Frequently Asked Questions:
Businesses buy insurance to protect their assets and income streams; to protect the assets of directors and officers of the company; to pay compensation to third parties in the event of a claim against the company; and, in certain circumstance, because it is a legal obligation. In case of no insurance business has to take the loss on their own balance sheet, which can become cause of shutting down business completely, hence to avoid such instance, businesses need to buy a protection against all possible eventualities.
The starting point for buying insurance is to identify what risks your business faces and whether these risks could give rise to a significant loss. You should then evaluate the control measures that you currently have in place to minimize the likelihood and/or consequences of a loss. You may be confident that a particular risk will not materialize or, if it does, it will not cause a serious problem. In that case, you may decide to buy only limited insurance for that risk or even none at all, unless that type of cover is either a legal obligation or a requirement of your customers. Unless you are obliged or required to buy insurance, it is up to you to decide whether to buy insurance and what limit of indemnity is appropriate. For example, you may decide not to buy Business Interruption insurance because you believe that a fire in your premises would not cause you undue disruption. Alternatively, you may decide to buy a specific limit of Directors and Officers Liability cover because it is in line with the other members of your trade association or it is the amount specified by your contractual requirements.
You should consider appointing an insurance broker or agent, because they have specialist skills and can save you time and money. An insurance agent will normally only deal with one insurance company and represents an insurance company. Use of an agent may therefore restrict your range of insurance options. A broker on the other hand can provide you with a ‘choice’ of insurers and products and is legally your representative rather than that of an insurance company.
Rather than making critical risk transfer decisions on your own, you may prefer to take advice from an insurance broker. Also, a broker can save you time by identifying the best insurer/re-insurer for your business, advising you on what type of cover is most appropriate and presenting information about your company to potential insurers/re-insurers. This information should include details of your existing risk management practices so that the insurer can decide whether to offer you cover and how much premium to charge. Besides, brokers bring in an element of neutrality and objectivity in the insurance buying process. In addition to their understanding of Risk Management and Insurance, brokers provide support at the time of claims settlement.
A good insurance broker provides a range of services including the following: Identify your insurable risks and decide how much insurance to purchase Compile and validate the insurance data that will be presented to insurance companies Complete insurance proposal forms, when necessary Present your insurance information to alternative insurance companies Identify cost-effective risk control improvements Evaluate quotes from insurance companies, and Claims Management
Across the world, a broker traditionally earns his remuneration through a commission paid by the insurance company. More recently however, the fee based model has also emerged in several countries where the customer pays a fee to the broker, particularly if a risk consulting service is provided. A combination of the two is often found in vogue depending on the services provided. In India, the remuneration of the broker is governed by guidelines laid down by the Insurance Regulatory and Development Authority.
Price should not be the only consideration when choosing your insurance company. The most important service from your insurance company will be the full and prompt payment of the claim when a loss occurs. An underwriter when selected has to be an all weather friend rather than a fair weather friend. He should be logical as well as capable enough on their balance sheet to understand and place a risk of any magnitude.
We are focused with 100 plus years of collective experience. When engaged by a customer we are able to produce outstanding results thanks to our large number of specialists in business critical insurance. Our specialists have been exposed to international best practices across industry sectors. We are totally customer focused in providing leading-edge solutions. We are led by an experienced, multidisciplinary team of professionals drawn from the fields of finance, law, insurance, reinsurance, financial services, information technology, engineering, loss prevention. We also possess technical skills and professionalism to provide our customers with robust insurance solutions. The management team of the Company brings over 100 years of combined best practice driven specialist insurance experience and expertise.