An office insurance policy plays a crucial role by offering you financial coverage against various losses or damages that can happen due to perils like fire, theft, burglary, earthquake, riot, etc. It comprises of fire insurance policy which secures against losses arise due to fire.

Read More: Importance of Fire Insurance Policy for Home, Office & Factory Owners

It is feasible to cancel your office insurance in the middle of the policy year if you are not satisfied with its terms and conditions. In case you want to cancel your office insurance cover in the middle of the year, you would have to send a written notice to the insurer at the registered address as mentioned in the policy document. The notice shall be deemed to be effective from the date of the dispatch of the notice by the policyholder.

You will be then entitled to get a refund of premium on a pro-rata basis for the unexpired tenure of the policy from the date of cancellation.

A policyholder having an office insurance policy can terminate the insurance at any time, in which case the insurer will retain the premium for the amount for which coverage has been in force. Usually, most of the office insurance companies refund the premium as per the following =

Tenure% of premium refund by the insurer
Up to 1 month75% of annual premium
Above one month and up to 3 months50% of annual premium
Above three months and up to 6 months25% of annual premium
Above six monthsNil

 

In case no consensus is made on the amount of the premium that will be refunded by the insurance company at the time of cancellation, the issue can be handled by an arbitrator who will be appointed by both the parties in difference.

Like office insurance policyholder, the insurance company can also cancel the office insurance policy by giving 15 days’ notice in which case the insurer would have to repay the premium on the proportionate basis.

However, no refund will be paid by the insurer if there has been a claim under the policy.

Case: 1

After having a successful stint in a corporate world, Rajiv Sharma established its own engineering company in Delhi. Along with taking care of various factors, Rajiv also purchased office insurance policy. The purpose of the insurance policy was to get financial coverage in case loss or damage happened due to perils like fire, theft, burglary, earthquake, etc.

However, in the fifth month, Rajiv decided to cancel the policy as he was getting a more comprehensive insurance cover from another insurer at lower premium rates. So, Rajiv decided to cancel his office insurance in the middle of the year and buy the insurance policy from the other insurer.

In this case, Rajiv had paid Rs 20,000/annually for office insurance coverage. Now, when he decided to cancel the policy in the middle of the year, he was entitled to get a refund of the premium for the unutilised tenure. In this case, the insurer retained 75% of the premium and refunded the remaining (i.e. 25%) to Rajiv. It means, as the annual office insurance premium was Rs 20,000, the insurer kept, Rs 15,000 and refunded Rs 5,000 to Rajiv for the unexpired tenure of the policy from the date of cancellation.

Read More: What to Do Under an Office Insurance If An Insured Person Meets With An Accident?

Case: 2

A few years ago, Meenal Jain established her software company in Pune. Along with group health insurance, she also purchased office insurance for her two-story office space. She was confident that the insurer would offer financial coverage to her in the case of any loss or damage due to fire.

Last year, the first floor of her office caught fire due to short-circuit. Luckily, there was no loss of life, however, equipment worth Rs 30 lakh completely burnt. The accident happened within two months of renewing office insurance policy.

Meenal approached her office insurance company who appointed a surveyor who investigated the loss and later submitted its report. On the basis of it, the insurer settled the claim.

As Meenal was not happy with the claim amount, she decided to cancel her office insurance policy. Meenal sent a notice of policy cancellation to the insurer within two months of its policy renewal. Though the insurer was ready to cancel the policy; it refused to refund the premium for the unutilised tenure as Meenal had already filed a claim.

[cta id=”984″ vid=”2″]