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Deposit insurance Coverage

Deposit Insurance Coverage by DICGC

How safe is your deposit if your bank undergoes a crisis? Who guarantees that you won’t lose the money deposited in the bank? Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI is set up to insure the deposits held by the banks. They also guarantee credit facilities. Deposit insurance coverage is a facility that provides protection cover against losses to deposit holders in banks in case the bank fails financially. Amount to be paid as a premium or this policy is covered entirely by the insured bank for all the depositors.

Types of banks insured by DICGC

  • All commercial banks including local area banks and regional rural banks are insured.
  • Branches of foreign banks functioning in India.
  • All-State, Central, and first cooperative banks are covered by the DICGC.

What is insured under the deposit insurance coverage?

  • Savings deposits, term deposits, and RDs are insured by DICGC.
  • Government and inter-bank deposits.
  • Foreign Government deposits.
  • Single and joint accounts to be separately insured, as per RBI.

Exclusions by DICGC

  • Deposits of State co-operative banks and state land development banks are not covered.
  • Primary cooperative societies are not insured under the Deposit Insurance Coverage.

What is the maximum amount insured?

₹ 5 lakhs is the maximum limit up to which a particular depositor is insured. It is applicable for both principal and interest amounts held by the depositor.

How to know whether your bank is insured by the DICGC or not?

Printed leaflets are given by the DICGC while registering the banks as insured banks. These leaflets display information concerning the protection offered by the corporation to the depositors of the insured banks. In case of doubt, the depositor should make a specific inquiry to the bank in this regard.

Under what circumstances is the DICGC liable to pay?

DICGC is liable to pay when a bank goes into liquidation. DICGC is liable to pay the claim amount within two months from the date of receiving the claim from the liquidator. The liquidator is required to disburse the claim amount to every insured depositor.

In case of a merger, the DICGC pays the insured bank the difference between the full amount of deposit or the limit of insurance cover, whichever is less.

It also makes payment of the amount received by the bank under the reconstruction scheme. The amount can be claimed within two months from the date of receipt of the claim list from the transferee bank.

Deposits held in the same name or are under a similar type of ownership at the same bank are added together before deposit insurance is determined. The deposit insurance coverage limit is applied separately to the deposits in the respective banks if any depositor has holdings in more than one bank.

Before opening a bank account, it’s imperative to ensure that the bank is protected under deposit insurance coverage. As with this insurance coverage, your hard-earned money and savings are protected from any kind of unwanted losses.

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Definition of insurance

Definition of insurance

To choose the right kind of insurance for yourself, you must first understand what insurance is. It is necessary for you to know the right definition of insurance and its components. In this article, we’ll be offering an in-depth detail of insurance which will definitely give you a clear picture of it!

Let’s dive in.

What is the definition of insurance?

Insurance is a contract of indemnity, in which an individual or an organization receives financial compensation or reimbursement against the losses from the insurer. It is a shield used to protect the insured against the risk of monetary losses due to the damage caused. Insurance covers the policyholder for the losses incurred to him, his property, or any third party that might have suffered in the event.

There is a huge number of insurance policies offered by various insurance companies that provide coverage for different risks. Each of these policies have different terms and conditions that differ depending on the type of insurance and the company offering it. With such varied options available in the market, through deep research one can easily find a policy that suits his needs and fits his budget.

Components of insurance

There are a few components that are common for every kind of insurance policy. They are:

1. Premium

Premium is the amount that the policyholder has to pay as a consideration for the coverage offered in the policy. It is regarded as the insured’s share for covering up the losses. The insurance premium is determined by calculating the risk covered. The higher the chances of risk, the higher goes the premium.

2. Policy limit

It is the maximum amount that the insurer will pay for the damages caused to the insured on the occurrence of the event mentioned in the policy. Policies that have a high limit, have higher premiums. For life insurance policies, the maximum amount that the insurer will pay is known as the face value. This amount is paid to the beneficiary on the happening of the contingency, that is the death of the insured.

3. Deductibles

While understanding the terms and conditions of the policy, an individual must be extremely careful and attentive while going through this part. A deductible is the amount of loss that the insured is required to pay out of his pocket. These losses are excluded and not compensated under the insurance cover.

These deductibles differ from policy to policy and insurer to insurer. Generally, policies with a large number of deductibles carry less premium value as the policyholder has to pay a major part of the amount from his side.

The most common types of personal insurance policies that are offered by almost all insurance companies are auto, health, home, and life insurance policies. Out of these car or auto insurance is a compulsion by law. Moreover, there are other policies offered by financial institutions that cover the risks of businesses too! From your health to your profession, insurance has got you covered in every aspect of your life!

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Characteristics of Insurance

Characteristics of Insurance

There are a number of things written and said about insurance that highlight the benefits, features, and more of the money lending facility. However, out of the most discussed topics, one of the topics that is not talked much about is the characteristics of Insurance.

