Misc Claims > Money Insurance Policies

This is a modified version of burglary insurance and mainly covers money in transit between the insured’s premises and bank or post office, or other specified places, or between the insured’s main premises and branch premises. The customary money policy covers money in transit (Section-I) and money in transit (Section-II).

The following cases are excluded from the policy:

• Shortage due to error or omission.
• Loss of cash entrusted to any person other than the insured or an employee of the insured.
• Losses due to the fraud/ dishonesty of an employee of the insured
• Losses occurring by the use of keys to the safe unless such keys were obtained by force or threat.
• Theft of cash from unattended vehicle

Case Study-I

There is a garment manufacturing unit in Okhla. They are hiring labours/ workers on contract basis from various contractors. The payments to the labours were paid to the contractors directly and the distribution was done by them only. The garment manufacturer taken a insurance policy for money in transit from bank to their premises.

The insured had issued a cheque to the contractors name for Rs.15 Lacs and the cheque was cleared to their account in the same bank and contractor withdrawn the money and during the transit from Bank to the insured’s premises (for distribution of payments to workers), the cash was looted. Since the cheque is cleared to the contractors account and they withdrawn the money from their account, there is no liability on underwriters, since the looted cash was owned by the contractor only.

Case Study –II

This is a case of contractor who supplying labours to various major companies in Gurgaon and Manesar Area and they have taken a Money insurance covering the transactions to various places where their labours supplied. On 09.01.12, the contractor withdrawn Rs.8.0 Lacs from bank (according to him he already having Rs.14. Lacs with him) and total cash of Rs.22.0 Lacs kept in a bag and started to manesar for distribution of wages at various factories. One of his friend, the driver was also along with him. On the way, he stopped the vehicle in the road side and stepped down along with his friend and went to nearby hospital to meet their friend (the doctor). Before leaving the vehicle, he instructed the driver to take care of the cash bag which kept in the back seat and the driver was sitting in the case. After they left the car, on 14-15 year old boy approached the car driver and told him that the rear type of the vehicle was punctured. The driver stepped down the car and started changing the car and when the contractor along with his friend came, the cash bag was found missing. Subsequently the Police had arrested one of the culprit and recovered Rs.10.5 Lacs from them and one of the culprit was absconding along with the balance money. The arrested culprit confessed that they following the contractor from the bank in a car (and they punctured the tyre near the bank itself) and when they stopped the car to meet their friend one of the gangmember approached the insured’s driver and informed the driver about the punctured tyre, when the driver stepped down and went to opposite side for checking, the boy took the bag and fled in the car followed by the vehicle of the insured. In this, the cash was from the unattended vehicle and the same is excluded under the policy.

Case Study-III

M/s. SIS India Ltd. is providing the cash collection service to Union Bank of India. As per the agreement the insured had to collect the daily collection from DMRC’s various stations and deposit the same at Union Bank of India.

As per the prescribed system, the following is the procedure of the cash collection:

• All the custodian reports at Jhandewalan at 930 hrs and move to the stations as per described route chart made y the area officer/ Asst.mgr.
• They collect the scratch coupon and bags for collection of cash from various stations.
• After visiting the station, station controller & SIS custodian exchange the scratch coupon and tally/match their passwords.
• Station controller fills a bank slip with a carbon copy (for service provider) mentioning all denomination, account number and name.
• After collecting all cash from the station controller, SIS custodian seals the bag showing the seal number in the presence of station controller.
• SIS custodian mentioned the seal number and denomination with total amount on the back side of the scratch coupon exchanged by station controller and signed, which is attached on the bag along with bank deposit slip.
• They collected the cash from various stations and come back at the location (Kashmere Gate or Chandni Chowk or Jhandewala- which keep on changing due to security reason), where a secured pvehicle along with the armed guard stands for collection from the custodians.
• Secured vehicle moves to the bank at Khari Baoli once all the custodian reports to the vehicle with cash.
• Entire cash (station wise) is handed over to the bank with proper documentation.

The Insured had taken a Special Contingency Policy (covering money transit from various metro stations to bank).

On 30.05.11, at around 10.0am the insured had deputed two of their employees for collecting the cash from various DMRC stations on behalf of Union bank of India. They collected cash worth Rs.80,53,706/- from 20 DMRC stations as routine.

But after collecting the cash, they could not returned to the cash collection van standing at Jhandewalan Metro Station as routine and ran away with the cash collected.

After a lot of efforts, the Police could arrested one of the culprits namely Mr. Sanjay Sharma and recovered stolen cash of Rs.41,86,762/- and the other culprit was absconding with the balance amount.

On verification of the exclusion of the policy, the infidelity of insured’s employee is clearly excluded from the policy and we reputed the claim.