Burglary policy is available to commercial establishments, factories, godowns, shop etc. Property in any form including cash, in the business premises can be covered.
The risks covered are:
- Theft of property after actual forcible and violent entry into the premises or theft following actual, forcible and violent exit from the premises.
- Damage to insured property or premises by burglars, cash cover operates only when cash is secured in a safe and is granted only if the said safe is burglar proof and is of an approved make and design.
The cover is granted subject to the following two clause:
- The loss of cash abstracted from the safe following the use of the key to said safe or any duplicate thereof belonging to the insured is not covered unless such key has been obtained by violence or threats of violence. This is generally known as “key clause”.
- A complete list of the amounts of cash in safe should be kept secure in some place other than the safe.
Some important exclusion under the policy are:
- Theft by persons lawfully on the premises (larceny or ordinary theft is not covered).
- Loss insurable under fire or plate glass policy.
- The policy can be extended to cover riot, strikes and terrorism risks at extra premium.
The policy can be extended to cover riot, strikes and terrorism risks at extra premium.
In the event of under-insurance, pro-rata average is applied. However, where bulk commodities or heavy machinery are involved and the value is large, the sum insured can be agreed, to be less than the value and pro-rata average can be waived. For example, where the value is Rs 100 lacs the sum insured can be fixed at a percentage, say 25% or 40%, etc. of the value. This is known as”first loss” policy. This policy is issued where probability of total loss by burglary is remote.
Burglary policies can be issued on a declaration basis or floating basis. according to the practice in fire insurance.
Rates of premium depend upon the nature of insured property, construction and location of premises, safety measures (e.g. watchmen, burglar alarm) etc.