We might all be aware of what insurance is, what it offers, and why we should opt for it, but how many of us really know its characteristics? Not many. Having knowledge about the characteristics helps to get a better understanding of insurance which today has become a must-have.

So, without further ado, let’s explore the characteristics of insurance.

1. Insurance is a personal contract

Insurance is a contractual agreement between the insurance company and the policyholder. This contract is bound by certain obligations that both parties are required to fulfil to keep the contract legal. These obligations state that the insured is required to pay a premium to the insurer regularly. Furthermore, the insurance provider needs to compensate the insured for the losses mentioned in the policy. Also, the insurance contract is non-transferable without the consent of the insurance policyholder.

2. Sharing of risk

Premium paid by the policyholders is used by the insurance company to recover the losses incurred by insured individuals. It helps in reducing the burden of heavy losses on a single individual in case of any contingency. This way risk of a single individual is pooled among different individuals and its effect of the loss is minimized.

3. Cost Of Risk

The cost of risk is the value of an object which is insured under the insurance policy. Insurance companies properly evaluate the value of the subject matter before entering into a contract. Proper valuation of the insurance object helps the insurer in the calculation of the right premium amount to be paid by the insured. The higher the risk associated with the insured object, the higher will be premium charged and vice versa.

4. Insurance gives assurance of compensation

Insurance policies assure the policyholder that compensation will be provided to you in case of losses and damages. Insurance companies guarantee the protection of the policyholders and assure to bring them back on their feet post the damages. This sense of relief for the insurer motivates them to invest in insurance policies.

5. Insurance contracts are executory

This means that compensation is paid to the insured only on the occurrence of the contingency. The agreement states that the insured is liable to claim compensation from the insurer only if he incurs losses. The insurer is not liable to pay any compensation in case there are no losses to the insured.

6. Subject to disclosure

This means that any misrepresentation or concealment of facts from either the insurer or the insured will make the insurance contract void. The policyholder is required to disclose full information regarding the insurance object without any omission or mistakes. Similarly, insurance companies must explain clearly the terms and conditions of the insurance contract to policyholders.

Insurance contributes greatly to the well-being of individuals. The characteristics of insurance mentioned above and a variety of benefits, make insurance a wise investment.

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Blockchain in Insurance

Blockchain in insurance

For years, the traditional insurance business model has proven to be rock solid against changes. Many policies are still printed on paper. Consumers are still calling by phone to purchase new policies. However, the insurance sector is now beginning to imbibe the digital revolution. Emerging technologies are changing the way consumers interact with businesses and how products and services are delivered. Blockchain is one of those coveted technologies.

Strategies implemented by companies such as IBM and Enterprise are helping blockchain push the boundaries of multiple industries including Insurance. Blockchain in insurance would automate the underwriting and claims settlement process, thus making it easier, faster, and convenient.

What is blockchain?

Blockchain is essentially a decentralized and distributed system. In this particular system, the records and transactions can be exchanged, verified, and signed without the intervention of a central party. Conducting business through such means paves the way for transparency, trust, and security. Something that couldn’t be attained through the traditional way of working.

How does blockchain work?

Imagine a never-ending network of spreadsheets across computers all over the world. Blockchain is the network that is designed to update this spreadsheet periodically. The various blocks on the blockchain consist of digital pieces of information which exist in three parts.

  • The first is information about transactions like date, time, and amount of purchase.
  • The second is stored information about the participants of the transactions.
  • The third is stored information that differentiates one block from the other.

Whenever any blockchain transaction occurs, the process generally includes these steps-

  1. A new block is created to highlight the transaction.
  2. The block is verified through every participant of the network.
  3. Cryptocurrency or any other “proof of work” signifier is attached to the block.
  4. The block created is added to the existing chain.
  5. The network is updated after the addition of the block and the transaction is finalized.

Blockchain technology can offer a myriad of benefits to not just insurance but other industries too. Automation in document transfers, contract term negotiations, and increased cybersecurity are some of the primary benefits of blockchain technology.

Applications of blockchain technology in insurance


Property & casualty insurance

Property and casualty insurance includes a variety of insurance such as car, bike, commercial, and home insurance. Significant manual entry is required in processing claims for huge amounts which leaves room for human error. Using blockchain technology could make claims processes faster and cheaper. By using smart contracts and shared ledgers to issue insurance policies, the claims and payment processes can be automated.

Detection of fraud and prevention of risks

The outdated methods of the insurance industry contribute significantly towards potential fraud and errors. To combat this, blockchain can help insurance companies store claims information on a ledger. This would help companies communicate and identify suspicious behavior.

Advantages and disadvantages of blockchain in insurance

The introduction of blockchain in the insurance sector can have enormous benefits to both companies and their customers. However, just like any other thing blockchain too has its own set of pros and cons.

