Why Burglary Insurance claims of Small and Medium-sized Enterprises (SME) are moving towards unsettlement?

The instances of unsettle of burglary insurance claims of small and medium-sized enterprises are growing. The main reasons for the unsettlement of these cases are that the policy ceases to operate in certain circumstances. Also it is imperative to know what is covered and what is not under the burglary insurance for SME’s so they do not end up in trouble.

Understanding burglary

Owing to a lack of precise definition, insurers have their own varying versions and definitions of burglary. Most of the insurers define burglary as:

• A theft of any property from the insured premises following a criminal entry by aggressive means. Or
• A theft from within the premises by a person who must break out of the insured premises through aggressive and brutal means.
• Use of violent means could be against the property as well as any person.
• There needs to be perceptible marks to make out that force has been used while entering or making an exit from the premises.
• If the theft takes place while the insured premises were left fully accessible or using duplicate keys, one cannot obtain the insurance claim.

An insurance against burglary covers your housing, as well as business premises. It largely covers damages caused to the premises and essential value of the property lost in such incidents. An insurance policy against burglary pays the tangible damage incurred on the insured assets, subject to the total sum insured. The premium charged on such policies differs on the basis of a number of factors, such as nature of stocks, presence/absence of security measures, previous claims experience, situation of risk, etc.

How can one claim insurance

In case of a burglary, you must file a police complaint first and report the details of the mishap to your insurance company at the most primitive stage. The company gives you a claim form, where you have to fill up all the details and give it along with all the related documents. You have to submit this form within 14 days from the date of occurrence. After this, the insurance company might conduct an assessment of the premises and send its surveyor to do so. Do bear in mind that a transparency on the information you provide would make sure that the settlement of your claim is speedy.

 What is not covered in burglary insurance?

• Things like precious stones/metals, watches, share certificates, money, title deeds, property held in trust, record books, etc, are not held under protection, except for cases where it is specifically insured.
• Things kept in a safe must be acknowledged for them to be covered in an insurance policy.
• Any loss if occurred due to the use of duplicate keys, unless obtained by use of force or threat, is not covered.
• Items stolen by family members, employees, housemaids, etc, are not covered under the policy.
• Often policies do not cover any loss and/or damage arising out of wars, strikes, riots, civil unrest, terrorist activities, natural calamities, etc.
• Stocks or items whose value frequently fluctuates can be insured on a declaration basis.

Additionally there are certain circumstances, where the policy ceases to operate. These entail situations in which:

• Your residential/business premises are left isolated/unattended for over seven days and nights in a row.
• You have made certain changes to the premises, escalating the risk.
• If the insured asset has been transferred from you to someone else by way of a will, gift, sale, etc.
• If you have been unsuccessful to take care of the insured premises.
• If the burglary has been attempted only to obtain claim from the insurance company.

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Author : Harpreet Singh, Insurance Expert, DGM at K M Dastur Reinsurance Brokers Pvt. Ltd.

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