December 22, 2021

Money Insurance

Money Insurance

Money Insurance, also known as Cash Insurance, protects a business against loss of cash due to risks like theft, holdup, dacoity, robbery, or any other mishap. Money that has been drawn for the payment of wages or for petty cash can be covered under this policy while it is stored in the shop/office or moved around for transfer.

Running a business involves multitudes of monetary transactions with suppliers, customers, partners, investors, employees, and other stakeholders. And so, there’s constant movement of money in various forms, like cheques, cash, drafts, postal orders, stamps, and more.

But, regular transfer and safekeeping of money involves a great deal of risk. Loss of money in transit or in a stronghold due to theft, robbery, or holdup can lead to major financial damage to your business. The good news is, you can insure your monetary assets from such losses with the help of Money Insurance.

Money Insurance offers wide coverage against loss of cash due to theft, burglary, holdup, and other similar unexpected events. It is further divided into two categories -

  • Cash in Transit, which covers loss of money while it is carried by the insured or the insured’s representative, such as an employee. Primarily this covers loss of money whilst in transit between the bank / postal office and the business premises. In some cases, coverage is extended to the cash being carried by the designated / authorised employees.
  • Cash in Safe, which covers loss of money while it is stored in a safe, strongroom or other device for safekeeping within the business premises

This policy only covers physical money for which the insured or their representative is responsible. It does not cover digital transactions that do not involve a physical monetary instrument.

The term ‘Money’ in Money Insurance includes cash, coins, bank drafts, currency notes, promissory notes, bonds, bills of exchange, cheques, traveler’s cheque, postal order, money order, pay order and current postage stamps, along with other monetary instruments used in connection with the business that are issued by any bank, post office, or the Government Treasury.

This policy covers loss of cash or currency due to the following events :

  • Burglary, holdup, robbery, theft, waylaying, snatching away or any other similar unexpected event while the money is in direct transit (i.e. being carried by the insured or their authorised employee) from the business premises to the bank and vice versa. This includes money in the personal custody of the insured or an authorised employee
  • Burglary, housebreaking, robbery or hold-up while the money is secured in a locked safe or locked strong room on the premises. This includes money kept in a till
  • Cost of replacement or repair of your safe or strong room at your premises in the event of it being damaged by thieves or burglars

Money Insurance also offers the following additional covers :

  • Foreign Currency - Foreign currency can be specifically declared and covered under this insurance. However, claims will be settled in accordance with the prevailing RBI exchange rates
  • Injury or death to employee - If the authorised person carrying the money is injured during a burglary or holdup leading to disablement or inability to work, they will be liable to receive compensation subject to a maximum of ₹1,00,000

This policy excludes the following from coverage :

  • Shortage of money due to error or omission
  • Loss of money entrusted to any person other than the insured, a director of the company or an authorised employee
  • Loss of wages or salaries kept in the premises 48 hours after they have been withdrawn from a Bank or other place
  • Loss occurring on the premises after business hours, unless the money is in a locked safe or strong room
  • Loss induced by riots, strikes or malicious damage
  • Loss or damage due to terrorist activities, including loss due to acts of suppression, prevention or control of such activities
  • Money carried under contract of affreightment (agreement with an external carrier) and theft of money from an unattended vehicle
  • Loss of money during wire transfer, transit by post or courier service, internet related fraud, or counterfeit money
  • Loss of money from safe or strong room following use of the key to the safe or strong room or any duplicate thereof belonging to the Insured unless obtained through violence or a threat thereof
  • Loss of money due to war and related perils, and nuclear perils
  • Consequential loss or legal Liability of any kind
  • Loss of money due to breach of trust by the insured in relation to the money

Money Insurance is ideal for small businesses that regularly deal with transactions involving physical money. Regardless of ample security measures, the risk of you losing your money due to unexpected events like a robbery, holdup or burglary is still unavoidable.

Money Insurance is a relatively small policy compared to other Property Insurance policies. For this reason, businesses opt for Money Insurance as an add-on to Fire Insurance policies like BSUS, BLUS, or SFSP.

Know more: Supplementary policies in a Fire All Risk Package

Opinions, conclusions and statements of intent expressed in this article are that of the author and Verak does not accept liability for the views expressed unless confirmed by an authorized representative of the Company independently of this communication.