Advantages of blockchain in insurance

The advantages of blockchain technology are as follows:

1. Increased efficiency

So many processes in the insurance industry are manual and time-consuming. Blockchain can streamline this process by reducing paperwork and reconciliation for insurance contracts.

2. Enhanced trust

Blockchain uses cryptography in all its transactions. This makes sure that the transactions you make are authenticated, secured, and verifiable, which ensures to protect customer privacy.

3. Claims processing

Blockchain allows to collect essential real-time data and conduct in-depth analysis. This would help to speed up the processing of claims and pay-outs.

4. Smart contracts

Smart contracts are software that will be a very useful tool in the claim approval process. These smart cards will also help in immediate pay-outs to the customers once the claims are approved. This software checks for certain transactions in the network and automatically executes actions if pre-specified conditions are met. These smart contracts will reduce paperwork on the back end and will also be cheap to use.

Disadvantages of blockchain in insurance

The disadvantages of using blockchain technology are as follows:

While blockchain is a hopeful futuristic solution it comes with its own set of obstacles. Here are some of the disadvantages of using blockchain in the insurance sector.

1. Cyberattacks

The increased popularity of blockchain has garnered it some widespread attention. Many new users are embracing this technology every day. But with this increased usage blockchain is becoming more prone to cyber-attacks which ultimately puts customer security at risk.

2. Loss of integrity of data

With millions of transactions made every day, the validity of every blockchain transaction must be considered. This brings into question fraudulent insurance transactions. Therefore, all possible measures would be required to be undertaken in order to protect the integrity of customers’ data.

3. Cost of operations

The increasing popularity of blockchain will result in the technology becoming expensive. Insurance companies might find it difficult to afford this new technology for everyday processes.

4. Privacy

Blockchain is available in the public domain. This means that every blockchain transaction can be traced back to its original block. The information being available to the public can be a potential privacy threat to the customer. Criminals can access this data and exploit it to their advantage.

5. Legal issues

Insurance companies must adhere to the current regulatory and legal hurdles before fully adopting blockchain technology. There are a number of blockchain features that are in violation of current insurance laws. For instance- customer’s personal data and their policy information on the blockchain must comply with existing privacy and data protection regulations.

While blockchain technology looks promising, it is still in its infancy. No one can predict the true power of this technology. Blockchain can provide insurers with better tools and make insurance processes convenient for users.

However, the introduction of the technology would demand the old standards and insurance processes to be optimized to. The insurance industry has high privacy and security concerns and with rapidly growing customers, these concerns are bound to grow.

Insurance companies must provide clear regulations in order to safely utilize blockchain technology. With time and a better understanding of the technology, these changes can be implemented. But once blockchain comes into its own, this technology is sure to transform the insurance industry giving it a new meaning and upgrade.

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Army Group Insurance Fund (AGIF)

Army Group Insurance Fund (AGIF)

The army constantly protects us from any external or internal threats and keeps our country safe. To ensure the safety of the people who protect us, an army group insurance policy was introduced in the year 1860. The army group insurance fund (AGIF) was introduced to fulfill the following objectives-

  • Providing financial help to the families of the army personnel who were martyred during service.
  • Providing maturity benefits as a lump sum at the time of retirement.
  • Providing any other benefits that may be introduced in the policy by the Board of Governors periodically.

In the initial years, AGIF had just two schemes which increased gradually according to the needs of the army jawans and their families. Life insurance cover, disability benefit, maturity benefit, post-retirement extended insurance scheme, etc. are some of the schemes introduced in the AGIF for better financial coverage of the jawans and their families.

The life insurance coverage under this insurance was Rs 30 lakhs for the officers and for the personnel below officer rank (PBORs), it was Rs 15 lakhs. But in April 2011, the life insurance coverage was increased by Rs 10 lakh and Rs 5 lakh for the officers and PBORs respectively.

After this, the annual premium amount payable for jawans was increased to Rs 2000 from Rs 1000. For the Officers, the annual premium amount was increased to Rs 4000 from Rs 2000.

Benefits offered by the Army Group Insurance Fund

Along with providing financial help, the army group insurance fund also provides a variety of additional benefits. They are as follows:

1. Extended insurance scheme

This scheme was introduced under AGIF to provide insurance cover to servicemen after the completion of their service. As of 2014, the revised extended insurance provides coverage of Rs 10 Lakhs and Rs 5 lakhs for officers and the PBORs respectively. The extended insurance is valid for a period of 26 years after retirement or 75 years of age whichever is earlier.

2. Maturity benefits

The maturity benefit is an added bonus paid to the servicemen upon completion of the service. In case of death of the person, the family receives the maturity benefit along with added death benefits.

3. Disability cover

While at service, army personnel are exposed to various risks due to which they might end suffering from an injury or disease. This might make them unfit for service. Under the policy, in case of 100% disability, an amount of Rs 25 lakhs and Rs 12.5 lakhs is paid to the officers and PBORs respectively. The amount paid gets adjusted in other cases depending on the severity of the problems.

