New Delhi, March 15 (IANS): Amid concerns of a business and economic disruption due to the coronavirus pandemic, the Confederation of All India Traders (CAIT) has asked the government to direct the insurance companies and the regulator to come up with insurance policies to cover the disruption caused to businesses due to coronavirus.
In a letter to Finance Minister Nirmala Sitharaman, the traders' body has said that insurance companies may be mandated to introduce 'Disruptions due to Coronavirus' as an additional cover to 'Fire and Materials Damage' policies and the existing policyholders may be offered an option to add the clause of 'Disruptions due to Coronavirus'.
"It is pertinent to note that business interruption insurance available abroad in different countries, cover loss of income suffered by a business as a result of disruption to their operations and therefore we request you to kindly advise the Insurance Regulatory Development Authority (IRDA) to mandate insurers in India to introduce insurance coverage for disruptions in business due to coronavirus," the letter said.
CAIT Secretary General Praveen Khandelwal noted that several educational institutions, cinema halls, gyms and other service-oriented businesses have been shut temporarily as precautionary measures. Both trade and MSME sector is likely to have negative economic impact as many industries and trade may end up closing or face disruption in supplies, cancellation of events, contracts, travel among others and each of these have significant costs associated, he said.
Further, he also said that that traders and shopkeepers should come in contact with many clients daily and they have a higher risk of being exposed to the deadly virus. CAIT National President B.C. Bhartia added that while traditionally, businesses and traders in India have viewed fire or natural calamities as the major and common risks and have taken coverage for them and some have taken loss of profit or business interruption coverage too, these policies cover losses arising out of fire, related risks and material damage.
None of these policies will compensate losses arising out of interruption in operations and extra expenses to keep the business running during the disruption, due to coronavirus or losses from supply chain disruptions or a forced government shutdown of a covered facility or event and travel disruptions related to the coronavirus, Bhartia said.
The traders' body further said that business interruption insurance is available abroad in different countries, which cover loss of income suffered by a business as a result of disruptions to their operations.