as it issued in association with other types of material damage cover of commercial property risks.

The policy is operational during the whole or part of preparatory period of a new venture. In case of any accident or damage during this period which delays commencement of trading beyond the starting date, this policy covers loss of trading income, loan interest and other charges which are payable despite lack of income and increase in expenses incurred in reducing or avoiding the delay in startup.

The policy is suitable for:

• principal who shall be deprived of anticipated earnings in the event of delay in commencement of operations;
• financial institutions to the extent of their interest in the project;

Scope of cover

Essentially on average some of the damages caused by an insured peril forwarded include:

• Loss of gross profit and gross earning: sales value of production less consumed stocks, supplies and services purchased which is based on anticipated sales, cost and prices;
• Additional expensesnecessarily and reasonably incurred and wages which is paid during an interruption period as a result of an insured peril;
• Increased cost of working: costs involved in minimizing effects of delay;
• Loss of rent as a result of premises not being ready to earn rent. And special expenses involved because of delay such as advertisement campaign etc.

Exclusion

Business interruption policy as other type of policy is not issued as a standalone and if an event not covered by property insurance policy that keeps once business from operating, the add-on policy which is business interruption cannot meet the expenses stated.

Unless property insurance policy insured perils cause a damage or loss business interruption policy won't cover interim expenses in addition to absolute exclusions that exist in most policy.

2. Fidelity guarantee

Fidelity Guarantee covers the employer against the direct pecuniary loss that may be caused due to dishonest employees in the course of employment, as a pecuniary insurance, its primary function being to indemnify an employer against thefts by his own staff. Three parties are involved in the contract as against the usual two. Both the law of insurance and the surety-ship are relevant in fidelity guarantee insurance.

Type of policy cover

Various forms of policy cover are available,

1. Individual cover: the guaranteedstaffs are individually named and subject to a specified limit;
2.  Combined cover: where a scheduleof names or positions is given, either with separate sums insured, or with a floating sum insured i.e. a sum insured not divided among the insured individuals or positions, or a combination of the two.
3. Blanket cover:where the policycovers all insured’s staff, usually with separate categories inside/outside, handling/not handling cash, etc. and separate sums insured.

Scope of cover

The basic feature as a general scope of this policy is dishonest acts of guaranteed staff. 

This policy broadly covers monetary loss sustained as a result of any act of fraud or dishonesty committed by the employees in the course of performance of their duties.

Exclusion:

The policy does not cover loss:

• of stock taking shortages, trading losses, not caused by fraud or dishonesty;
• of or liability arising out of violation of any rules and regulation of government or statutory authorities;
• willful acts or gross negligence;

3. Money insurance

This class of business commonly provided for a wide range of commercial organizations on an “all risks” basis. In addition to loss of money, damage to safes and strong-rooms caused by thieves is usually covered.

“Money” means much more than legal tender, extending to include cash, coins, bank draft, currency notes, cheques, traveler’s cheque, postal order, money order, pay order and current postage stamps.

”Bank” shall mean and include bank of every description, post office, and government treasury.

“Location”:  While cash in transit remains a major element of cover, cover at other locations (including homes of specified staff and insured’s business premises) is also very likely.

Scope of cover

The policy is provides cover for two basic parts based on nature of the money:

Part one:under this section cover provided for loss of money in transit by the insured or insured’s authorized employees occasioned by robbery, theft, and any other fortuitous cause.

Money in transit has been differentiated into three categories:

1. Money for wages/ salaries/ petty cash
2. in transit from bank to premises till paid out or;
3. otherwise kept in locked safe/strong room on the premises taken from bank:
4. Money in the personal custody of insured:Money other than stated above while in transit between premises and bank:
5. Money collected by insured: during collection round up-to 48 hours from collection.

Part two:this part covers money loss by burglary, housebreaking, robbery or hold up whilst retained at insured’s premises in safe(s) or strong room.