Q: We are having a Fidelity Guarantee policy with one of the major insurers. Recently while going through the policy I found that our total sum insured based on the all the individuals was more than SR3,000,000. We are having almost 32 employees each insured against a varying sum insured of SR75,000 to SR150,000, but the insurance company has put a condition. It is subject to an aggregate limit of SR1,000,000. This condition was not there in our previous policy. However, they are charging premium on the gross sum insured which is over three million. They are not able to give clear explanation? A: The policy which you have talked about puts the insurer's liability to SR1,000,000 a year. This is a normal practice for such policies. Initially, when you started this policy the number of people insured might have been less and the sum insured also would have been less than one million. Hence the insurers do not apply or by oversight they might have missed this limit. As your organization grew, then the overall limit exceeded the limit of the insurance company. In that case then put the limit. As far as charging of the premium is concerned, the correct way is to rate on the gross sum insured and not on the limit. The limit, however, does influence the rating. I feel that the limit given by the insurance company is reasonable. However, you have option to get it increased to say 1.5m or so. The chances of all employees taking the full amount of money are remote. Q: I had taken a motor insurance policy recently. On going through the policy I found that I am having a cover for emergency medical expenses up to SR1,000. What is this amount and why it is so less and who are eligible to get this amount? A: Motor insurance policy covers damage to the insured vehicle and liability to third parties. It sometimes extends to cover personal accident and medicare coverage. Your insurance should cover your general medical expenses and your GOSI should take care of your work-related medical expense. The intention of emergency medical expenses is to cover the people sitting in your vehicle in case of injury when the insured vehicle meets with an accident. This is a basic coverage and covers only emergency medical expense as a result of vehicle accident. It is always less, as the intention is not to provide general medical coverage. If you want a higher coverage then you have to go in for fullscale medical policy. * Shujaath Ahmed Khan, an M.B.A., 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 __
