September 2, 2015
India Inc is inadequately covered for business-related risks. A survey conducted by ICICI Lombard said that revealed that despite being aware, corporations have taken insurance coverage for only a few risks. Group medical insurance and group accidental insurance is the most common cover.
The study, spread across 292 companies spanned technology, BFSI, steel, cement, pharmaceutical, petro & energy, engineering & manufacturing, FMCG, reality and infrastructure, mining & minerals, healthcare & hospitality, transportation & logistics, media & entertainment, auto & auto ancillary and telecom. It revealed that many industries which have high exposure to certain risks do not have adequate risk cover.
Results captured for both smaller and bigger firms indicate that corporations focus primarily on employee and asset related risks. While most companies have group medical insurance, accidental insurance and insurance against damage to their asset or machinery, they have limited protection against liability related high impact risks. In fact, new age risks such as cyber liability as well as directors’ & officers’ liability have been opted for by few firms.
With respect to assets, fire & special perils (76 per cent) was on top of the list, followed by plant/machinery insurance (59 per cent) and construction all risk (56 per cent). Others like ports & harbour coverage and fidelity guarantee was only taken by 18 per cent of respondents.
Similarly, on liability, covers like Directors & Officers Liability (36 per cent) and Commercial General Liability (25 per cent), apart from public liability (20 per cent) was not very prevalent among India Inc.
Key risks such as liability has been ignored at industry level, high inclination among companies to cover basic risks. Also, data theft and intellectual property insurance were not amongst the top 5 risks insured by ITeS companies. Even in the BFSI space, only 24 per cent BFSI companies opt for credit & money insurance to protect transit of cash within branches and ATMs.
Even product liability covers, for manufacturers has not been adequate. As per the study, only 44 per cent Auto & Auto Ancillary companies opt for product liability covers, while only 33 per cent FMCG firms opt for product liability insurance. Pharma & chemicals companies hardly purchased liability covers to insure their products and employees.
Link – http://www.business-standard.com/article/finance/india-inc-not-properly-insured-says-icici-lombard-survey-115090100950_1.html