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Non-Life (General) Insurance in Nepal and Its Varieties

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What Is Non-Life Or General Insurance?

Non-life insurance is a fixed-term contract between the insurance company and the person purchasing the . This type of agreement is also known as an insurance contract. In the event the covered property is lost or damaged within the time frame stated in the contract, the insurance company compensates the party involved.

Non-life insurance is a contract intended to protect against the risk of property damage and liabilities. After purchasing insurance, the insured company or individual is protected against losses or risks. If there is no loss or accident within the policy period, the insurance company is not to pay anything.

Non-Life Insurance is concerned with property and liability, but it also covers some aspects of human life. Accident insurance, for example, can be purchased either individually or collectively. In this case, the insurance contract is set up in accordance with a provision that differs from the nature of life insurance.

Types Of Non-Life (General) Insurance In Nepal

According to regulations 2049, the non-life insurance business is classified into several types:

  1. Fire protection insurance
  2. Automobile insurance
  3. Aviation Coverage
  4. Marine insurance
  5. Engineering and Contractor’s Liability Insurance
  6. Miscellaneous insurance

Fire insurance

In the context of insurance, the circumstance in which an accident occurred due to an accidental flame is referred to as fire, while the insurance to compensate for financial losses caused by such a risk is referred to as ‘fire insurance.’ In other terms, ‘fire insurance’ refers to the agreement formed between the insured and the insurance company for compensation in the event of fire damage.

There are two items that are absolutely necessary for fire insurance coverage.

– The fire had to be unintentional.
– The flames should have erupted.

According to insurance practise, a fire insurance contract may freely incorporate other risks such as earthquake, flood, and typhoon.

Motor Insurance

Motor insurance protects your vehicle against any loss or damage caused by an accident, as well as your legal duty to a third party for personal injury or property damage. It safeguards your life, your car, and the lives of others. This insurance covers a critical area of risk by covering damage to your own car, damage to another person’s vehicle, and injury or death of a or member of the public as a result of an accident.

Motor insurance covers a variety of vehicles, including commercial vehicles, private automobiles, motorcycles (two wheelers), and other vehicles.

In Nepal, there are two forms of motor insurance: comprehensive and third-party liability. Comprehensive Motor Insurance covers any loss or damage to the vehicle caused by an external accident, such as fire, external explosion, self-ignition, lightning, burglary, housebreaking, or theft, or any malicious act. Similarly, Third Party Insurance protects the third party in the event of an accident.

Aviation Insurance

The air transportation industry is not without risk. While operating the aeroplane, there is a risk of numerous sorts of damage and loss. As an example, consider a plane accident or a collision. The aircraft’s passengers, luggage, and crew members may also sustain damage. A plane accident, on the other hand, might cause harm to other people’s property and human life, and there is a need to pay compensation. Aviation insurance is insurance that is purchased to compensate for damage to the aircraft or harm caused by the aircraft.

Marine Insurance

Routes such as road, rail, air, and sea are used to transfer commodities from one location to another. There is a risk of damage to the commodities when shipping them via these various routes. The insurance that is used to safeguard against such risks is known as marine insurance. It protects against the loss or damage of ships, cargo, terminals, and any other mode of transportation used to transfer, acquire, or hold property between the places of origin and final destination. It includes all kinds of transportation, including marine transportation, inland waterways, land transportation by road/rail vehicle, and air transportation. The type of provisions linked to the policy determines the scope of coverage. These clauses can be divided into two categories:

  • Institute Cargo Clauses (I.C.C.)
  • Inland Clauses (I.T.C.)

Engineering And Contractor’s Risk Insurance

Engineering and contractor’s risk insurance covers loss or damage to covered property caused by risks encountered during engineering activities such as planning, designing, erection/construction, , commissioning, operation, and maintenance. In other words, this insurance is designed to cover unintentional loss or damage to civil engineering works, such as building erection, road or railway construction, irrigation, bridge construction, and other infrastructural designs, as well as third-party liability.

Miscellaneous insurance

Miscellaneous insurance encompasses any insurance that is not covered by the mentioned above. It protects against loss or damage caused by burglary and housebreaking, cash in transit, banker’s indemnity, group or family hospitalisation, international travellers’ medi-claim, health insurance, and so on.

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