Across the world, General Insurance is known as Property & Casualty Insurance or Non Life Insurance and insurance companies are known as P&C/Non Life Insurers. Commercial Lines insurance is a subset of property and casualty insurance. Where life, health, accident and disability insurance policies insure people, and not things, these lines of insurance are called “Personal Lines” or “Consumer Lines” of business. Property and casualty covers the risk of loss or damage to things, or liability that may arise from an accident or negligence. Commercial lines are lines of insurance that cover businesses, rather than property belonging to an individual. Policies under this segment are offered to commercial/business entities such as SME/MSME industries, large corporate houses etc. and provides cover for various business and related needs. Like in personal insurance, Commercial Lines of business are purchases by companies to cover financial and business risks that the organisation may face in the future, which will have a financial bearing on the company.
Commercial Lines products are usually designed for all types legal entities. These would include workers’ compensation (employers liability), public liability, product liability, commercial fleet and other general insurance products sold in a relatively standard fashion to many organisations. There are many companies that supply comprehensive commercial insurance packages for a wide range of different industries, including shops, restaurants and hotel, and sectors ranging from Construction to IT/ITES to Manufacturing to Telecoms to Trading Houses etc…
Some of the most common types of Commercial Insurance Policies are : Property (of Fire) Insurance This is one of the most widely purchased commercial insurance policies. The policies cover damages to your commercial properties (office buildings, high rise homes). For instance, a fire or flood damaging your office/home space will be covered under such policies. Employee Benefits Insurance These policies will ideally provide Health and Personal Accident insurance cover to employees of organizations under policies known Group Mediclaim or Group Personal Accident plans or Group Term Life. Marine (or Transit) Insurance These policies deals with coverage for marine cargo risks during their transportation from one place to another (both domestic and international) for all types of industries such as oil and gas, paper and pulp, steel mills, manufacturing, food and beverages etc. Liability Insurance These policies are normally taken by large multi nationals looking to safeguard their business from large financial risks due to accusations of negligence brought against them by employees, clients, customers, shareholders, investors, or members of the public across all their operations worldwide. The policy will typically cover bodily or personal injury and property damage, product liability, product recall, workers’ compensation etc. Shopkeeper’s Insurance This type of policy is for smaller SME/MSME organisations and covers damage to shop buildings and contents, theft, burglary, cash insurance, personal accident, liability etc. Cyber insurance Cyber Insurance is an insurance product used to protect businesses and individual users from Internet-based risks, and more generally from risks relating to information technology infrastructure and activities. Coverage provided by cyber-insurance policies may include first-party coverage against losses such as data destruction, extortion, theft, hacking, and denial of service attacks; liability coverage indemnifying companies for losses to others caused. Other Policies Hulls of Ship and boats can be insured under Marine Hull Insurance. Further, there are specialized policies available such as Aviation Insurance Policy for insurance of planes and helicopters.
In the Indian General Insurance Industry, currently 28% of the Total Insurance GPW amounting to Rs.42,411 crores are categorised as Commercial Lines of business which is growing at less than 10%.
Group Health (GMC) is currently 43% of the Commercial Lines business with a premium of Rs.18,388 crores in 2017-18 followed by Fire Insurance at 26% of overall GPW with a premium of Rs.10,911 crores for the same period.
Liability Insurance is currently at 5% of the overall business but is the fastest growing lines of Commercial Lines business.