Prajna Capital - An Investment Guide

FOR the first time, a general insurer has started covering ‘exclusions’ at a slightly higher premium after the Insurance Regulatory Development Authority ( IRDA ) allowed partial freedom of wordings. In insurance parlance, ‘exclusions’ relate to developments where insurers will not come up with a compensation. These are explicitly mentioned in the wordings of any policy. For one, till sometime ago, if there was a fire in a factory, insurers did not pay claims for the equipment that specifically triggered it. The policy only paid for damages caused to other equipment and premises as a result of the fire. From now on, the equipment that caused the fire is also being covered at an extra premium. In insurance parlance, the event of not covering the equipment that sparks off the fire is called the dynamo clause . We are doing away with the dynamo clause in any industrial policy at an extra premium. These are exclusions that have been part of the standard wordings for quite sometime. Howe...