Forefront Portfolio Insurance: Coverage, Claim & Exclusions

Updated: 01-10-2019 11:46:48 AM

While running a small or medium enterprise (SME), it is important to get financial coverage against costs related to litigation or crime, as any such issue can result in a big financial burden. Many a times, you might face complaints from people in the organization that might not be true. Forefront portfolio insurance is an insurance policy for SMEs that protects them from threats of litigation and crime.

What is Forefront Portfolio Insurance?

Forefront portfolio insurance is a comprehensive policy, providing financial protection to SMEs against any litigation and defence costs. Thus, forefront portfolio insurance helps these organisations to manage their reputation and to safeguard themselves from potential liability risks.

What all Forefront Portfolio Insurance Covers?

The plan comes with the following coverage and inclusions.

1. Directors’ and Officers’ Liability

• Covers directors, officers and their spouses against claims made by management decisions
• Provides coverage for new subsidiaries
• Policyholder or insured can retain the defence rights in event of any Outside Directorship Claim

2. Employment Practices Insurance

• Provides coverage to company, its directors and employees against the following risk
• Claims made by former, present and/or potential employees
• Allegations of discrimination, sexual harassment, wrongful disciplinary action and termination

3. Employment Theft Insurance

• Covers expenses related to theft
• Investigative costs related to the covered loss

4. Internet Liability Insurance

• Protects the company against traditional publishing related exposures
• Covers allegations like defamation, libel and slander

5. Trustees Liability Insurance

• Covers management and employees in case of any issue with superannuation funds
• Covers trust funds and trustees
• Covers allegation of breach of fiduciary duty, errors and omissions

6. Outside Directorship Liability

• Covers the management and directors against risks arising from management decisions made by external parties

How Forefront Portfolio Insurance Functions?

• SMEs apply for the insurance by submitting the proposal form to the insurance company
• If the company is eligible for it, it submit the required documents. The premium and sum insured is agreed between the two parties on the basis of the inclusions
• Premium is paid to the insurance company on an annual basis
• In case of an unforeseen event, the insured immediately informs the insurance company about the event/s
• Required documents are provided to the insurance company for evaluation
• A representative from the insurance company verifies the details and seeks any clarification from the insured, if needed
• If the claim is genuine, the compensation is paid and if not, the same will be communicated to the company

Claim Process for Forefront Portfolio Insurance

In case of any untoward incident for which you can file a claim under forefront portfolio insurance policy, follow the below mentioned steps:

• Immediately inform the insurance company about the incident
• Submit the duly filled in claim form and other supporting documents to the insurance company
• On the registration of the claim, an assessor from the insurance company will verify the case
• If the claim is valid and adheres to the policy terms and conditions, the claim amount will be credited to the account concerned
• If the insured is not satisfied with the resolution and the settlement amount, the case can be taken to the court of law

Documents Required for Claim Process

To get the claim settlement done on time, provide the following documents to the insurer:

• Duly filled in claim form
• Policy documents
• Evidence of expenses or loss
• FIR report in case of theft or forgery
• Other documents as per the case and situation

Time Taken to Settle Claims

The claim settlement process for forefront portfolio insurance takes approximately 30 days. However, in case of any legal dispute associated with the claim, it might take more time.

Exclusions under Forefront Portfolio Insurance

The events or situations not covered under this policy are called exclusions. Let us look at some of them.

• Pending cases in the court before the start of the policy
• Claims made under a prior insurance policy
• Property damage or bodily injury
• Cases related to insider trading

Note: This is not an exhaustive list.

Companies offering Forefront Portfolio Insurance in India

HDFC Ergo is the only insurance company offering Forefront Portfolio Insurance Policy in India.

Advantages of Forefront Portfolio Insurance

• Helps to balance the financial status of small and medium enterprises in case of thefts and/or losses
• The insurance policy enhances the confidence of creditors and maintains the reputation of the company in front of the investors, thus, helping in taking loans, when needed

FAQs

Q1. Who are included as employees under Forefront Portfolio Insurance?

Employees included under this policy are part time, full time, casual, seasonal, temporary and voluntary workers.

Q2. What is Fiduciary Liability under this policy?

This part of the insurance protects the insured against fiduciary and allegations of errors & omissions.

Q3. How is the premium for Forefront Portfolio Insurance calculated?

The premium amount depends on the coverage required by the company, number of employees to be covered and the type of industry and business.

Q4. What is the policy period of Forefront Portfolio Insurance?

The policy period for Forefront Portfolio Insurance is 1 year.

Q5. Who can terminate the Forefront Portfolio Insurance?

Both the insured and the insurer can cancel the policy.