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Bharat Laghu Udyam Suraksha Policy

  • Author :
  • TATA AIG Team
  • Published on :
  • 11/04/2024
  • 2 min read

With the introduction of the Bharat Laghu Udyam Suraksha Policy in 2021, IRDAI brought about a pragmatic change in the insurance market for all Small and Medium Enterprises (SMEs). Since this policy particularly benefits SMEs, understanding the intricacies of the Bharat Laghu Udyam Suraksha policy wordings can immensely assist them in protecting their businesses from unforeseen risks.

What is Bharat Laghu Udyam Suraksha Policy?

Bharat Laghu Udyam Suraksha Policy, also known as the BLUS insurance policy, has been designed for Small and Medium Enterprises (SMEs). It offers comprehensive coverage against fire and related risks, including natural calamities, explosions, fires, and terrorism.

It serves as a safeguard for businesses with total insurable assets ranging from ₹5 Crore to ₹50 Crore. This ensures financial protection against unforeseen events. By availing of the Bharat Laghu Udyam Suraksha insurance, SMEs can mitigate the potential impact of disasters and maintain business continuity.

Bharat Laghu Udyam Suraksha Coverage

Bharat Laghu Udyam Suraksha coverage extends to various aspects that are crucial for Small and Medium Enterprises (SMEs).

The policy coverage can be divided into two:

  • Standard Cover: This policy safeguards the building and its associated structures, including fences, security systems, garages, and more. Finished goods, raw materials, and stock in the process are also covered.

    Additionally, it provides coverage for essential assets like plants and machinery, including software, cables, pipes, and computers. This ensures overall protection against potential risks. Furthermore, assets such as furniture, equipment, and fixtures receive courage under this policy as well. This ensures comprehensive protection for SMEs and their diverse assets.

  • In-built Cover: In-built cover may include any additions, alterations or extensions made to property up to 15%, cover for specific contents like money, computer programs and IT-related data, important documents, etc., start-up expenses, cost incurred for complying with municipal authorities for the reconstruction of property, etc.

Risks Covered Under The Bharat Laghu Udyam Suraksha Policy

Bharat Laghu Udyam Suraksha insurance offers coverage for various risks that businesses may face, which provides them with financial protection against potential losses. Here is a brief overview of the risks covered under the Bharat Laghu Udyam Suraksha Policy:**

  • FLEXA (Fire, Lightning, Explosion, and Aircraft Damage):

    Bharat Laghu Udyam Suraksha Policy safeguards businesses against damages caused by fire, lightning, explosions, and aircraft-related incidents. These perils pose significant risks to properties and assets, and Bharat Laghu Udyam Suraksha insurance ensures comprehensive coverage against such events.

  • RSMD (Riots, Strikes, and Malicious Damage):

    Riots, Strikes, and Malicious Damage can result in substantial harm to inspired businesses. Bharat Laghu Udyam Suraksha insurance extends coverage for damages arising from these events and ensures that businesses remain financially protected in case of civil unrest or deliberate acts of destruction.

  • Missile Testing Operations:

    Operations involving missile testing can lead to unforeseen damages to properties in the event of launch failures or execution errors. Bharat Laghu Udyam Suraksha insurance provides coverage for losses, destruction or damages caused to insured businesses during missile testing operations. This offers a robust safety net against unexpected incidents.

  • Terrorism:

    Acts of terrorism pose significant threats to businesses, causing property damages and financial losses. Bharat Laghu Udyam Suraksha insurance offers coverage against damages resulting from terrorist activities, providing insured businesses with financial security amidst security concerns.

  • Theft within Seven Days of the Event:

    While standard fire insurance policies exclude coverage for theft-related losses, Bharat Laghu Udyam Suraksha insurance offers an exception for theft occurring within seven days of a covered event. This provision ensures that businesses are adequately protected against theft-related losses that may occur in the aftermath of a covered incident.

Exclusions Under The Bharat Laghu Udyam Suraksha Policy

  • Excess Deductibles:

    Claims under the Bharat Laghu Udyam Suraksha policy are subject to an excess of 5% of each claim, with a minimum deductible of ₹ 10,000. This means that the insured businesses must bear the initial portion of any claim before the insurance coverage is applicable.

  • Deliberate Acts Loss:

    The Bharat Laghu Udyam Suraksha policy does not cover losses resulting from deliberate, wilful or intentional acts or omissions by the insured businesses or anyone acting on their behalf with their permission.

  • Electronic Damage Loss:

    The policy excludes the loss, damage, or destruction of electrical machinery or equipment, apparatus, fixtures, or fittings due to specific causes such as overrunning, excessive pressure, short circuit, or self-heating. However, subsequent losses to other insured property caused by these events are covered.

  • Cold Storage and Spoilage Loss:

    Loss or damage to stocks in cold storage premises due to temperature change or spoilage resulting from process interruption is not covered under the policy.

  • Unoccupied Premises Risks:

    Properties or buildings left unoccupied for more than 30 days without prior written approval from the insurance provider are excluded from coverage.

  • War and Nuclear Risks:

    Damages arising from war, invasion, civil unrest or nuclear-related incidents, including ionising radiation or contamination, are excluded from coverage.

  • Pollution and Contamination Loss:

    Losses caused by pollution or contamination are only covered if they result directly from an insured event. Losses caused by pollution or contamination itself are not covered unless they result from a covered event.

  • Bullion Loss:

    Loss or damage to bullion, unset precious stones, curios or works of art are only allowed if they are expressly declared and recorded separately in the policy schedule.

  • Consequential Losses:

    The policy does not cover any consequential or indirect losses, such as loss of income, market value reduction, medical expenses, or costs not explicitly covered under the policy.

  • Marine Policy Exclusion:

    Loss or damage covered by an existing marine policy is excluded, except for amounts exceeding the limits of the marine policy.

  • Claim Preparation Costs:

    Costs, fees, or expenses incurred in preparing any claim are not covered under the policy.

Conclusion

To conclude, the Bharat Laghu Udyam Suraksha policy has been a significant addition to the business insurance industry. With SMEs particularly benefiting from this coverage option, its comprehensive design safeguards from crucial risks like fire and fire-related incidents.

This policy's coverage extends to diverse aspects while incorporating essential characteristics of fire insurance policies that are standardised in the market. However, investing in a fire insurance policy for a business can be a tedious process.

Investing in business insurance with a reliable insurance provider like Tata AIG makes purchasing as well as renewal-related processes seamless.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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