The specific insurance requirements for sourcing from India will vary depending on the type of goods or services being sourced, the value of the transaction, and the specific risks involved. However, there are some general insurance requirements that all companies sourcing from India should be aware of.
General Insurance Requirements
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Product Liability Insurance: This insurance protects the company from claims arising from bodily injury or property damage caused by its products. The minimum required coverage is INR 100 crore (approximately USD 12.2 million).
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Public Liability Insurance: This insurance protects the company from claims arising from bodily injury or property damage caused by its operations. The minimum required coverage is INR 100 crore (approximately USD 12.2 million).
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Workers’ Compensation Insurance: This insurance provides benefits to employees who are injured or become ill as a result of their work. The coverage is mandatory for all employers in India.
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Marine Cargo Insurance: This insurance protects the goods being sourced from India from loss or damage during transit. The minimum required coverage is 110% of the estimated cost plus freight (CIF) value of the goods.
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Credit Insurance: This insurance protects the company from losses arising from non-payment by customers. Coverage is not mandatory, but it is recommended for companies that are selling to customers in India.
Additional Insurance Requirements
In addition to the general insurance requirements, there may be additional insurance requirements depending on the specific industry or sector. For example, companies sourcing pharmaceutical products from India may be required to have product liability insurance with a higher coverage limit.
Compliance with Insurance Regulations
Companies sourcing from India must ensure that their insurance policies comply with all applicable Indian insurance regulations. These regulations are administered by the Insurance Regulatory and Development Authority of India (IRDAI).
Working with an Insurance Broker
It is advisable to work with an experienced insurance broker who is familiar with the Indian insurance market. The broker can help you to identify the appropriate insurance coverage for your needs, obtain competitive quotes, and ensure that your insurance policies comply with all applicable regulations.
Insuring Your Supply Chain
In addition to insuring your own operations, you should also consider insuring your supply chain. This can help to protect you from losses arising from disruptions to your supply chain, such as natural disasters or supplier failures.
By understanding the insurance requirements for sourcing from India, you can help to protect your business from potential losses.
