Business Insurance
Property insurance protects what you own. Liability protects what you owe.
Business Insurance
Not one policy but a programme — covers arranged around what a business actually stands to lose: its people, its premises, its goods in transit, and its liability to everyone it deals with.
Most Indian businesses insure the building and stop. The larger exposures are usually elsewhere: a workforce with no group cover, goods moving uninsured, and liabilities that no property policy touches.
Since April 2021 two standard fire products — Bharat Sookshma Udyam Suraksha up to ₹5 crore of value at risk, and Bharat Laghu Udyam Suraksha from ₹5 crore to ₹50 crore — carry wordings common to every insurer.
What is business insurance?
Not one policy but a programme — a set of covers arranged around what a business actually stands to lose: its people, its premises, its goods in transit, and its liability to everyone it deals with.
Most Indian businesses insure the building and stop. The larger exposures are usually elsewhere: a workforce with no group cover, goods moving uninsured, and liabilities — to customers, to employees, to the public — that no property policy touches.
In plain terms: property insurance protects what you own. Liability insurance protects what you owe. A business needs both.
What a business programme covers
- Your people — group health, accident and life cover
- Your premises, plant, stock and equipment
- Your goods, in storage and in transit
- Your liability to employees, customers and the public
Standard fire cover for enterprises
Since 1 April 2021 IRDAI has required insurers to offer two standard fire and allied perils products for businesses, sized by the total value at risk, on identical plain-language wordings.
Bharat Sookshma Udyam Suraksha — Up to ₹5 Cr
The standard product for enterprises where the total value at risk across all insurable assets at one location does not exceed ₹5 crore.
Bharat Laghu Udyam Suraksha — ₹5–50 Cr
The standard product for enterprises where the total value at risk is more than ₹5 crore and up to ₹50 crore at one location.
Wording across insurers — Identical
Both products carry a common wording that every general insurer must offer. Comparison therefore turns on service and price rather than on the fine print.
In force since — 1 Apr 2021
The IRDAI guidelines covering these two products, and Bharat Griha Raksha for homes, took effect on 1 April 2021.
Source: IRDAI Guidelines for Standard Products for Fire and Allied Perils. Enterprises above ₹50 crore of value at risk, and those needing wider cover, use conventional or bespoke fire and engineering policies.
The covers a business typically needs
Which of these apply depends on what the business does, who it employs and what it moves. Very few businesses need all of them; almost none need only one.
Group health insurance
A single policy covering employees and, usually, their families. Typically issued without individual medical underwriting and often without the waiting periods that apply to retail cover — which is what makes it valuable to staff who could not easily buy their own.
Your employeesGroup personal accident
Fixed-benefit cover for employees against accidental death and disablement, on and off duty. Inexpensive relative to the sum insured and frequently the first cover a growing business adds.
Death and disablementGroup term life
Life cover for a workforce on a single contract, usually as a multiple of salary. A meaningful retention benefit as well as a protection one.
Death benefitEmployee’s compensation
Your liability under the Employee’s Compensation Act, 1923 to pay compensation for injury, disablement or death arising out of and in the course of employment. This is a legal obligation, not a discretionary benefit.
A statutory liabilityFire and property
Building, plant, machinery, furniture, stock and equipment against fire and allied perils. For most enterprises this is one of the two standard Udyam Suraksha products.
Premises and stockMarine and transit
Goods in transit by sea, air, road or rail, whether a single consignment or an open cover for the year. If you move stock, this is where a large uninsured exposure usually sits.
Goods in movementShopkeeper’s and office package
A packaged policy for a retail outlet or an office, combining property, burglary, money in transit, plate glass, electronic equipment and public liability in one contract.
Bundled coverProfessional indemnity
Cover for a claim arising from professional advice or services — negligence, error or omission. Standard for consultants, architects, engineers, accountants and technology firms, and a specific form exists for medical practitioners.
Advice and servicesPublic and product liability
Your legal liability for injury to a member of the public or damage to their property arising from your premises, operations or products. Separate statutory cover applies to enterprises handling hazardous substances under the Public Liability Insurance Act, 1991.
Third partiesCommercial cyber liability
First-party loss from a cyber incident and third-party liability where customer or employee data is compromised. The exposure most businesses recognise last.
Data and systemsManagement liability
Cover for the personal liability of a company’s board members and senior officers for claims arising from decisions taken in their managerial capacity.
Board and officersEngineering and project cover
Contractors’ all risks and erection all risks during a project, and machinery breakdown and electronic equipment cover once operational.
Construction and plantExposures businesses most often leave uninsured
- Business interruption. The income lost while premises are unusable after a fire or flood. The building is usually insured; the eighteen months of lost trading rarely are, and that is the larger number.