4. Scholarship scheme

Scholarship schemes were introduced under AGIF to provide an incentive to the wards of the servicemen. The scholarship scheme provides a sum of Rs 40,000 per annum for the wards of the servicemen. The scheme is applicable for the wards of senior officers, junior commissioned officers, and officers in the army welfare education society.

The soldiers and officers are posted in various locations with the harshest weather and difficult terrains to maintain the security of the country. They often get exposed to dangers that might even lead to death. The Army group insurance fund provides these superheroes of ours a sigh of relief by ensuring their family’s financial security.

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Advantages and disadvantages of insurance

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Advantages and disadvantages of insurance

The insurance sector has experienced immense growth in the past few years. More and more people are realizing the importance of insurance, and taking up policies as per their needs.

But insurance like any other thing along with having numerous advantages has certain disadvantages too. In this article, we will discuss the advantages and disadvantages of insurance. Let’s first look at the advantages of insurance-

Advantages of Insurance

1. Financial protection

The prime function of Insurance is to provide you with financial protection in case of unexpected losses. Your insurance provider charges you with a nominal amount called the premium in exchange for providing this protection. In the case of life insurance, the beneficiaries receive the assured sum on the demise of the policyholder.

Several other insurance policies provide protection against miss-happenings like theft, fire, or natural calamities, etc. The funds received from the insurer help to continue the normal pace of life after the unfortunate events.

2. Risk sharing

We are exposed to various kinds of risks and uncertainties every day. These risks and uncertainties can cause major losses. Insurance acts as a cooperative device that shares your risks providing you with financial coverage for the same.

3. Encourages savings

In the case of life insurance, the premium paid to the insurer can also be considered as a saving, which will help the insured’s family in the future. Regular payment of insurance payment helps you to add discipline to your finances. Also, while you save money for premiums, your unnecessary expenses reduce automatically.

4. Self-sufficient

Damages to assets can lead to a huge financial loss for one, but with insurance, you won’t have to ask for financial support from anyone else. The claims will help you to manage the finances and bring back your financial stability. In case of deaths, the insurance amount can help the individual’s family to be self-sufficient.

5. Loan facility

Various insurance policies provide this facility or availing loans against the insurance policy. This loan can be obtained from your insurance company or any other financial institution. This provision can help you when you need money in an emergency.

6. Employment opportunities

Insurance has become a new age business while engaging hundreds of insurers and thousands of employees. The development of the insurance and finance sector has created many opportunities for those who have the qualification and caliber to excel in this industry.

7. Encourages foreign trade

Insurance is a device that reduces or eliminates the risk of financial losses in case of mishaps. This helps exporters and industrialists focus on the development of their business, allowing them to undertake risks and promote foreign trade.

8. Reduces inflation

An increase in prices of commodities is referred to as inflation. Reduction in the volume of money is necessary to control inflation. Money that you pay as a premium to the insurer helps reduce the market volume of money. Hence this helps control inflation in the country.

9. Develops our economy

A major part of the premium that is collected by the insurance companies is invested in sectors such as trade and industry. Such investments promote the growth of the economy as a whole.

Disadvantages of Insurance

Here are some of the disadvantages of insurance:

1. Not all losses are compensated

The insurance may not compensate for all types of losses that occur to the insured. In such cases, the insured might have to pay for the excluded losses from his own pocket.

2. Lengthy formalities

The insurance claims usually have lengthy legal formalities. This might lead to a delay in receiving the financial compensation.

3. Insurance is a business

At the end of the day, insurance companies are running a business. The companies may try to compensate as little as possible to the insured. There’s a possibility that the insurance companies may try to maximize their profits rather than the compensation amount for you.

4. Possibility of a crime

The benefits provided by insurance might tempt someone to commit crimes. This might sound disturbing, but there have been cases where frauds and scams were conducted to get the insurance claim.

5. Less ROI

Insurance policies do not offer much ROI as compared to other financial tools like shares and mutual funds.

 

Every financial decision you take has its set of pros and cons, even insurance. Choose wisely before opting for an insurance policy by considering your need, purpose and the advantages and disadvantages of insurance. You can immensely benefit from an insurance policy provided that you clearly understand its terms and conditions.

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Motor Insurance

Types of motor insurance

Types of motor insurance

Motor vehicles include two-wheelers, four-wheelers like cars and jeeps as well as trucks and busses. They are all an indispensable part of daily life. However, road transport involves multiple risks. A motor insurance policy can cover the financial losses that might be incurred during a mishap with your vehicle. Before you decide to take up insurance, it is important to be aware of the different types of motor insurance available to make a safe and well-informed choice.

Usually, the vehicles are insured at their current value in the market i.e., the IDV or Insured Declared Value. This value depreciates with time and is higher for the new vehicles than the old ones.

