Time for cover

Insurance is essential to safeguard against uncertainties. Big businesses spend a lot of time and money to get their businesses insured. The Shopkeeper Insurance Policy was introduced in the 1980’s and since then it is being modified to give wider coverage to small retailers. But not many retailers are aware of the safeguards available for them in case of any unfortunate circumstances. “In India only 9-10 percent of the unorganized retailers are insured as compared to 30-35 percent in organized retail,” explains Mr Suman Kumar, a senior executive at IFFCO Tokyo General Insurance. It is not only fire, but theft, burglary, fraud etc that can badly disrupt small businesses financially.

Examples abound of why small retails give the cold shoulder to insurance cover. “Ankit Traders” in Yusuf Sarai Market in South Delhi which recently caught fire incurred heavy losses leaving the owner in distress just because his business was not insured. “I could have recovered the loss if I hadn’t neglected the insurance for my shop,” regrets Mr Ramesh Sharma owner of Ankit Traders. “Insurance was never our priority. We were focused on increasing the business but never thought of any precautionary measure,” explains Mr. Sharma.

“It is very time consuming and requires a lot of paper work and a lot of follow up. I don’t have time to do that,” replied Ashok Kumar a retailer in Shahpur Jat. “We are extremely busy. We start at 7 in the morning and close at 10 in the evening. First of all, such things don’t occur to us and even if we think about it who will take the headache of searching and contacting an insurance agent and selecting the best deal?” replied another retailer, Anil Mittal. “Premium is the reason that prevents the retailers to get an insurance cover. It is considered as a cost rather than a long-term security. The share of unorganized retailers availing insurance cover is just 8 to 9 percent,” says Mr Suman Kumar.

Insurance companies like Iffco Tokyo, United India Insurance, Bajaj Allianz General Insurance, Oriental Insurance, New India Assurance, Tata AIG General Insurance, Reliance General Insurance, and Cholamandalam MS General Insurance offer a comprehensive “Shopkeeper Insurance policy” for small retailers. It is rather disheartening to note that the unorganized retail in India has neglected this aspect, and that too when the market is flooded with innumerable insurance companies, each one offering a competitive deal at a reasonable cost. The only thing required from small retailers is a little time to explore and access the deals and stop being ignorant and start thinking practically.

To get an insight into the Shopkeeper Insurance Policy, Retailer spoke to Mr Subir Bhattacharyya, Deputy GM, National Insurance Company.

Retailer: What percentage of the unorganized retailers avail shopkeeper insurance?

Subir Bhattacharya (SB): The share of retailers in unorganized retail segment getting insurance cover is a minuscule 5 percent (approx).

Retailer: What explains their lack of interest in getting their shops or business insured?

SB: Ignorance and lack of awareness is the root cause for shopkeepers to get a shopkeeper policy. They are ignorant in even discovering whether any such thing exists or not.

Retailer: Is premium a road block for getting insured?

SB: No, premium is not a bottleneck. It is not costly.

Retailer: What is covered in this policy?

SB: The policy is wide in cover; it covers fire and allied perils, burglary and housebreaking, fidelity etc.

Retailer: What are the policies apart from shopkeeper insurance policy available for shopkeepers?

SB: There are other standard fire and burglary policies available for them.

Retailer: As stated above ignorance and lack of awareness are the primary reasons for the reluctance of small retailers in availing the insurance cover, what are the initiatives taken by your organization to overcome this?

SB: We have a pan India presence and tie ups with bank in the form of Bank assurances.

Retailer: How can a shopkeeper approach you?

SB: They can go to the nearest office of the insurance company, get a proposal form filled and submit it with the premium amount. It is a hassle-free procedure.