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Mr. Y a cloth-shop owner, closes his shop after 8 pm. One day he closed the shop but forgot to turn off a cloth iron.Unfortunately, due to heating there was sparking and the whole shop was burnt. He suffered a great loss. A friend advised him that he should take insurance to secure his business from such accidental losses. Which insurance was his friend talking about? Also, explain the procedure of taking such insurance. |
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Answer» Fire insurance. Procedure of buying fire insurance: A. Selection of Company: The fire insurance company with which the insurance is to be effected must be identified. B. Proposal Form: Fill the proposal form which forms the basis of the contract. Details to be filled up: Name and Address of the Proposer, Nature of Business, Details of Asset to be Insured, Required Type of Fire Insurance Policy e.g., Specific Policy, Comprehensive Insurance. C. Evidence of Credibility: The Insurance Company checks the credentials of the proposer to establish his credibility. D. Survey of the Property: The Surveyors inspect the property carefully to estimate the degree of risk involved. It is on the basis of the Surveyor’s Report that the Insurance Company accepts or rejects the proposal. E. Acceptance of Proposal Form: On the basis of the proposal and the Surveyor’s Report the Insurance Company would accept or reject the proposal. In case the proposal is accepted the rate of premium is quoted. F. Commencement of Risk: Once the premium is paid the coverage of risk would commence. G. Cover Note: If the Insurance Company accepts risk, it issues provisional protection to the Insured by a document known as Cover Note. H. Policy: The Insurance Company issues the Fire Insurance Policy. |
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