Different Types of Insurance Products for Loan Security.

Insurance is a financial product that provides protection against losses resulting from unexpected events. It is a risk-management tool that provides financial compensation for losses caused by accidents, fire, illness, death, natural disasters, and other unexpected events. Insurance helps protect individuals and businesses from financial losses due to unforeseen circumstances. 
On the other hand, Loan security can be described as Whether someone need to borrow money to grow their business, acquire assets or meet large or everyday expenses, a lender/ bank will almost always ask for security before they advance a loan in order to minimise their risk and ensure lender/ bank can enforce the loan if you fail to pay.

1. Different Types of Insurance
Products for Loan Security.
Md. Mostahidur Rahman, CDCS

2. What do we understand about insurance & Loan security
uInsuranceisafinancialproductthatprovidesprotectionagainstlosses
resultingfromunexpectedevents.Itisarisk-managementtoolthat
providesfinancialcompensationforlossescausedbyaccidents,fire,
illness,death,naturaldisasters,andotherunexpectedevents.
Insurancehelpsprotectindividualsandbusinessesfromfinancial
lossesduetounforeseencircumstances.
uOntheotherhand,LoansecuritycanbedescribedasWhether
someoneneedtoborrowmoneytogrowtheirbusiness,acquireassets
ormeetlargeoreverydayexpenses,alender/bankwillalmostalways
askforsecuritybeforetheyadvancealoaninordertominimisetheir
riskandensurelender/bankcanenforcetheloanifyoufailtopay.

3. A brief history of Insurance
InsurancesectorinBangladeshemergedafterindependencewith2
nationalizedinsurancecompanies-1Life&1General;and1foreign
insurancecompany.Inmid80s,privatesectorinsurancecompanies
startedtoenterintheindustryanditgotexpanded.Nowdays,62
companiesareoperatingunderInsuranceAct2010.Outofthem-18
AreLifeInsuranceCompaniesIncluding1ForeignCompanyAnd1IsState-OwnedCompany,44GeneralInsuranceCompaniesIncluding1
State-OwnedCompany.TheInsuranceDevelopmentandRegulatory
Authority(IDRA)istheregulatorybodythatoverseestheinsurance
industryinBangladesh.
Source:https://www.bb.org.bd/en/index.php/financialactivity/insurance

4. Types of insurance companies and aggregators in Bangladesh
InBangladesh,therearebothinsurancecompaniesandinsuranceaggregatorsthat
providearangeofproductsandservicestoindividualsandbusinesses.Insurance
companiesofferavarietyofproducts,includinglife,health,motor,andtravel
insurance.
•Life insurance
•General Insurance
•Reinsurance
•Micro-insurance
•Takaful or Islamic insurance.

5. General InsuranceProducts
Within numerous types of General Insurancefollowing
Products is being commonly used for Loan Security.
uFire and Allied Peril Insurance
uMotor Insurance
uMarine Insurance

6. Fire and Allied Peril Insurance
All policies issued under the heading of Fire Insurance. It primarily aims at providing protection against
financial losses arising out of the operation of fire or certain other specified perils. The subject matter
of insurance is usually:
uBuilding
uPlant & Machinery
uFurniture, Fixture and fittings
uGoods and Merchandise
uStocks of all kinds
Direct risks covered under standard fire insurance policy:
Accidental fire, lightning & Explosion (Boilers or gas used for domestic purposes only). The perils
covered by the policy in its normal terms are:
uFire: Whether resulting from explosion or otherwise.
uLightning: Whether fire results or not.
uExplosion: Boiler used or gas used

7. Fire and Allied Peril Insurance (Continued)
In addition to the above, this Policy also generally covers the following forms of damage :-
uDamage during or immediately following a fire caused by Smoke, Scorching, Falling walls
and the like
uDamage caused by a fire brigade or other competent authority in discharge of their duty
including :
•Damage caused by water or other extinguishing agents employed.
•Damage caused by the blowing up of buildings to prevent the spread of a configuratio
uDamage to property while being removed from a building or immediately after its removal
from burning building caused by exposure to weather, provided the removal was justified.
Additional risks covered on payment of additional premium:
Riot and strike damage (RSD), Explosion damage (including commercial purpose), Malicious
damage., Earthquake, Cyclone, Flood.

8. Motor Insurance
(1) Private Car
(2) Commercial Vehicle
(3) Motor Cycle
Comprehensive Policy (What it Covers):
1.By fire, explosion, self-ignition or lighting.
2.By burglary, house-breaking or theft.
3.By riot & strike including malicious and terrorist activities.
4.By earthquake (fire and shock damage).
5.By flood, typhoon, hurricane, storm, inundation, cyclone, hailstorm, frost, tempest.
6.By accidental external means.
7.Whilst in transit by road, rail, inland waterway, lift, elevator or air.
8.Act liability insurance risks.

9. Marine Insurance
uMarine cargo insurance coverage is given to import of all goods
from abroad and inland transport by steamer/lorry/air.
uThe coverage includes different risks associated with the import of
goods from one port to another either by sea, air or by rail, road.
We also provide transit insurance cover for the carriage of goods
inside the country.
Hull Insurance:Under the hull insurance policy, the coverage is given
to comprehensive risks for the vessels and total loss of any package.
Vessels may be stranded, grounded, sunk or capsized and any
package may be lost overboard or dropped whilst loading on to, or
unloading from, vessel, we pay the amount equivalent to the
estimated loss.

10. Insurance in International Trade
A requirement in a credit for the presentation of an insurance
document, such as an insurance policy, insurance certificate or
declaration under an open cover, means that UCP 600 article 28 is to
be applied in the examination of that document.

11. Sample Insurance Policy

12. BANCASSURANCE
Bancassuranceisapartnershipbetweenbanksandinsurancecompanieswherebanksactsasacorporateagenttosellinsuranceproductsthroughitsdistributionchannelstoitscustomerbase.,Bancassurancebusinessholdsimmensepotentialforbanksasthereisahugeuntappedgrowthopportunityintheinsuranceindustry.EBLlikeotherbankisofferingawiderangeoffinancialproductsandone-stopsolutionforcustomer’sfinancialneeds,Bancassurancebusinesswouldcreatemorecross-sellingopportunitiesaswellasensureoptimumuseofexistingbusinesschannel.NowEasternBankPLCiscollaboratingwith
uGreen Delta Insurance
uMetLife Products
Source: https://www.ebl.com.bd/retail/ebl-bancassurance

13. Security is a Priority,Not an Option.
I am so grateful for your patience and willingness to help me, Thanks.