Q: We are a servicing company and our business depends entirely on computer systems which are covered under our property policy. Do we need to take out a special computer insurance policy and can we cover our computer records in case of loss? A: Your current property policy covers loss or damage to your equipment only, i.e. the cost of physical damage caused to your hardware. The loss of records will not be covered under this policy. However, since your prime assets are computers, I would suggest that you to get a Computer All Risks policy. This will give you broader coverage and a chance to opt for additional covers. Under a Computer All Risks policy, you can cover your computer hardware to its replacement value. If you want to additionally cover your computer system records, you can do so by declaring the restoration values. You can also get coverage for consequential loss under the same policy. Once the hardware is covered under the Computer All Risks policy, you can remove the same from your property policy and get the necessary refund on the premium under the property policy. Q: We are a manpower supplier for a prestigious organization in the Eastern Province. We provide more than 500 vehicles to our consultants. Our insurance premium is about 2 million per year and our claims ratio has always been 70 to 80 percent. Our insurers have always refused to give us discounts in spite of the above ratio. How can we create savings in our insurance expenses? A: From the perspective of the client, the insurer seems to be a making a profit irrespective of the margin. But from the perspective of the insurer, they need to build in different costs in addition to the actual loss ratio. Since your motor portfolio is a large portfolio and the processing of motor claims takes one to three months from the date of accident, some claims do not get into the system while computing the claims ratio. Plus there is a re-insurance cost involved, apart from the marketing. The cost of administration of claims is also a major cost for the insurer which may not be reflected in the claims ratio provided by the insurance company. All the costs may be anywhere between 10 to 30 percent. Hence, it may not be possible for the insurer to give you a discount. However, if you have the capacity for the reduction of the claims ratio by adopting certain measures, then you may request your insurer to add a profit-sharing clause into the policy. – Shujaath Ahmed Khan, an MBA, General Manager, Creative Associates is also a consultant and an expert in Insurance, Investments and Real Estate. He can be contacted at [email protected], website-www.creativeassociates.blogspot.com. __
