Mr. Agrawal has a trading business wherein he deals with cash mainly. Most of his business is carried out in cash and he would transfer the cash to a nearby bank for deposit on a daily basis. One day when he was taking the cash to the bank in a secured vehicle, he was attacked by burglars who forced their way and took the cash after threatening to kill Mr. Agarwal and his associates. Shocked by the sudden event, Agarwal filed a complaint with the police as well as his insurance company. He was notified that his insurance policy covers only the structure of the building and not the cash in transit from one point to another. It was then he understood that there would be a separate insurance policy that covers the cash in transit. 

In another case, Mr. Lal, who owns a jewelry store, has a safe and a strong room to deposit the cash and then transfer it to the bank the next day. One day after closing the shop, there was a burglary attempt which resulted in loss of cash from the safe and the strongroom. Mr. Lal filed a complaint with the police but the chances of recovering the looted cash, if any, are minimal and there is no guarantee that the entire cash would be recovered. Moreover, the cash would be deposited in the court and the court would decide on giving back the cash based on the merits of the case which could take its own sweet time. 

Cash insurance, commonly referred to as Money insurance, is an insurance policy that covers the losses or damages to the cash in transit from one insured point to another insured point. Moreover, cash insurance also covers the events such as burglary, theft, and other unforeseen events related to transfer of cash. Money insurance could come handy immediately as the insurance company would settle the amount in case of burglary. 

Money Insurance Coverage:

• Loss of Money or cash in transit from one location to another due to burglary, theft and robbery etc. 
• Loss of money stored in a safe or strongroom in the insured premises due to a burglary, theft, or robbery kind of occurrence. 
• Loss of cash or money from the cash counter or till due to a burglary, theft, or robbery kind of occurrence. 
• Loss of cash or money from the premises of the insured location due to an accident or any misfortunate event. 
• Loss of money or cash due to fraud or dishonesty of the employee or any other authorized person of the employee carrying the cash and such things are discovered by the employer within the stipulated time mentioned in the policy. 
• Loss of personal money or any kind of damage to the clothing of the employee or any other authorized representative of the employee whilst carrying cash as a result of robbery or hold up or a threat given to them in the course of their duties. 

Cash Insurance Exclusions:

• Shortage or loss or cash due to errors, omissions or any other unexplained and mysterious losses. 
• Loss of money when it was entrusted to any person other than that of the insured, authorized employee or any representative of the insured. 
• Consequential loss of cash or money, such as the loss of profit, loss incurred due to business interruption, legal liability and loss or market share etc. 
• Loss of cash or money from the insured premises after the business hours unless and until the money is in a safe locker or strong room. In simple words, if the money or cash is not in a safe or strong room after the office hours, then it would not be covered under money insurance policy. 
• Loss of money from any other premises that is not mentioned and insured under the policy. 
• Loss of money or cash from an unattended vehicle. For example, if you leave your cash unattended in the vehicle and go for lunch or any other work, then it would not be covered under the policy.
• Loss of money due to strike, riot and malicious damage and terrorism unless it is covered as an add on in the policy. 
• Loss of money carried under the contract of affreightment. 
• Loss of cash resulting directly or indirectly from war and war like situation, invasion, act of foreign enemy, hostilities, civil war, rebellion, revolution, insurrection, military or usurped power etc. 
• Loss of money due to legal confiscation by the legal authorities. 
• Loss or damage to a third person or third party property. 
• Loss or damage caused by wear and tear and depreciation.
• Soiled, torn or damaged money. 
• Loss of money in transit by post or courier services unless it is specified in the schedule of the policy. 
• Loss or damage to the cash or any other covered items due to natural calamities such as cyclone, storm, earthquake etc. 

Cash Insurance Policy Add-ons: 

1. Loss of money due to strike and riot: This add on covers the loss of money or cash due to a riot, strike and malicious damage. Cash loss in insurance due to riot or strike resulting in visible physical damage by external violent means.  

2. Loss of money due to terrorism activities: This add on covers the loss of money or cash due to terrorism and terrorist related activities. The definition of terrorism should be as per the definition mentioned under Unlawful activities (prevention) act, 1967 or any other applicable acts at state and national level. 

3. Infidelity of cash carrying employees: The other important add-on that comes handy is that of the infidelity of the cash carrying employees. If a cash carrying employee has committed infidelity by taking the money then the infidelity if discovered beyond 48 hours then it would be covered under this add on subject to the condition that a written intimation should be given by the insured to the company and the insurer should accept the same. Moreover, the acceptance or rejection would be at the sole discretion of the underwriter. 

4. Occasional increase in single carrying limit: The basic concept of money insurance policy or cash loss in insurance is that there is a single carrying limit as well as the yearly carrying limit. The single carrying limit refers to the amount of cash one would carry in a single transit. For example, if on any day, the maximum amount you carry in a single transit is Rs. 5 Lakhs, then this amount should be the single carrying limit under the policy. But it happens sometimes that the single carrying limit could exceed the amount specified under the policy and in such cases if any incident happens resulting in loss of cash, then the same would not be covered under the basic policy. To cover any such occasional increase in the single carrying limit, one should take this add on. 

