Additional cover refers to the extension of a standard insurance policy to protect the insured against specific additional risks or perils that are not included in the basic policy. These may include events such as riots, strikes, natural disasters, or even man-made calamities, depending on the type of insurance. To activate this extra protection, the policyholder is required to pay an additional premium.
š Why Additional Cover Matters
In the world of insuranceāespecially business and group health insuranceāstandard coverage doesnāt always meet every possible risk or requirement. Business owners often find themselves vulnerable to unforeseen incidents that standard plans donāt include. This is where additional cover becomes essential. It offers peace of mind by allowing customisation of insurance plans to better align with unique business or personal needs.
For instance, in fire insurance policies, the basic plan might cover damage due to fire or lightning. However, you can opt for additional covers to include floods, riots, explosions, or even malicious damageārisks that may otherwise result in a financial loss if not insured.
š Common Types of Additional Cover
Depending on the nature of the insurance product, here are some common types of additional cover:
1. Riot, Strike, and Malicious Damage (RSMD)
- Adds protection against damages caused by riots, labour unrest, or intentional acts of destruction.
2. Earthquake Cover
- Extends fire or property insurance to cover seismic events.
3. Terrorism Cover
- Offers protection against losses resulting from acts of terrorism. Common in group insurance or large commercial properties.
4. Personal Accident Cover (for Health Insurance)
- In group health or individual health policies, this additional cover provides compensation for accidental injuries or death.
5. Maternity Cover (for Group Health Insurance)
- Many employers choose this to support employees with maternity-related hospitalisation and pre/post-natal expenses.
6. Loss of Profit (for Business Insurance)
- Ensures income loss due to business interruption from insured events is compensated.
7. Home Contents Cover (for Fire or Home Insurance)
- Includes protection for household items, electronics, or valuables.
8. Critical Illness Add-on (for Health Insurance)
- Covers specific life-threatening illnesses such as cancer, heart attack, or kidney failure.
š” Key Benefits of Additional Cover
- Customisation: Tailor your insurance policy to fit exact needs.
- Comprehensive Protection: Bridge gaps in standard policies.
- Cost Efficiency: Pay only for whatās relevant to your context.
- Peace of Mind: Know youāre covered in exceptional circumstances.
š¢ Relevance for Businesses
For small and medium enterprises (SMEs), additional cover can play a vital role in risk management. Group health insurance with additional maternity or accident cover can help improve employee retention and morale. Business insurance with add-ons like natural disaster cover or cyber risk liability ensures that companies stay resilient even during unforeseen disruptions.
PlanCoverās insurance solutions enable businesses to compare plans and select suitable add-ons that best protect their team and operations, all while staying budget-conscious.
š Example Scenario
Letās say a manufacturing unit purchases a standard fire insurance policy to protect its warehouse. A few months later, civil unrest leads to a riot, damaging their inventory. If the company hadnāt opted for the RSMD additional cover, they wouldnāt be compensated for this loss. But with the cover in place, the damages are insured and claimed efficiently.
Similarly, in a group health insurance policy, an employer might opt for a maternity add-on to provide employees with better family care support, which would otherwise be excluded in standard policies.
š Important Considerations
- Premium Impact: Adding extra covers increases the premium. Balance coverage with affordability.
- Documentation: Insurers may require updated documentation or declarations.
- Exclusions Still Apply: Even with additional cover, certain exclusions may remain. Always review the fine print.
- Review Regularly: Business needs evolve. Periodically reassess which add-ons make sense.
š Summary
| Feature | Description |
|---|---|
| Term | Additional Cover |
| Primary Use | To enhance standard insurance policies with added protections |
| Requires Extra Premium? | Yes |
| Applicable to | Health, fire, marine, business, personal & group insurance |
| Common Add-ons | RSMD, terrorism, earthquake, maternity, critical illness etc. |
| Best For | SMEs, corporates, individuals seeking tailored protection |
PlanCover works closely with top insurance providers in India to offer additional cover options across various plans. Whether you’re a startup looking to safeguard your team or a large enterprise in need of customised risk solutions, our expert brokers and tech-enabled platform ensure that you get the right mix of protection without unnecessary overheads.
