The insurer had rejected the claim, saying the alleged burglar was a security guard deputed by the agency and the policy exclusion applied. The commission rejected this, holding that the guard had overpowered another guard, snatched the keys and committed the burglary. The state commission upheld the direction to settle the trader’s Rs 2,04,290 claim. It added that the hired person had overpowered security guard Nan Bahadur Singh and snatched the keys before committing the burglary.
Insurer rejected claim
The dispute dates back to March 21, 2018, when a burglary took place at the premises of M/s G K Traders in Ludhiana. The firm was engaged in manufacturing, marketing, selling, and exporting cycle parts, rickshaw parts, and other goods. Its insurance policy covered its stock in trade and goods in its custody from January 1 to December 31, 2018.
According to the trader’s complaint, persons entered the premises after overpowering security personnel and took away articles worth Rs 2.04 lakh. The incident was reported to the Police Control Room in Ludhiana and an FIR was registered on March 23, 2018.
The insurer was informed about the loss and appointed a surveyor and loss assessor. The surveyor inspected the premises and, in a report dated August 8, 2018, assessed the loss at Rs 2.04 lakh. However, the insurer relied on the policy terms and subsequently repudiated the claim through a letter dated September 27, 2018.
Story continues below this ad
The insurer argued that the policy contained an exclusion clause covering situations where a person lawfully present at the premises or connected with the insured’s business was involved in the theft or damage. It said the person involved had been deputed by the security agency as a substitute for the regular guard.
The insurer also questioned the delay of one day in registering the FIR and pointed out that the FIR did not mention the value and quantity of the stolen articles. It argued that there had been no forcible entry because the persons involved had obtained the keys after overpowering a guard.
Commission rejects exclusion clause argument
The state commission examined the policy and the circumstances of the burglary. It noted that the occurrence of the theft on March 21, 2018 was not disputed by the insurer. The dispute was whether the incident was covered by the policy and whether the exclusion clause could be invoked because the person involved had been deputed as a security guard.
The commission held that the policy covered burglary by forcible means. It rejected the insurer’s argument that the involvement of a person hired through the security agency meant the claim was excluded. The commission also rejected the objection regarding the one-day delay in filing the FIR, observing that the delay was not material in the circumstances because the police had been informed about the burglary and an FIR had been registered.
Story continues below this ad
The commission held that the insurer was not justified in invoking the exclusion clause and dismissed the appeal, upholding the direction to pay Rs 2.04 lakh as per the survey report and policy terms. The trader was also awarded Rs 10,000 compensation, with 8 per cent annual interest on the claim amount if unpaid within 30 days.
The commission further ordered that the Rs 1,08,800 deposited by the insurer in the appeal, along with accrued interest, be remitted to the trader 45 days from sending the certified order copies.
Takeaway
An insurer cannot automatically reject a burglary claim merely because the alleged burglar was hired through a security agency. The policy terms and circumstances of the incident must be considered.
For consumer-related grievances, individuals may contact the consumer helpline in their respective states and Union territories (Punjab: 0800–22577) or call the National Consumer Helpline at 1915 for assistance.
Story continues below this ad
Don’t miss out on these stories:
Electric scooter fails twice within 2 months of purchase, Kerala widow wins Rs 1.6 lakh
Car owner wins Rs 5.89 lakh after insurer rejects claim over driver’s ‘fake’ licence
Mumbai builder ordered to pay Rs 7.39 lakh for delivering 41.54 square feet less flat area