5. Foreign currency cover: This add on covers the loss of cash that is valued in foreign currency. For instance, most of the Indian business is done in Rupees, but there could be business such as money exchange firms that trade in foreign currency as well. The foreign currency would also be in transit to be deposited in a nearby bank for which the insurance cover is needed. Under this add on loss of cash including the foreign currency is covered up to the specified limit. 

6. Assault of employees carrying the money: This add-on covers the bodily injury or death of the cash carrying employees resulting from an assault on them during the attempted robbery, burglary or theft. The add on shall pay such employees who had been assaulted during burglary or hold up resulting in death, bodily injury or physical deformity and thereby preventing them from being able to discharge their regular duties. 

7. Waiver of key: There could be instances where the money is taken from the safe or a strong room using the key with or without the knowledge of the insured. In all such cases, the cash loss in insurance policy compensates the insured for their losses under this add-on. 

Special Conditions in Money Insurance:

1. Premium Adjustment: Money insurance or cash value insurance works on a per transit basis. That is the amount of money or cash that would be in a single transit would be taken into account in addition to the total transit amount in a given year to arrive at the premium. The overall sum insured in the policy would also depend on the number of single transits and the sum insured under them. It could happen that the sum insured got exhausted before the expiry of the policy period. This could be due to more single transits than those estimated to happen at the time of taking the policy. In such cases, you can opt for the adjustment of premium option where the sum insured would be adjusted upwards or downwards based on your requirements and then the extra premium would be charged or refunded to you.

For example, let us assume that you have taken a money insurance policy for Rs.5 Lakhs overall sum insured and a single transit limit as Rs. 1 Lakh. So, after 5 single transits your overall sum insured would get exhausted under the policy and if there’s a further requirement under the policy, you should then pay additional premium to top-up the sum insured. For this to happen, you should be sharing the transit details with the insurance company on a regular basis. In this case, since the ascertained amount is less than the overall sum insured, you should pay the difference in premium amount for the insurance cover provided for the extra cash or money that was under transit. 

2. Maintenance of Books & Keys: This is an important condition under the cash insurance policy wherein you are required to maintain the daily details of the cash in the safe or strong room in addition to the details of the key to the safe and strong room. In simple words, the keys of the safe or the strong room should be left unattended and should always be in the safe custody of the insured or their employees or any authorized person. If the keys are to be kept in the premises, then they should be kept in a secure place and not in the vicinity of the safe or strong room that contains the money. 

3. Onus of Proof: The onus of proof would be on the insured customer. If any of the events mentioned above happen which results in action, suit or any other proceedings, then the onus of proof would lie with the policyholder. Basically, the insured should prove that the incident is covered under the policy and should be settled by the insurance company. 

4. Duty of Disclosure: In the event of non disclosure of material facts, or misrepresentation of facts the policy would be void and all premiums paid would be forfeited by the insurance company. 

5. Reasonable Care: The basic condition that exists in any insurance policy is that the insured should take all possible and reasonable measures to safeguard the property against any accident, damage or loss. Insured policyholders should act as the insurer and take care of the belongings to reduce the impact in case of an event. 

Benefits of Money Insurance:

1. Separate cover for money and monetary transactions: The major advantage of taking money insurance is that you could decide on the terms and conditions of the policy in addition to the customization facility available when taken as a standalone policy. Cash insurance cover is also available as an addon in Shop insurance and other insurance plans, but it doesn’t have the possibility for customization as per your needs and requirements. For example, money insurance cover in a shop insurance would have few options and may not come with all addons to choose with, whereas when taken as a standalone policy, you stand to get the option of taking the add-ons. 

2. Premium based on cash transaction only: The other advantage in money insurance is that the premium would be decided based on the cash transactions that happen during the policy period. For example, if you have a higher or lower cash transaction than that was declared in the policy, you could very well go for an endorsement under the policy. If you have over utilized the policy, you need to pay an additional premium. On the other hand, if you have under utilized the policy, you would get a pro-rata refund under the policy. 

3. Adjustment of premium at year end: The other great advantage of cash value insurance is that the premium could be adjusted at the end of the policy year. Under this policy, the insured is expected to share regular updates regarding the transits made under the policy. If the sum insured is over utilized or underutilized, the insurance company would carry out an endorsement for the same and you may either need to pay an extra premium or get a refund. 

4. Cash in counter: Cash in counter should also be protected and this is covered under the money insurance policy. All the cash that is in the counter during the office hours would be covered under the policy. Basically, money insurance or cash back insurance covers the loss of money during transit as well as when it is in the premises in a safe or in the cash counter. Here, it is important to note that the cash in counter would be covered only during the office hours and after the office hours, the cash should be moved to a safe location such as a safe or strong room. 

