Time for a relook at insurance cover for corporates, decision-makers

Insurance coverIt is important to ensure that your insurer is around when a claim comes your way.

The Tort age is upon us! This is not a litigious society, "Courts are slow and costs are low" does still rhyme, but does not factually hold true anymore. What tort? And tortfeasors, having a field day, is well on its way to become history in India. It's the major tectonic shifts which have only begun to cause early jolts. There is lot more to come.

What's driving this change? How much of it is internally driven, extraneous, or external to the country? At each level of the change, what are the remedies, recourse and possible risk transfer mechanisms, if any? What can insurers do and the challenges faced by them?

Internal, extraneous & external

We live in times of high inflation, average life span has been going up, per capita income is on the rise, lifestyles are evolving, the middle class keeps growing, and so is urbanisation. Media activism, together with the amazing power of social media, which is in turn backed by the genie of unleashed RTI, consumerism, literacy and Anna movement, make this unfolding drama extremely potent.

The new Companies Bill gives this a further boost as well as the power of class action finally in the hands of our denizens. We saw how Satyam Computers' overseas retail shareholders could enforce their grievance and Indian nationals could not. It could repeat in Coal India Limited but might turn out to be very different for the National Spot Exchange Limited (NSEL).

With the recent award for medical malpractice, Calcutta High Court has awarded with interest an equivalent to almost Rs 11 crore against the hospital and treating doctors. While the deceased was a Non-Resident Indian (NRI), it does not require many of the rich Indians to be an NRI to qualify for even bigger awards.

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