Burglary Insurance

Burglary Insurance is one of the major classes of business underwritten in the miscellaneous department and accounts for a sizeable portion of the department’s premium income.

For the business house Burglary insurance is as essential as Fire insurance, as it enables them to recoup the losses suffered by them consequent on burglary or house breaking. In addition to the burglary policy, other types of policies giving wider covers have also been devised by the burglary department. The main types of policies are as follows:

(i) Business Premises Policy

(ii) Private Dwelling Policy

(iii) Jewellary and Valuable Policy

(iv) All Risk Policy, and

(v) Money in Transit Policy

Definitions:

Burglary:

The criminal law of the country does not speak of an offence called burglary. Hence it becomes necessary for the insurers to lay down in the policy the definition of the term. As normally understood burglary is:

(a) Theft of property from the premises following upon felonious entry of the said premises by violent and forcible means.

(b) Theft by a person in the premises who subsequently breaks out by violent and forcible means provided there shall be visible marks made upon the premises at the place of such entry or exit by tools, explosives, electricity or chemicals. Use of force may be against property and person.

Theft:

Indian Penal Code in Section 378 defines theft as follows: “whoever intending to take is honestly any movable property out of the possession of any person without the consent of that person or of any person having for that purpose authority, moves that property in order to such taking is said to commit theft.”

House-breaking:

The word in practice is equal to ‘Burglary’. Section 445 of the Indian Penal Code has laid down a definition of the term.

A person is said to commit housebreaking who commits house trespass if he effects his entrance into the house (or any part of it), or if being in the house (or any part of it) for the purpose of committing an offence, or having committed an offence therein he quits the house, such entrance or exit being made by use of force in one of the six ways as described in the Indian Penal Code.

Robbery:

Section 390 of the Indian Penal Code laid down, “If in order to the commission of or in committing of the theft or in carrying away property obtained by theft, the offender, for that end, voluntarily causes (or attempts to cause) to any person death or hurt or wrongful restraint or fear of instant death or hurt or wrongful restraint or fear of instant death or hurt or wrongful restraint”.

Dacoits:

Section 391 of the Indian Penal Code states dacoits as “where five or more persons conjointly commit or attempt to commit a robbery or are present and aid such commission or attempt, every one of them is said to commit dacoits”

Coverage:

Business premises are generally covered against burglary and house breaking only. Mere theft without the use of force and violence is not covered, robbery and dacoits being aggravated forms of theft.

It also covers risk of holdup. Burglary and house breaking fall within the scope of this cover. Under policies issued for private dwellings, the contents are covered against burglary, house-breaking and theft risks. Similarly Jewellery and valuables are also insured in the same manner.

Money in Transit:

Policies, as a matter of rule, cover robbery, hold-up and dacoits in addition to burglary, house­breaking and theft.

Business Premises Insurance Policies:

Policies issued to business premises cover stock-in-trade, goods in trust or on commission, fixtures and fittings, tools of trade such as typewriters, calculators and other similar property and cash and currency notes in locked safe against the risk of burglary and house-breaking.

Loss or damage to contents or to any part of the building caused by burglary or any attempt therefore is also covered. In regard to stock-in-trade and other goods the policy may be issued on full value basis or on “first loss” basis.

A “First Loss” ‘Policy insures the property up to a specified amount only which is calculated to be the maximum likely loss on any one occasion. This type of policy is taken where a total loss is a physical impossibility.

First loss policies are usually taken for bulk commodities. The amount insured is always specified as a certain percentage of the full value, say, 10% or 12.5% of the full value.

The amount of premium-loss reinsurance was Rs. 16.60 crores by New India in 1994-95. It has got profit of Rs. 12.12 crores in that year.

Cash-in-Safe Insurance:

The cover includes only when the cash is secured in a safe and is granted only if the safe is burglar proof and is of an approved make and design. Safe which is permanently installed in the premises is a better risk than a safe which can be shifted. The cover is granted subject to the following two clauses.

(a) The loss of cash obstructed from the safe following the use of the key to the said safe or any duplicate these of belonging to the insured is not covered unless such key has been obtained by violence or through means of force.

The use of force need not necessarily be against the person or an individual. It can be against property as well. Thus cupboard is removed after forcing open the cupboard, the loss is covered by the policy.

(b) A complete list of the amount of cash in safe should be kept secure in some places other than the safe and the liability of the insurer is limited to the amount actually shown by such records.