Here are the major types of motor insurance plans discussed in detail, this will enable you to recognize the type of insurance you need to take up for your vehicle.

Types of motor insurance based on vehicle owned:

There are different insurance policies available for cars, two-wheelers, and commercial vehicles. They are as follows:

1. Car insurance

This motor insurance is mandatory when buying a new car. It is one of the most important purchases to be made to ensure safe-guarding of the car from natural disasters, accidents, thefts, etc. Insurances also have mandatory clauses such as third-party liability which protects against claims of third-party vis-à-vis damage occurred to another person’s life or property by a motor vehicle.

2. Two-Wheeler insurance

The policy primarily looks into the insurance aspect of motorcycles and scooters. With the help of Two-wheeler Insurance, the insurer can claim damages in the case of an accident that is either caused on the road [while driving] or through some natural disaster. Claims can be made even if the concerned vehicle is subjected to theft. The insurance plan also includes personal accident claims of the concerned rider or passengers involved.

3. Commercial vehicle insurance

The insurance policy takes into consideration all types of motor vehicles used for commercial services such as buses, heavy-duty commercial vehicles, trucks, and ambulances. These insurance policies protect businesses from potential losses arising from damage to the vehicle, theft, accidents, explosion, etc. It also covers the legal liability towards third parties on account of bodily injury or property damage and death.

Types of motor insurance based on coverage

Motor insurance policies based on coverage refers to the type of insurance plan selected, which can be broken down into the following:

  1. Comprehensive insurance
  2. Third-party liability insurance

Comprehensive insurance

As the name suggests, a comprehensive vehicle insurance plan extends protection and security to the policyholders for almost any potential situation. This includes any expenses suffered by the policyholders in place of theft, accidents, or damage to the vehicle.

A personal accident cover qualifies the policyholder to claim compensation in the event of death or injury due to an accident. Comprehensive vehicle insurances allow adding on plans to the existing policy without the need to take out several policies.

What does a Comprehensive Insurance Plan Cover?

It is imperative to know the different aspects and situations that are covered by a comprehensive insurance plan.
Some of the different situations are given as follows:

  • Theft
  • Vandalism
  • Any natural disaster causing damage to your vehicle; such as earthquakes, floods, fire, and inclement weather conditions.
  • Situations of civil unrest such as riots and protests damaging your vehicle.
  • Damage caused by animals

An important point to note about comprehensive insurance plan cover is that it includes third-party insurance by default.

What does a comprehensive insurance not cover?

In the following cases, the insurance coverage won’t be extended to the vehicle or the policyholder:

  • Damage to the vehicle caused due to driving under the influence (DUI) of narcotic substances or alcohol.
  • Damages caused to the vehicle during collisions.
  • Wear and tear of an automobile.
  • Mechanical or electrical breakdown.
  • Damage to the vehicle when the driver does not have a valid driver’s license.

Third-Party liability insurance

Essentially, third-party liability insurance safeguards against the claims of damage to a third party by the insured vehicle. Hence, these insurance plans protect the interest of the policyholder.

Having a third-party cover for your vehicle helps to lower the risk of the policyholder being implicated in a multitude of situations.

How does a third-party insurance work?

A third-party insurance cover seeks to indemnify the first party against damage claims made by the third party.

There are two broad classifications of third-party insurance:

Liability coverage

Bodily injury liability covers physical injuries caused to another person by the insured. These encompass hospital care expenses, lost wages due to injury or disability, as well as death or permanent disability.

Property damage coverage

Property damage liability covers costs due to the property damage or complete loss of property. It includes claims related to the destruction of landscapes or property – mailboxes, fences, front gardens, gates, etc.

Whenever an accident takes place, the insured individual must notify the insurance company of the situation at the earliest. Some of the following crucial details need to be collected and presented to the insurance company:

  • Description of the accident along with date and time of the event.
  • Description of injuries sustained by driver and others involved.
  • Description of damage to property or vehicle.
  • Details of witnesses present at the scene.
  • Photographs collected from the accident site for evidence.


Policyholders must cooperate with the police and provide all the necessary details to ensure that a smooth investigation takes place. The insurer must make a note of the First Information Report (FIR) number, if applicable, and impart the name of the insurance company.

In conclusion, before purchasing a policy, individuals must thoroughly read the document to understand what is and is not covered under the policy. The foremost objective of an insurance policy is to protect vehicle owners against financial as well as personal and vehicular damage. The government of India has made it mandatory for every vehicle to have motor insurance before it is taken on the road.

A smart and informed decision must be made keeping all the points in mind to be well protected against unfortunate future incidents.

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How to start an insurance company in India?

How to start an insurance company in India?

India is among those countries that have very strict laws when it comes to giving out permissions for financial institutions, funds and insurance companies. This is why it becomes crucial for an aspiring insurance-entrepreneur to to understand the insurance related regulations and rules of India.

