| INSURE AT YOUR OWN RISK
Planning to buy an insurance policy to protect your household
goods and valuables against burglary? If you are, I suggest
you look at the terms and conditions carefully before buying
the policy. In many cases of robbery these days, household help
are involved -directly or indirectly. Despite you are having
a valid policy, the insurance company may not indemnify your
loss at all! Surprised? Look at the case of Surender Singh Chauhan.
On October I 6, I 998, valuables worth Rs.27,400 went missing
from Chauhan’s house. Police investigations revealed that the
housemaid had helped her paramour steal the goods. Chauhan congratulated
himself for having had the foresight to insure all his household
articles, including jewellery and other valuables, against theft.
Confident that he was well covered, he wrote to the insurance
company, asking them to indemnify the loss suffered by him.
The insurance company, however, repudiated the claim on the
ground that the theft had been committed by an ‘employee’, which
came under the exclusion clause of the policy! Under ‘special
exceptions’, the policy stated “The company shall not be liable
in respect of loss of damage by burglary and / or housebreaking
when any employee of the insured or member of the insured’s
family is concerned as principal or accessory”.
So the main issue before the National Consumer Disputes Redressal
Commission was whether the domestic help working in the house
came under the definition of ‘employee’. While the complainant
argued that the relationship between him and the household maid
could be termed as that of ‘master and servant’ and not that
of an ‘employer-employee’, the insurance company contended that
according to judicial decisions, ‘employee’ means any person
who was employed for hire or reward to do any work, skilled
or unskilled, manual or clerical, in a scheduled employment
in respect of which minimum rates of wages had been fixed. Eventually,
the Apex Consumer Court ruled in favour of the insurer (Surender
Singh Chauhan Vs. United India Insurance Company, RP No. 2455
of 2002)
So whenever you opt for a policy to protect your household
goods and valuables, look at the terms and conditions very carefully
and see whether the policy gives you a cover against theft by
servants too.
In fact, insurance companies should remove this special exception
from householders’ policies. (BL)
The Insurance Times july 2005
| 
