General Insurance

3. General Insurance

General Insurance covers every kind of risk OTHER than the risk to human life — chiefly risks to property, goods in transit, vehicles, health, and legal liability. Unlike life insurance, general insurance is genuinely a contract of indemnity: the amount payable on a claim is measured strictly by the actual financial loss suffered, and can never exceed either that loss or the sum insured, whichever is lower.

Main types of general insurance:

1. Fire Insurance — indemnifies the insured against loss of or damage to property (buildings, machinery, stock) caused by fire, and, depending on the policy, certain allied perils such as lightning or explosion. The insurer's liability is strictly limited to the actual value of the property destroyed or damaged, and never exceeds the policy's sum insured, in keeping with the indemnity principle.
2. Marine Insurance — covers risks connected with sea (and, by extension, inland waterway) transport of goods, and is itself commonly split into three covers: Hull insurance (the ship/vessel itself), Cargo insurance (the goods being carried), and Freight insurance (the shipowner's freight earnings, which are lost if the cargo fails to reach its destination). Marine insurance is one of the oldest forms of insurance, reflecting how central seaborne trade has historically been to commerce.
3. Motor Vehicle Insurance — covers loss or damage to a motor vehicle from accident, fire or theft, and, critically, third-party liability (injury or damage caused BY the insured vehicle TO another person or their property). In India, third-party motor insurance is compulsory by law for every vehicle used on a public road, while own-damage cover on the vehicle itself remains optional (though commonly taken together as a "comprehensive" policy).
4. Health/Medical (Mediclaim) Insurance — indemnifies the insured against hospitalisation and medical treatment expenses arising from illness or accidental injury, up to the policy's sum insured, either by reimbursing the insured's own payment or, under a cashless arrangement, by the insurer settling the hospital directly.
5. Personal Accident Insurance — pays a stated benefit on the insured's accidental death, or a proportion of it for permanent or temporary disability caused by an accident; unlike health insurance, it is not tied to hospitalisation expenses specifically.
6. Liability Insurance — covers the insured's legal liability to compensate a THIRD PARTY for injury or damage the insured has caused them, commonly seen as public liability cover (for a business whose activities or premises might harm the public) or professional indemnity cover (for a professional's liability for an error made in their professional work). …