This is one of those businesses where you have to first think about all the legal requirements and thoroughly analyze every regulation that is there for starting an insurance company. You also need to consult a lawyer or an expert in this aspect.

Here, we are going to tell you about the steps that you need to follow that will answer your question ‘how to start an insurance company in India?’.

Steps to start an insurance company in India

1. Permission from IRDA

The insurance regulatory and development authority (IRDA) is the supreme authority from whom you have to obtain the certificate of authority to become eligible for applying for insurance. The point to be noted here is that you need to have a different certificate for each category of businesses and you can at no point join other businesses with the insurance business. All the entities have to remain separated from this business.

2. Documentation

An entity that wants to apply for an insurance license needs to apply to IRDA through IRDAI and IRDA/R1. This is the first step towards obtaining the insurance license. The documents that you need to furnish for this are-

  • Show proof that you are a valid company under the Companies Act 2013.
  • Details of directors, board members and investors.
  • A five-year business plan that has been approved by the board.
  • Memorandum of Association and Articles of association. Both need to be drafted as per the regulation of the government and IRDA.
  • Physical copy of the partnership agreement between partners/investors/board members. It should be certified, notarized and registered.
  • Annual report of financial accounting of all the members.

3. Application for registration

After the application under IRDA/1, if the authority gives a go-ahead for you to apply for an insurance license, then you have to fill an application under IRDA/2. This is the first formidable step for applying for a license. The previous two are just preliminary steps. They are just preparation for application.

There are many more documents that you will need to produce in front of the authority while completing the application. Recognition of your IRDA/1 is sent to you and then you are given a list of documents and proofs that you need to produce in front of the authority to obtain your license. Some of the prominent ones are-

  • Your capital proofs. The point to be noted here is that there are different thresholds for each category of insurance type when it comes to business capital. For example- You need to have at least ₹100 crores as capital for being eligible for life insurance.
  • Affidavits of Indian and foreign promoters, shareholding percentages, executive positions, letters of appointment, FIPB and FDI regulations completion proof and many other documents.

This is the step where you need to understand that the process can take some time since it is very elaborate. Well, starting an insurance company in India is not easy as it seems.

IRDA owns all the rights regarding the acceptance and rejection of your license. It may reject your application for non-compliance on any grounds. It reserves the right to do so. Their intimidation regarding acceptance or rejection will be communicated to you in 30 days.

4. Commencing your business

If you are able to get your license then the guideline laid down by IRDA says that you have to commence your business within 12 months of obtaining the insurance company license. This is a very strict guideline and is given a lot of importance by the authorities. Several businesses were ineligible to compete and don’t own a license because of non-compliance with this guideline.

Also, even after granting you a license to commence as an insurance company; IRDA can ask you for additional information. It can also conduct a proper inquiry if it wishes to. This isn’t done with the purpose of finding frauds but can be done as a precautionary measure. They cannot leave anything for a chance.

What you need to do is to create a proper plan way beforehand and you should always be in a position to start your insurance business as soon as you get the green light. Also, you need to keep in mind that you cannot start advertising and attaining clients before getting your license. This is a criminal offence that can land the promoters in jail and face fraud charges.

Eligibility criteria

There are proper eligibility criteria laid down by the authorities which have to be adhered to before even applying under IRDA/1. There are multiple grounds on which the application can be rejected in the initial step. You need to properly and thoroughly research the guidelines of the authorities to understand your eligibility.

In order to function, an insurance company is required to obtain a license. The registration and license issuance of an insurance company is regulated under the Insurance Regulatory and Development Authority Regulation, 2016. Following factors standards are used to define the eligibility for an Insurance company license:

  • The company must be recognized by IRDAI.
  • The company must be registered under the LLP Act of 2008.
  • The minimum net worth of the firm must be 10 lakhs [INR].
  • Under the LLP Act, the company registration name must have the words “Insurance Marketing Firm”.

The Bottom Line

With the help of the above points, you can have a basic understanding of how to start an insurance company in India. Some special corporate lawyers just operate in this segment and are highly specialized in making an application. Apart from that the chartered accountants are also trained professionals who are familiar with the guidelines of the IRDA. Consulting with them can also help you acquire better knowledge.
Another thing that needs to be understood as well is that these guidelines keep changing continuously. The above-mentioned steps are not completely exhaustive and are subject to changes and development. The best thing for you is to always be updated through the websites of the authorities and governments.

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Laptop Insurance in India

Laptop Insurance in India

One of the most important devices that many people use regularly is a laptop. Laptops are essential not only for official purposes, but also necessary for educational, and other online activities. Especially with the new practice of working from home and online education and training, a laptop has become one of the most essential devices in our daily routine.

