Unravelling Electronic Equipment Coverage In Bharat Sookshma Udyam Suraksha Shopkeepers Package Policy

The Bharat Sookshma Udyam Suraksha Shopkeepers Package Policy is an insurance product aimed at MSMEs or Micro, Small and Medium-sized Enterprises. These are up-and-coming commercial institutions that have a market capital within a certain limit. Only those enterprises whose market cap is within the limit prescribed in the policy can opt for it. The Bharat Sookshma Udyam Suraksha Shopkeepers Package policy aims to provide comprehensive coverage to MSMEs and to help them ensure their premises and other important aspects are financially secured. In case of an insured event causing damage to these aspects, the insurer pays a pre-fixed compensation.* Claims are subject to terms and conditions set forth under commercial insurance policy. One such aspect covered under it is electronic equipment coverage, which we shall look into in this article.

Understanding Electronic Equipment Coverage 

Under this coverage for the plan, the insurer will provide indemnity to the insured for the following:*

1. Repair or replacement costs incurred by the insured due to the accidental loss of or damage to electronic equipment. However, the insurer’s liability for any single item of electronic equipment within a policy period will not exceed the sub-limit of the sum insured specified for that item in the policy schedule, either individually or in aggregate.
2. Repair or replacement costs incurred by the insured for the accidental loss of or damage to external data media, including the expenses associated with restoring information and data stored therein. However, the following shall be kept in mind as well:
3. The insurer’s maximum liability for any single item of external data media within a policy period is capped at the cost of replacing the damaged external data media with new items of the same variety and quality.
4. The insurer’s maximum liability for restoring information and data stored in the external data media is limited to the cost of restoring any lost information and data from a backup system.
5. The insurer is not liable to make payments for the restoration of information and data stored in the external data media unless such restoration can be achieved from a backup system for the lost data and info.

Claims are subject to terms and conditions set forth under commercial insurance policy. Thus, such an MSME insurance plan can assure an entrepreneur that the electronic equipment of their enterprises is financially backed up in case of unexpected events. Some conditions are applicable to the electronic equipment coverage of this plan. Let’s learn about them.

Special Conditions on Electronic Equipment Coverage

Given that the sum insured specified in the policy schedule for each item of electronic equipment shall be equal to the cost of replacement with new property of the same kind and capacity, and concerning external data media, the loss settlement shall be as follows:

1. If an item can reasonably be repaired or reinstated at a cost less than the replacement cost, the insurer will indemnify the insured for the expenses necessary to restore the item to its pre-event state. No depreciation will be deducted here, except for parts with limited life.
2. In case of a total loss, the insurer shall indemnify the insured for the restoration or replacement costs up to the sub-limit of the sum insured amount specified in the policy schedule. Depreciation will be deducted from the replacement value in this case.

Additionally, the following is applicable too:

1. If, at the time of any insured event, the collectively assessed value of all electronic equipment exceeds the sum insured amount, the insured shall have to bear the proportionate loss for the difference. Each item, if multiple, is individually subject to this special condition.
2. If the insurer is of the opinion that restoring lost data or information is unnecessary, or if not done by the insured within a specified number of days of the accident causing the loss, the insurer’s liability is restricted to the cost of repairing or replacing the damaged external data media.

Special Exclusions of the Electronic Equipment Coverage

We list down some exclusions of the coverage within this general insurance plan:

1. Any fault or defect known or reasonably should have been known by the insured at the policy period's commencement
2. Loss or damage for which the manufacturer or supplier bears responsibility.
3. Loss or damage to items older than 10 years from the date of manufacture.
4. Loss or damage resulting from wear and tear, gradual deterioration, atmospheric or climatic conditions, rust, corrosion, moth, vermin, or insects.

Other exclusions can be found in the policy document. Along with the above, the electronic equipment coverage is also subject to general conditions and exclusions mentioned in the policy document, unless otherwise stated. With the support of a well-designed insurance plan like the Bharat Sookshma Udyam Suraksha Shopkeepers Package Policy, MSME entrepreneurs can have better peace of mind regarding their business. This can allow them to focus more on their business and help it reach newer standards.   * Standard T&C apply. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.