Companies in India are at risk of having their insurance policies lapse during business closures caused by government-imposed lockdowns to stem the spread of COVID-19.
On behalf of its clients, the Insurance Brokers Association of India (IBAI) has approached the country’s insurance regulator, requesting the extension of existing policies for a minimum of 60 days by paying pro-rated premiums at the current terms and rates, Times of India reported.
In its request, the association also asked the Insurance Regulatory and Development Authority of India (IRDAI) to temporarily relax the rule that requires insurers to have received the premium before providing cover. In order to avoid a gap in coverage, companies must pay premiums before the current policy expires.
According to the report, many business insurance policies are annual contracts. While these can be purchased any time of the year, many businesses buy them coinciding with the start of the Indian fiscal year on April 01, for ease of accounting.
IBAI president Sanjay Kedia said that many overseas insurance authorities and markets, such as Lloyd’s of London, have implemented extensions to existing policies due to disruptions caused by COVID-19.
