Insurance policies are essential tools for individuals and businesses to protect their assets and financial well-being in the event of unforeseen events. The Bharat Sookshma Udyam Suraksha Policy is designed to provide coverage for small and medium-sized enterprises (SMEs) in India. This policy offers protection against various risks that can lead to partial loss or total loss of insured property. If you own an MSME, you may want to consider this policy to help you protect your business.
There are various aspects to such a comprehensive general insurance plan. There is a need to have a clear understanding of these for the policyholders. Let’s look at partial loss and total loss, and what these terms mean in the context of this policy.
What is Bharat Sookshma Udyam Suraksha Policy?
This MSME insurance policy is composed of several specific covers that may help you protect your small enterprise against the situations listed in the policy. It is important to understand the terminology used in the policy, as it can help you get a picture of the defined scope of coverage and the responsibilities of both parties.
This policy is issued to cover insured property related to your business, and it applies when the total value at risk across all insurable asset classes at one location does not exceed ₹5 Crore at the policy commencement date. If the total value at risk exceeds ₹5 Crore during the policy period, the policy will be replaced by the applicable policy at the time of expiry.*
The policy schedule is a critical document that provides essential information about your insurance coverage. It includes personal details, the policy period, descriptions of insured property, the sum insured for each cover, premium payments, add-on covers, and other relevant information.*
Understanding Partial Loss
A partial loss, as defined in the policy, refers to any loss or damage to the insured property that does not result in complete destruction or irreparable damage. In the case of a partial loss, the insurance company will reimburse the cost of repairs required to restore the property to a condition substantially the same as it was before the loss occurred. The key points to remember regarding partial loss in this general insurance
- Partial loss claims are applicable when the insured property can be repaired or restored.
- The goal is to bring the property back to a condition similar to its original state.
- The insurance company covers the cost of necessary repairs, subject to policy terms and conditions.
Understanding Total Loss
A total loss, as defined in the policy, occurs when the insured property is completely destroyed, lost, or damaged beyond retrieval or repair. In such cases, the cost of repairing the property may exceed the sum insured for that item or in total. The key points to remember regarding total loss in the Bharat Sookshma Udyam Suraksha Policy are:
- Total loss claims apply when the insured property is beyond repair or restoration.
- The insurance company will pay for the reinstatement or replacement of the property.
- The reconstruction or replacement is done using standard materials readily available and in common use for similar types of buildings or assets.
What You Should Know About Your Policy?
Unlike a standard fire insurance plan, this type of policy is rather comprehensive. Here are a few things that you may like to take note of about this plan, especially if you own a small business.*
The sum insured represents the maximum liability of the insurance company for each cover or loss. It's important to ensure that the sum insured adequately reflects the value of your insured property.
Restoration of Sum Insured
After a loss, the policy allows for the restoration of the sum insured. However, you must initiate the repairs or reinstatement within a reasonable timeframe. Failure to do so may result in a reduced payout.
The policy includes in-built covers that offer additional protection without extra premium charges. These covers include additions, alterations, or extensions to the property, coverage for stocks at multiple locations, temporary removal of stocks, coverage for specific contents, start-up expenses, professional fees, and costs for the removal of debris.
The policy specifies events and circumstances that are not covered, such as war, pollution, and losses due to your deliberate actions. It's essential to be aware of these exclusions to avoid misunderstandings during the claims process.
The Bharat Sookshma Udyam Surkasha Policy may prove to be a valuable tool for small and medium-sized enterprises in India to safeguard their assets and financial stability. Understanding the concepts of partial loss and total loss claims is vital for policyholders to navigate the claims process effectively. It is crucial to review your policy thoroughly and consult with your insurance provider for any clarifications or specific details related to your coverage.
*Standard T&C Apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.