Companies’ purchase of liability insurance goes up by avg 50%

Chennai: Rising strife and damages caused is forcing companies to purchase liability insurance, which covers loss and damage caused due to natural disasters, burglary and riots. Some insurers are witnessing a 50% increase in policies sold.

“We have seen about 20% increase on yearly basis in the sales of our product — Public Liability Insurance (Industrial Risks) Policy — which provides coverage to accidental death, body injury or disease, loss or damage to property. It also covers legal costs and expenses incurred which is within the limit of indemnity. The loss claim ration is around 50%-60%,” says Sanjay Dutta, chief, Underwriting and Claims, ICICI Lombard General Insurance.

SBI General has seen an increase in both policies sold and premium earned. “Higher conversion rate of liability, from queries turning into sales, seen under directors and officers (D&O) liability policy, with 80% rise in sales. With the amendment of Companies Act, 2013, more companies are keen on insuring their officers, directors and independent directors. Even premium charged has increased up to Rs 2.5-Rs 2.8 crore, from Rs 1.4-Rs 1.5 crore for sum assured value in the range of Rs 5-Rs 25 crore in the past one year,” Vaidyanath Balasubramanian, Underwriting Manager, SBI General Insurance said.

Shreeraj Deshpande, COO, Future Generali India Insurance, said they have seen 30%-40% higher sales in public liability covers were driven by educational institutions, as compared to 50%-60% higher sales among product liability covers due to export requirements.

The insurance company said it does record more claims to cover damages from policyholders running businesses in the auto industry and pharmaceutical business. Deshpande said, “The overall loss claims ratio stands at 40%-50%, which is much better as litigations are lower in India. However, we so see higher awareness on liability insurance. Even the overall premium for this cover gone up by 10%-20% compared to previous year.”

Source: The Times of India

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