Factors to Consider Before Taking Money Insurance policy:

1. Sum Insured: The most important thing to keep in mind before taking a money insurance policy is to decide on the sum insured. Sum insured should be decided based on 3 things:- 

• Maximum liability in case of loss due to an event. This is also known as the single carrying limit. The sum insured should be decided based on the single carrying limit, that is the maximum amount of cash that would be transported in a single transit. The single carrying limit could be given as an approximate amount which would be adjusted at the end of the policy period. 
• The maximum amount of cash that would be in transit during a given year or during the policy period. This amount also should be given on an approximate basis and adjusted at the end of the policy period. 
• The third thing is the actual amount of cash that was in transit. For this the insured is expected to submit regular updates on the cash that was in transit and accordingly the sum insured would be adjusted in the policy which may result in adjustment of premium as well. 

2. Add-ons: The other important thing to consider before taking a money insurance policy is the add-ons required under the policy. Add-ons or riders provide extra coverage under the money back cash insurance policy and come after paying an additional premium. Cash insurance in banks would also be covered in a money insurance policy. Add-ons that cover riot, strike and malicious damage, occasional increase in single carrying limit should be explored as they expand the scope of the policy. Add-ons should be selected very carefully as there is an extra premium involved in add-on selection. It is not advisable to choose all the add-ons available as it would increase the premium drastically but doesn’t provide much value addition. It is for this reason you should talk to an expert to analyze your risk and then select the required add-ons. 

3. Secured vehicle: The most basic and important thing to adhere to before taking a cash insurance policy is to make sure that the cash transit happens in a secured vehicle. In addition if the amount in cash transit is high, then the transit should be accompanied by an armed guard who could either be the security of the business or on hire for this purpose. It is important that the transit happens only in a secured vehicle so that the conditions of the policy are met. Moreover, one should make sure that the cash carrying vehicle should not be abandoned at any point of time by the driver or the owner of the business or the employees or any other authorized representative. 

4. Intermediary: The final and the utmost important thing to consider is the selection of an intermediary. An insurance intermediary is the one who acts as a bridge between the insurance company and the policyholder by providing the required services to the policyholder in return for a commission. Insurance agents such as individual agents, banks, brokers and web aggregators etc. The main thing to consider before selecting an insurance intermediary is the scope of the service they could provide. It is always advisable to opt for an intermediary who could provide multiple quotes and provide value added services etc. In addition, it is advisable to opt for an intermediary who could assess your risk based on your risk profile and then suggest the required add-ons in a money insurance policy. 

Who needs a Money Insurance policy?

Money insurance policy could be taken by anyone who deals with cash or money on a daily basis such as:- 

• Businesses which withdraw large amounts of money for their regular business operations. This could be due to the payment of amounts on a daily basis such as salary payment, wages etc. 
• Businesses that deal day in and out with cash flowing from customers. 
• Businesses that store cash, money or any other similar currency in a safe or strong room on the insured premises. 

Money Insurance Claim Process:

Step 1: The first important thing to do in a money insurance claim is to report the claim to the insurance company. Insured customers should also raise the claim by submitting the duly filled and signed claim settlement form. Once the claim is raised, a claim settlement number would be given to the insured for future references. In addition to the claim request, insured should carry out other formalities such as filing a police complaint and obtaining the First Information Report (FIR). Insured customer should also submit a right estimate of the loss. 

Step 2: Once the claim is raised, now the responsibility of enquiry shifts to the insurance company. Insurance companies would carry out an enquiry from their end and decide the authenticity of the claim. Similarly, the police would carry out their investigation and decide on the cause of the incident and then report it in their reports. 

Step 3: The final step is the claim settlement. Once all the required documents are submitted to the insurance company and if it’s found that the claim was authentic, then the insurance company would settle the claim. Here are the list of documents that are to be submitted to the insurance company for claim settlement:- 

• Claim intimation report 
• Duly filled and signed claim form 
• First information report (FIR) 
• Final investigation report from the Police
• Documents supporting the amount of loss
• Documents that could provide the extent of the loss such as daily records of the cash etc. 
• Daily recording statement of the amount of cash that was in transit or stored in a safe or strong room. 

Money Insurance FAQs:

1. Does money insurance cover only currency? 

Money insurance is designed to cover currency in addition to bank drafts, foreign currency (available as an add-on), chèques, postal orders, money orders and many more.  

2. Does cash insurance cover the loss of the cash and other currency due to natural calamities? 

No. Money insurance does not cover the loss of cash and other currency due to natural calamities such as flood, cyclone, storm and tempest. This cover would come out of the scope of the policy.  

3. What happens if the employee’s infidelity is not reported within 48 hours?

It is assumed that the insured doesn’t require more than 48 hours to understand that their employee has committed infidelity with their cash. Normally if the claim is reported after 48 hours it would not be considered unless the add-on is taken under the policy and included in the schedule. 

4. Is money insurance mandatory as per the law? 

No. Money insurance is not mandatory in India. But it is advisable to take a money insurance policy, especially those companies that deal in cash on a daily basis. 

5. How much money insurance do I need? 

The amount of money insurance required can be decided based on two factors:- 

• Single carrying limit which is the maximum amount of money that would be in transit at any given point in time. This should be decided based on the maximum amount that would be in transit. 
• Overall sum insured is the amount that includes the sum insured for all the transits that are made during the policy period. It is not necessary to give an exact number, but an approximate estimate would suffice. The sum insured can be adjusted during the policy period or at the end of the policy.