- Goods in transit. Stock moving between a supplier, a warehouse and a customer, frequently assumed to be the transporter’s risk when the carrier’s liability is in fact narrowly limited.
- Employee liability. Statutory liability under the Employee’s Compensation Act for injury at work, which is a legal obligation rather than an optional benefit.
- Public liability. Injury to a visitor, a customer or a passer-by arising from your premises or operations.
- Professional liability. A claim that advice or a service caused financial loss — the principal exposure of any business that sells expertise rather than goods.
- Cyber and data. Systems compromise, ransomware and liability for a data breach affecting customers or employees.
- Key equipment breakdown. Machinery or electronic equipment failing, which a fire and perils policy expressly excludes.
- Money in transit. Cash between the premises and the bank, and cash held on the premises.
- Fidelity. Loss caused by dishonesty of your own employees, which no property policy covers.
What is not covered
Wear, tear and gradual deterioration
Maintenance, ageing and gradual failure are not insured events under a property policy.
Deliberate acts
Loss caused deliberately by the insured or with the insured’s connivance.
Consequential loss, unless insured
Lost profit and lost trading following damage are covered only if business interruption cover is specifically in force.
Undeclared stock or values
Property, stock or locations not declared to the insurer, and values understated at proposal.
Unlicensed or non-compliant operations
Activity carried on without the licences, approvals or statutory compliances the business requires.
Contractual liability
Liability accepted by agreement that would not otherwise attach at law, unless specifically covered.
Fines and penalties
Regulatory fines and punitive damages are generally uninsurable.
Known circumstances
A claim or circumstance already known at inception, particularly relevant to liability and professional indemnity cover written on a claims-made basis.
War, nuclear and pollution
Standard across commercial classes, though pollution arising suddenly from an insured event may be covered.
How we approach a business programme
Insurance placed piecemeal produces gaps and duplication in equal measure. We would rather start from the balance sheet and the operations.
Map the exposures first
What you own, what you owe, who you employ, what moves and what you promise customers. Cover follows from that list rather than from a product catalogue.
Separate statutory from commercial
Employee’s compensation and, where applicable, public liability under the Public Liability Insurance Act, 1991 are legal obligations. They are placed first, and separately from the discretionary covers.
Size the interruption, not only the asset
Reinstating a factory takes months. Cover the trading loss over a realistic indemnity period, not a nominal one.
Decide on claims-made versus occurrence
Liability and professional indemnity policies are commonly written on a claims-made basis, meaning the policy in force when the claim is made responds. Continuity of cover and the retroactive date then matter more than any single year’s premium.
Use the standard products where they fit
Bharat Sookshma Udyam Suraksha and Bharat Laghu Udyam Suraksha carry identical wordings across insurers, which makes comparison genuinely straightforward for enterprises inside their value bands.
Treat group health as retention, not just risk
For most employees, the group policy is the only cover they hold. Its design — sum insured, family definition, parental cover, room-rent terms — is read closely by the people you are trying to keep.
Review annually against actual values
Stock, turnover, headcount and asset values move. A programme reviewed once and renewed on autopilot is either underinsured or paying for cover it no longer needs.
Rehearse the claim path
Who reports, to whom, within what time, with what records. Most disputed commercial claims fail on notification and documentation rather than on cover.
How to choose a policy
The checks that change the outcome, in the order they matter.
How a claim actually works
Most rejected claims fail on process rather than on cover. These five steps are the process.
Make the site safe and limit further loss
Preserve life and property first, then take reasonable steps to prevent the loss growing. Every commercial policy requires it.
Notify immediately, and in writing
Within the period stated in the policy. For liability and professional indemnity written on a claims-made basis, notify the circumstance as soon as you become aware of it — not when a claim is finally served.
Report to the authorities where required
Police, fire service, factory inspectorate or the relevant regulator, depending on the event. For a cyber incident, the applicable reporting obligations apply alongside the insurance notification.
Preserve records and evidence
Damaged property, stock records, purchase invoices, accounts, contracts, and the correspondence relevant to a liability claim. Do not dispose of anything before the surveyor has attended.
Survey, assessment and settlement
A surveyor assesses property and business interruption claims; liability claims are handled with the insurer’s appointed advocates. Do not admit liability or settle with a claimant without the insurer’s written agreement — doing so can void the cover.
Myths and facts
Terms you should know
Frequently asked questions
Other products in our suite
Not sure if this fits your plan?
Tell us your goal and timeline. We will tell you honestly whether Business Insurance belongs in your portfolio — or whether something simpler would serve you better.
- A senior advisor calls you, not a call centre
- Recommendation matched to your goal and risk profile
- Written summary after the call
- No cost and no obligation
Is Business Insurance right for you?
Every product suits a particular goal, horizon and temperament. A short conversation is the fastest way to find out where this fits in your plan — or whether something else serves you better.