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IRDAI mandates Insurers to offer 3 Standard Insurance Products to Cover Risk of Fired & Allied Perils

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IRDAI asks insurers to offer 3 standard productsInsurance Regulatory and Development Authority of India (IRDAI) has mandated General Insurance Companies to offer 3 standard Insurance Products  namely – Bharat Griha Raksha, Bharat Sookshma Udyam Suraksha & Bharat Laghu Udyam Suraksha to cover risk of fire & allied perils from April 1, 2021.

i.The 3 policies will replace the Standard Fire and Special Perils (SFSP) Policy.

ii.IRDAI has stated that the process of bringing Fire and Allied Perils Insurance business out of All India Fire Tariff, 2001 will be completed by April 1, 2021 for certain businesses like dwellings, micro level & small level enterprises.

Gist of 3 Policies:

Bharat Griha Raksha:

i.It covers Home Building and Home Contents.

ii.It will also cover dangers like fire, natural catastrophes, impact damage of any kind, riot, strike, malicious damages, acts of terrorism & bursting and overflowing of water tanks within 7 days from the occurrence of the event.

iii.For General Home Contents , without any need for declaration of details 20% of the Sum Insured for  the Building (subject to a maximum of INR 10 Lakhs) will be covered.

iv.By declaring the details, the insured can opt for a higher sum for general Home Contents.

v.Provides complete waiver of Underinsurance.

The policy offers two optional covers, namely

  1. Insurance for Valuable Contents like jewellery and curios.
  2. Personal Accident of the insured and spouse due to an insured peril under the policy.

Bharat Sookshma Udyam Suraksha:

i.This policy provides cover for Building/Structures, Plant & Machinery, Stock and other assets of enterprises whose total value at risk at one location is upto INR 5 Crore.

ii.It provides cover for Start-up expenses (following a loss), payment of professional fees for Architects, Surveyors & Consulting Engineers, Cost for removal of debris & costs.

iii.It will be essential for the financial protection of Micro, Small and Medium Enterprises (MSMEs).

iv.It waives underinsurance to the extent of 15%.

Bharat Laghu Udyam Suraksha:

i.It provides cover for Building/Structures, Plant and Machinery, Stock where the total value of risk at one location exceeds INR 5 crore but does not exceed INR 50 Crore.

ii.The policy covers a range of perils similar to the policy  meant for covering micro level enterprises.

iii.It can be taken for all types of risks such as offices, hotels, industries & storage risks.

iv.It will be useful for financial protection of MSMEs.

Recent Related News:

i.On September 24, 2020,  IRDAI has identified Life Insurance Corporation of India(LIC), General Insurance Corporation of India(GIC) and The New India Assurance Co. Ltd.(New India Assurance) as Domestic Systemically Important Insurers (D-SIIs) for 2020-21.

About Insurance Regulatory and Development Authority of India (IRDAI):
Chairman – Subhash C. Khuntia
Headquarters – Hyderabad, Telangana