World Print Hub webinar demystifies insurance

By 20 Jan 2022

Mumbai Mudrak Sangh and World Print Hub conducted a webinar on fire insurance in India. Dhananjay Date, insurance specialist spoke about the importance of insurance, loss of profits, period of indemnity.

Dhananjay Date: We need insurance when there is a claim - not otherwise

On 12 January, Mumbai Mudrak Sangh and World Print Hub conducted a webinar on Fire Insurance in India: Types, Coverage, Claim and Exclusions where Dhananjay Date made a hour-long presentation.

Date helped the attendees grasp the basic concepts. He said, "insurance is a public fund which spreads risk." He added, "If more people contribute to the public fund, then lower is the cost of contribution." Therefore the spreading of risk can be between a group of people or over geographical locations.

Date shared with the delegates that the aim is to put anybody who has suffered a setback back into the position as the person was before the calamity. He said, "Insurance is based on utmost good faith and is parking of funds for a promise." He told the audience that "We need insurance when there is a claim - not otherwise."

He spoke about the types of insurance policy. He stressed that it should be based on "reinstatement value and not market value". Also he cautioned the audience that "the policy should not be under insured, otherwise there will be a problem while settling the claim."

Date explained the terms "excess" and "franchise" in insurance. He shared the definition of the terms: Excess means insurance will pay the claim amount less the excess amount limit set; and franchise is a provision whereby the insurer will not pay unless the damage exceeds the franchise amount set.

Also, he spoke about how to approach the IRDA regulatory body with a case with respect to the insurance issuance which is not complied with. Date mentioned that the value of claim is settled by IRDA or there is an Insurance Ombudsman.

Another important intervention was about loss of profits as well as consequential loss and business interruption policy. date cautioned the online gathering that "it cannot be taken on its own. It has to be taken as an endorsement to the main policy."

He implored the gathering to ensure that "the period of indemnity has to be defined." Also everyone should maintain formal documentation of eMails and a written form of communication with the insurer.

His presentation was followed by a Q&A session during which delegates shared their problems; and Date provided "easy-to-grasp solutions".

Dhananjay Date has worked with New India Assurance corporation and has headed the Swiss Reinsurance corporation. Apart from that, he was on the merit list of the Indian Air Force Officers’ Selection Course and appointed pilot officer. At present, he sits on the board of Kotak Insurance.

Constructing a set of terms and conditions

  • Keep it simple. The prime motor for being in business is to create profit and wealth and many lose sight of the fact that all documentation, including the insurance contract, is part of the process. 
  • Understand the policy. Consultants charge for their time and so it’s far more cost-effective to think about what terms you want in a set of terms and conditions before talking the matter through with the company.
  • Make insurance a part of your brand. Just as firms have a corporate identity, so that identity should be conveyed through your insurance policy.
  • Educate your team. There is a danger that staff may use the standard terms without due diligence. Ensure everyone knows the liability. Relying on terms and conditions can be likened to locking the stable door after the horse has bolted as you’ll have to chase the monies with a threat of legal action.
  • Plan for the worst. Apply thought to how you will actively pursue an insurance contract. Will you go to law or could alternative dispute resolution and mediation work better? It’s entirely possible that there is a genuine fault at your end which isn’t being communicated. The key is: Be prepared, always.

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