Office Insurance: Coverage, Claim & Exclusions

Updated: 26-10-2022 13:15:04 PM

Running your own business and owning an office is a thing of great pride. However, it is also important to  protect your office and yourself from any unforeseen events that can hinder the functioning of your business. To safeguard yourself from such risks, one can opt for office insurance.

What is Office Insurance?

Office Insurance offers comprehensive coverage for the risks associated with threats which can impact office operations.

It covers not only the office property, but also the loss of money or any cheating done by employees. The insurance is usually offered as office package policy to cover the risks arising from various untoward incidents.

What all Office Insurance Covers?

It is available as a package policy which includes protection against:

• Damage to insured property, including shop front like windows, awnings, etc.
• Misuse of office data
• 3rd party legal liabilities
• Fixed items like sales counters, kitchen units, shelves, carpets, etc.
• Financial risks caused by fire, burglary, machine breakdown, etc.
• Loss of baggage of the partner, proprietor, principal officer, an employee when he/she is on office tour
• Explosions and lightning damage caused to sanitary items, safety appliances, housekeeping services, publicity tools like neon lights
• Owner’s personal accidents, which include temporary total disability, permanent partial disability and permanent, total and absolute disability

Entrepreneurs can opt for any of the following extended Office Insurance plans.

• Burglary: This policy will cover damage or expense incurred due to burglary or housebreaking
• Money in Safe: This policy type covers loss of money (which includes paper money, coins, cheques, bank drafts, revenue stamps) which is kept in lockers or safety boxes
• Money in Transit: This policy covers money in transit, that is, any loss to cash or bank drafts during transfer from the office premises to the bank or any other specified location
• Electronic Equipment: This extended policy covers physical loss to electronic equipment like printers, computers and fax machines
• Portable Equipment: Damage caused by riots, terrorism or fire to laptops, tablets or any other official portable digital equipment
• Business Interruption: If the office property gets ruined and the business is interrupted, the policy will provide the rent of a new office, overheads and wages to keep the business running

Read More: What is Commercial Insurance – Coverage, Claim & Exclusions

How Office Insurance Functions?

It is easy to get an office insurance. Let us understand how this insurance works and how people can get the best out of it.

• The policy seeker fills up an application form, mentioning the details regarding the property for which the insurance is required
• The insurance company sends a surveyor to the office premises to verify the condition
• If the insurance is possible, the insurance company provides the policy
• The insured gets a free look period within which the policy can be changed or cancelled
• The insured pays premium within the stipulated time
• In case any eventuality occurs, the insured intimates the insurance company about the same
• All the required documents are submitted to the insurance company
• A surveyor verifies all the claim details
• In case the claim is valid, the compensation amount is paid to the beneficiary
• If the claim is found to be false, the insurance company rejects the claim and informs the claimant about the same
• If the claimant is not satisfied with the resolution, he/she can raise a case in the court of law

Eligibility Criteria 

Office Insurance policy is eligible for small, medium and large-scale business owners who have:

• Commercial offices
• Government offices
• ITES and BPO call centers
• Software development offices
• Warehouses and manufacturing units

Office Insurance Claim Process

The insurance companies ensure that the claim process goes smoothly and conveniently. The following steps are followed to settle an office insurance claim:

• The policyholder intimates the insurance company about the loss
• A claim number is provided to the claimant
• A duly filled in claim form and the required documents are submitted to the insurance office
• A surveyor is appointed to survey and verify the loss
• After the surveyor submits the loss details, the insurance company adjudicates the claim as admissible or not admissible as per the policy terms
• If the claim is admissible, the compensation is paid to the beneficiary
• If the claim is false or not as per the policy terms, the same is communicated to the insured
• If the insured is not satisfied with the resolution, the case can be raised in the court of law

Documents Required for Claim Process

The documents required for claiming an office package insurance are:

• Duly filled in claim form
• FIR report in case of theft/burglary
• Evidence of property/assets damage
• Medical certificates in case of accidents

How Long Does it Take to Pay Out a Claim?

An office insurance claim can be settled within 30 days of claim intimation. If any arbitration is involved, it might take more time to settle the claim.

Cases Where you Can’t Claim Office Insurance (Exclusions)

An office insurance protects the office and its owner from various risks; however, it does not cover financial loss or damage caused to the property or employees due to reasons like:

• Underground work
• Wars and nuclear explosions
• Tow goods other than for sales.
• Mechanical or electrical breakdowns
• Illegal activity by the policyholder
• Normal wear and tear caused over time
• Explosions caused to pressure vessels or boiler
• Intentional damage caused by the policyholder
• Expenses on surveyors, engineers and architects

Companies offering Office Insurance in India

With fast-paced development, people in India are getting aware about the need to protect their businesses and offices from various perils which might hamper their work. Thus, many people are now purchasing office package insurance, which can also be customised to suit the needs of the customers. Some of the companies providing office insurance in India are:

• Bajaj Capital
• ICICI Lombard
• Reliance General Insurance
• TATA AIG
• Future Generali

Important Aspects

• The insured can ask for increase in the sum insured amount during policy renewal
• There is a 15-day free look period within which the policyholder can go through the terms and conditions and decide whether to keep the policy or reject it
• For accidental claims, the insurance company must be intimated within 14 days of the event
• To get timely delivery of correspondence, the insurance company should be intimated about any change in address or contact details
• If the business has an incident-free history, the premium amount will be less
• If the business has multiple offices, insurance companies can offer a comprehensive Office Insurance which will cover risks related to multiple properties
• If the insured changes the occupation, the same must be intimated to the insurer
• If there is no break in the policy and no claim has been made in the preceding year, the insured gets a cumulative bonus next year

Advantages of Buying Office Insurance

An office insurance ensures that business owners get sustainable growth in their business amidst risks and uncertainties. This protection plan comes with the following benefits:

• Coverage for damage to loss of machines, bulldozers, compressors and cranes.
• Coverage for damage irrespective of the fact that the machinery is working or is at rest.
• Secures the business owner from the legal liabilities of Fatal Accidents’ Act 1855/Workmen’s Compensation Act 1923.

FAQs

Q1. Can the policyholder cancel office insurance?

Yes, the policyholder needs to submit a written document to cancel the policy.

Q2. What assets are covered under office insurance?

Office premises, staff and customers are covered under office insurance.

Q3. What is the indemnity period for office insurance?

This is the time duration within which the policyholder can claim for business insurance costs.

Q4. What is the policy period of office insurance? 

The duration of the policy period is 12 months.