On October 12, 2006,the Delhi-based private sector general insurer, IFFCO-TOKIO General Insurance Company Limited (ITGI), announced the launch of a unique policy specifically designed for the Information Technology (IT)/IT Enabled Services (ITES) sector in India. The policy entitled `Errors and Omissions (Technology) Liability Policy' was aimed at safeguarding the interests of the software and Business Process Outsourcing (BPO) firms in India. With the launch of this innovative policy, ITGI became the first non-life insurance company in India to offer such a policy that would cater to the IT/ITES providers, especially the consultants, vendors and Small and Medium Enterprises (SMEs). The IT/ITES companies in India faced a whole lot of risks pertaining to explicit breach of contract cover, infringement of intellectual property cover, breach of confidence, defamation cover, failure of standard package software, besides payment for outstanding fees.ITGI launched this policy in collaboration with the London-based Hiscox Plc.and Tokio Marine Global, one of the subsidiaries of Tokio Marine Asia Private Limited.Moreover, the associates would even provide reinsurancefacility to ITGI pertaining to the product. It now remains a moot point whether the Indo-Japaneseinsurance company would be able to penetrate into the unexplored areas of the country's sunrise sector. It also remains to be seen whether the policy would prove to be a successful innovative strategy for ITGI in achieving its desired objectives.
The history of general insurance dates back to the `Industrial Revolution' in the West and the consequent growth of seafaring trade and commerce in the 17th century.It came to India as a legacy of British occupation.The British and other foreign insurance companies transacted their business in India through their respective agencies. The general insurance business commenced in India with the establishment of the Triton Insurance Company Limited, the first general insurance company established by the British in 1850 in Calcutta.The year 1907 saw the formation of the first Indian General Insurance Company named Indian Mercantile Insurance Limited that transacted all types of general insurance business in India.The most significant piece of legislation that came into effect was the introduction of the General Insurance Business (Nationalization) Act (GIBNA), 1972 that nationalized the entire general insurance business in India with effect from January 1, 1973.This was followed by a process of mergers and amalgamations among the Indian insurance companies that led to the rise of four fully-owned subsidiaries of GIC, viz., the National Insurance Company Limited, the Oriental Insurance Company Limited, the New India Assurance Company Limited and the United India Insurance Company Limited with head offices at Calcutta, New Delhi, Bombay and Madras respectively. Prior to 1973, the general insurance business in India was mostly urban-centric that catered mainly to the needs of organized trade and industries, without emphasizing the needs of individual citizens.
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