It is important to take Laptop Insurance as technological devices always remain at risk of damage. Some laptops have a definite lifetime and some may get damaged due to negligent usage. It is not only about the physical damage but many internal faults may appear as well due to loose handling and lack of care. It is very hard to tell how long the laptop would serve and when a problem may appear. To minimize these losses and damages, you must consider buying laptop insurance.

Laptop insurance in India is one of the least discussed and known about insurance. So, here’s a detailed overview that’ll highlight all the important aspects of this insurance.

What is covered in laptop insurance?

The very first concern is what laptop insurance would cover. So let us check out the coverage facilities that you may receive under laptop insurance.

  • Most insurance companies would cover all brands of laptops starting from Apple to Asus.
  • Any breakage, crack, or damage to your laptop screen would be covered under a laptop insurance policy.
  • Any electrical breakage or damage would be covered.
  • Mechanical damage and faults would be covered under a laptop insurance policy.
  • If your laptop gets lost or if it is a case of theft or burglary, the insurance company would provide coverage.
  • If there is an accident that caused damage to the laptop, it is also covered under the policy.

Remember that these coverages would vary from insurer to insurer. You must collect adequate information about the coverage from an insurer before buying so that the policy meets your requirements.

What is not covered in a laptop insurance policy?

It is also necessary to know what would not be included in a laptop insurance policy. Again, remember that inclusion and exclusion of coverages would vary from one insurer to the other.

Let us check out the possible exclusions in laptop insurance.

  • Any previous damage or fault of the laptop before buying the insurance policy would not be covered under the policy.
  • Any intentionally done damage or damage incurred due to careless handling of the user would not come under the coverage of the policy.
  • Damage to the laptop due to war or terrorist activities is not covered under the policy.
  • Normal scratch, or damage due to rough usage, and gradual damage due to weather and long-time usage would not receive coverage from the policy.
  • Insurance companies don’t provide coverage for the maintenance of the laptop.

What are the advantages of buying laptop insurance?

Now that you know what is covered and what is not covered by laptop insurance, let us explore the benefits of buying laptop insurance.

  • It is a better version of your laptop warranty. While a laptop warranty covers only the basic facilities for a very short period of time, a laptop insurance policy would provide a broader range of facilities and coverages.
  • You would receive a lot of discounts, membership facilities, and offers during the policy renewal and rewards depending on your claim records. This eventually aids in saving money.
  • You would receive immediate responses and assistance in case of any sudden damage to your laptops and emergency services.
  • Most laptop insurance companies provide door-to-door pickup and delivery services. This means you would just need to inform your insurance company about the damage and a surveyor and agent would visit you to look into the matter.
  • You can save up a lot of money by buying a laptop insurance policy. This is the biggest facility for which buying laptop insurance in India is recommended. The company would compensate for the financial loss and help you throughout the repairing process.

Steps to get your laptop insured

So how does the whole procedure go? What factor would influence your buying decision? How would you report and claim your insurance? Let us look into the steps.

Decide the coverage

For organizational and even individual purposes, count the number of laptops being used and measure the potential risk factors. Think if you need an insurance policy or not.

Compare and decide

Now think of what coverages you require. There are multiple companies offering different deals. Also, take into account the budget for buying the policy. Now compare the companies, check ratings, and see which company would meet your organizational demands and fulfill your requirements.

Fill the proposal form and purchase

Once you choose the right company, you are required to fill a proposal form, submit documents that the company would ask for, make payment, and buy a laptop insurance policy. Make sure to go through the terms and conditions before purchasing.

Laptop insurance Claim process

Here are the steps you need to follow to get your claim:

  1. If it is a case of theft or burglary, you need to report it to the police first. An FIR copy is a must for the process.
  2. Next, you have to submit the FIR to the insurance company and fill the claim form.
  3. If it is about mechanical or accidental damage, you can inform your insurance company and file a claim.
  4. You may require to submit several documents to process the claim. Make sure to submit them all. Remember that you have to file a claim immediately after facing an issue. Don’t be late.
  5. Now that you have submitted a claim, you have to wait for the insurance company to verify and check the eligibility. Then the company would either accept or reject (only happens if it is not genuine) your claim.
  6. Once the claim is accepted, you would get the reimbursement in the time period mentioned in your policy.

Therefore, to minimize the financial loss and damage to your laptop, you must consider buying a laptop insurance policy from a trusted and reliable company.

Compare, analyze, and always select a company that meets your demands and requirements. Reputed companies usually prove to be more reliable and offer a hassle-free claim process.

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Cyber Insurance in India

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Cyber Insurance in India

We live in an era where virtual is the new way of life. From individuals to business firms, everything has shifted to the online world for most of their operations. Entertainment to shopping, communication to banking every other sector and service is now available online. Although the internet revolution has eased up our lives to a great extent. We need to understand the threats it brings along.

In India, the past decade has witnessed the introduction of digitization in all facets of life. Every corporation has adopted online technology. This makes it necessary for everyone to understand the importance of cyber insurance in India.

