Page 40 - Insurance Times December 2020

from huge legal expenses. A claim may be triggered if a the huge financial losses which may arise due to huge legal
child playing with a toy has swallowed part of the toy or costs & awards. In the current scenario due to pandemic,
scare marks turned on the skin while undergoing a routine the world economy is at the verge of global recession,
visit to a beauty salon. cyber-attacks, as well as cyber frauds, have increased
manifolds and this may spur demand for other types of
It shall be kept in mind that such policies shall come with liability insurance policies.
certain warranties. Insurers can impose certain warranties
like while taking insurance for swimming pools, the This is the time when not only manufacturers but whole-
warranties can be pool shall be maintained in hygienic sellers, retailers should adequately cover themselves with
conditions along with proper arrangements of safety and product liability insurance. With the enactment of CPA 2019,
operation, availability of lifeguards when the pool is the consumer shall have various rights and it shall be the
operational. For food & beverages the imposed warranties duty of manufacturers, retailers to service their clients
may be like insured shall all time maintain hygienic honestly and diligently.
conditions, insured shall take every precaution to ensure food
supplied is contamination-free and fit for human Rising incomes, techno-savvy younger generation, huge
consumption with proper packaging etc. consumer demands shall continue to attract large
companies to come and invest in India. It shall be a win-
Liability insurance policies are usually claim made policies win situation for consumers as well as companies with the
and have certain exclusions. These policies do not cover any growth of the Indian economy. Thus CPA 2019 was the need
pure financial losses like loss of goodwill, contractual of the hour and also the time has come when all the
liabilities, acts of god, liability arising out of any fines, interested parties to look into &seek coverages against legal
penalties, deliberate non-compliance of statutory provisions expenses which may arise due to any product failure. The
shall remain major exclusions under product liability new legislation comes with a bundle of accountabilities and
insurance policies.
responsibilities on manufacturers, suppliers and retailers to
serve the consumer and in a true sense making the
Conclusion. consumer the real king.
The liability Insurance market in India is growing at 10.3%
and presently of about Rs. 3000 crores. Liability insurance Reference:
like other branches of insurance protects the insured against Various Sources.

More mediclaim buyers use EMIs to buy policies

Non-life insurers are seeing rising demand for health policies under the equated monthly instalment (EMI) option.
Insurers attribute this to reduced affordability due to a fall in income and job losses, even as the need for a cover has
gone up due to the pandemic.
In September 2019, the Insurance Regulatory and Development Authority of India (Irdai) allowed companies to sell
policies with monthly, quarterly or yearly mode of payment. After the Covid pandemic broke out, in April this year,
Irdai directed insurers to extend this facility. Over a dozen companies now offer this option.

Most people opting for EMI mode are new-to-insurance customers. “As high as 40-45% in the EMI segment are first-
time buyers. About 40% opt for health coverage of Rs 5-10 lakh, and another 40% opt for the Rs 25 lakh-Rs 1 crore
sum insured,” said Policybazaar business head (health) Amit Chabra.
Over 70% of customers opt for family floaters. “With Covid, salaried people have lost their jobs or suffered pay cuts
while self-employed have seen the loss of revenue and cash flow issues. The coronavirus pandemic has heightened
fears. For many, the EMI option is the most prudent one,” said Gurdeep Singh Batra, national head (retail underwrit-
ing) at Bajaj Allianz General Insurance, which has offered an EMI option since August.

Insurers say that the EMI option costs 2% more to cover their increased working capital costs. “We have to send
reminders, our staff has to contact customers. But it makes selling easier as a monthly payment of Rs 500-800 doesn’t
really set someone back,” said Batra.

The Insurance Times, December 2020