Page 59 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Insurance Laws and Practices

Notes
Example: When an employer is liable to pay damage to an injured employee or a
dependent of the injured employee, he can claim the employers’ liability insurance policy. This
will provide for the employees consultation with the doctors and lawyers fees, etc. This insurance
is taken to cover the financial loss of the employer brought about by paying the injured employee.
This type of insurance is compulsory for all employers so that the insured employee gets
compensation in the event of an injury.
Fidelity Insurance: This is a special type of risk transfer device. Fidelity guarantee covers the
risk of the employers in the event of fraud by an employee. This risk arises due to the dishonesty
of employees who hold a position of trust. This policy covers loss caused by employees in the
business.
Casualty Insurance: This is a residual class of insurance mainly related to health, accident,
liability insurance, automobile insurance, workers compensation insurance, burglary robbery
and the insurance credit insurance, etc. Some of the types of casualty insurance are discussed
below:
Automobile Insurance: This covers the values types of losses like ownership, liability losses,
medical expense losses due to accident, etc. It also covers damage of property due to accident and
theft.
Workmen’s Compensation Insurance: The Indian Workmen’s Compensation Act 1923 provides
for the payment of compensation by the employer to his employees (for their dependents in the
event of fatal accidents) if personal injury is caused to them by accidents arising out of and in the
course of their employment. The maximum compensation payable is as per the scale given by
Workmen’s Compensation Amendment Act 2000. This covers the losses incurred by employers
in the business due to accident or injury of employees.

Liability Insurance: This covers a wide range of losses or hazards. It covers automobile and non-
automobile liability. Examples of non-automobile liability are ownership of property,
manufacturing and construction operations, sale and distribution of products, etc.

Burglary, Robbery and Theft Insurance: These products cover the losses arising from the criminal
acts of others. If employees commit such act the loss is covered by fidelity bond, whereas
burglary, robbery and theft insurance cover the loss of property from criminal act of those other
than the employees of the business.

Credit Insurance: This is a special type of coverage offered to the manufacturers of wholesalers
against their losses resulting from the inability to collect their dues from the debtors or customers.
This type of insurance protects the loss of bad debts of the insured person.

Health and Accident Insurance: This protects the insured against loss due to sickness or injury.
It covers the loss of remunerations caused by sickness or medical expenses resulting from injury
of the insured person.

Caselet Govt. brings more area under Insurance

he state government has extended the insurance coverage areas for pilgrims during
the Rath Yatra festivity in Puri. The state-run Jagannath temple administration has
Tinsured the ring road around the 12th century shrine and all streets connecting to
the Grand Road for a fortnight, to help pilgrims get insurance in case of death.

Contd...

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