What is cyber insurance?

Cyber insurance ensures that your organization gets financial assistance in case of a data infringement or cybersecurity violation that has caused financial loss to your organization. Not only that. It also covers the costs and expenses needed for a legal procedure to get justice against the cyber attack. It acts as your personal arsenal against the malicious activities of the cyber attackers.

Cyber threats can be crucially dangerous for organizations. Organizational confidentiality can be threatened if cybersecurity is not ensured. However, even after taking every necessary step, there are still chances that the data may be leaked and misused. This may lead to huge losses for the company. In such a situation, cyber insurance comes to the rescue.

Features of cyber insurance

The features of cyber insurance are as follows:

  • Cyber insurance policies usually have a tenure of a year which can be extended upon renewal.
  • People that are above the age bracket of 18 years can avail cyber insurance policies.
  • The total sum insured starts from 1 lakh. It can extend further to 1cr- 5cr and can be increased or decreased as per the need of the organization.
  • Affordable premium plans that start from 700 rupees.
  • Restoration expenses are reimbursed during specific malware attacks.

Benefits of cyber insurance

Potential threats that cyber insurance can help you to overcome

You may wonder what possible cyber threats are there that can damage an organization’s confidentiality and dignity. Let us look into some common cyber threats that are prevalent in India.

Data infringement– This is a huge threat to the privacy of the organization as well as its employees. The data relating to the organization’s activities, strategies, plans, employee information, etc. can be breached.

Ransomware– In this cyber threat, malware, which is malicious software, is injected into a system to corrupt the computer system. The malware would block the organization’s access to some files and data. The hacker then demands a ransom to give the access back to the owner, hence the name ransomware.

Personal negligence– The cyber-world is becoming confusing and difficult to understand. Thus, many employees unknowingly invite cyber threats. Their lack of knowledge and expertise can lead to severe security threats to the organization.

What would be covered under cyber insurance?

Coverage varies from one insurer to the other. But there is a range of facilities that are covered by insurers. You should choose the one that provides maximum coverage for your organization.

Let us see what are the overages that you can avail from the best insurer.

  • Most insurers offer coverage for identity theft.
  • Insurers cover malware attacks.
  • They cover social media attacks and vulnerabilities.
  • IT theft is also covered by insurers.
  • Cyber-stalking is covered by many insurers.
  • Phishing is covered under most insurance policies.
  • Email spoofing coverage is commonly offered.
  • Cyber extortion coverage is common as well.
  • Some insurers offer cyber-bullying coverage.
  • Privacy and data breach coverage are provided by most insurers.
  • Many insurers offer coverage for legal procedures regarding a cyber-attack.

Sub-limits and exclusions

Often, the clauses in the cyber insurance policies have sub-limits. These sub-limits define the exact coverage of the policy. For example, claims related to e-mail spoofing and phishing are only covered up to a certain limit. This limit is per-determined. If the loss exceeds this limit. The insurer will have to bear the losses.

Physical damage to the assets or humans is not covered under this policy. Also, any claims that can be linked or traced back to some fraudulent conduct are immediately excluded. The insurer can also impose a fine on the insured for such faulty practices.

What are the consequences of cyber-attacks?

Now comes the question of how cyber-attacks can harm the business and why cyber insurance is important to help you out. Let us first talk about the dire consequences that cyber-attacks generally lead to.

  • Financial loss– Business information and bank links can be leaked as a result of a cyber-attack. Therefore, the attacker may withdraw money or ask for ransoms resulting in an economic loss. Also, if you go for legal procedures, you would face financial losses.
  • Interrupt’s workflow– Naturally, a data breach or intrusion in the computer system would hamper the overall workflow of the organization. Employees won’t be able to work efficiently and use the systems properly.
  • Decreases trust– Customer information can be hacked as well. This means customers may lose trust in the company. You may lose customers as a result of breaking trust.
  • Tarnishes reputation– When the overall performance degrades and customers lose trust in the company, it tarnishes the reputation of the company in the market.

These are the consequences that can severely affect your business and downgrade the reputation of the company in the market as a result of a cyber-attack.

Final Overview

Data breaches and cyber-attacks are increasing day by day. In such a situation, it would be wise to buy cyber insurance in India. Cyber insurance ensures technological security and minimizes the financial loss that you may face due to a cyber-attack.

As organizations are increasingly using technology to conduct their activities, it is important to ensure maximum security as important details and data are involved. However, with the advancement of technology, cyber attackers have also evolved. Thus, taking precautions is the best solution.

And, undoubtedly, cyber insurance can help you out in case of a cyber-attack. You would be able to maintain the reputation and dignity of the organization. The company would also take liabilities for the damages thus minimizing the losses.

Thus select a cyber insurance policy that would fulfill your requirements and meet your organizational demands.

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