In light of the Covid-19 pandemic and the ensuing movement control order (MCO), the General Insurance Association of Malaysia (Piam) has urged consumers and business owners to review their property insurance policies such as their fire insurance and business interruption coverages where necessary.
It said the situation is unprecedented and that all businesses and service providers are making every effort to ensure that their customers or policyholders continue to be served within the parameters of their respective contracts or agreements.
“In this respect, not all insurance companies are providing the same coverage for an insurance policy,” said Piam in a statement today.
It confirmed that all relevant fire policy coverage which are conditioned on the premise being occupied will not be affected by restrictions imposed by the MCO.
“In short, policyholders are assured continuity of cover despite their premises not occupied during the MCO period. However, policyholders are expected to take all reasonable precautions to safeguard their premises during this period,” said Piam.
However, it pointed out that the exemption is not applicable to premises unoccupied prior to or not related to the MCO.
Generally, basic fire insurance policy provides protection for buildings and/or its contents from losses or damages caused by fire, lightning and domestic gas explosion.
It may also be extended to include special perils such as storm and tempest, earthquake and volcanic eruption, flood damage, impact damage, riot, strike, malicious damage, landslips and landslide among others.
For businesses, there may be additional extensions to cover electrical installation, bush fire, spontaneous combustion, sprinkler leakage and smoke damages.
The business interruption insurance, which can only be taken together with fire insurance, provides indemnity to the insured in respect of loss of profit.
“A business interruption policy compensates loss of gross profit resulting from a fire including damage by any additional perils specified in the material damage policy. This is in respect of reduction in turnover and increase in cost of working,” Piam explained.
It pointed out that the policy can be extended to include cover; specified/unspecified supplier’s extension; prevention of access extension; public utilities extension (water, electricity and gas); specified customer’s extension; infectious or contagious diseases, murder, suicide, pest, food or drink poisoning or defective sanitary arrangements.
Piam also advised consumers that under the current de-tariff environment policy coverage, terms and conditions may differ between one insurer and another.
It said insurers strive for product differentiation for the benefit of consumers, adding that what is covered in one policy may not be covered in another policy, therefore consumers are advised to shop around for the best protection that caters to their needs.
It also advises consumers and business owners to contact their respective insurers and insurance agents or brokers for any assistance/clarifications on their property insurance policies.
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