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Navigating the complex landscape of commercial insurance, especially under the Laghu Udyam Suraksha Commercial Package Policy, requires a fundamental understanding of key terminology. As a Laghu Udyam Suraksha Commercial Package policyholder, being well-versed in the terminology associated with general insurance is essential for making informed decisions and ensuring comprehensive coverage for your business.

This introduction will delve into the critical terms that every policyholder should be aware of, shedding light on the nuances of commercial insurance and empowering you to navigate the intricacies of your insurance policy with confidence. Claims are subject to terms and conditions set forth under the commercial insurance policy. *

Agreed Value:

The Agreed Value is a pivotal concept, representing the mutually determined amount between the insured party and the insurer at the policy’s commencement. This figure applies to items with indeterminable values.


“Building” encompasses structures where business operations occur, including basements, fixtures, and additional structures specified in the Policy Schedule. These structures range from network garages to security sheds and lift installations.


Defined as the commercial enterprise, trade, or profession declared in the Policy Schedule, “Business” forms the core of the insured activity.


An Endorsement is a written amendment by the insurer, introducing modifications, exclusions, or conditions that can alter the original policy’s terms or scope.

Insurable Assets:

Encompassing Buildings, Plant and Machinery, Furniture, Fixtures and Fittings, and more, “Insurable Assets” delineates the scope of coverage for owned, leased, or entrusted assets related to the insured business.

Insured Property:

Defined as the collectively declared and insured elements in the Policy, the “Insured Property” comprises buildings, machinery, furniture, stocks, and other contents located on the insured premises.

Kutcha Construction:

This term describes buildings with walls or roofs made from wooden planks, thatched leaves, bamboo, or plastic cloth, signalling a distinction in construction type for insurance considerations.

Market Value:

The Market Value is determined by subtracting depreciation from the new Replacement/Reinstatement Value on the date of loss, providing a realistic assessment of the asset’s worth.

Partial Loss:

Any loss, excluding destruction, is termed a “Partial Loss”, highlighting the nuanced nature of potential damages.


The “Premium” denotes the amount paid for insurance, including taxes and levies, as specified in the Policy Schedule.

Pucca Construction:

Unlike Kutcha Construction, Pucca Construction refers to more robust and permanent building materials, influencing insurance considerations.


This term signifies the restoration or replacement of lost or damaged property to a condition similar to its state when new, without improvement.

Reinstatement/Replacement Value:

The amount required to reinstate or replace the insured property without factoring in depreciation defines the Reinstatement/Replacement Value.

Sum Insured:

Representing the maximum liability for each cover, “Sum Insured” is explicitly stated in the Policy Schedule, acting as a pivotal parameter for assessing claims.

Total Loss:

The occurrence where an item or property is irretrievably destroyed, or repair costs surpass the Sum Insured defines a “Total Loss”, signalling a critical threshold in insurance claims.

In navigating the nuances of the Bharat Laghu Udyam Suraksha Policy, a comprehensive grasp of these terms is vital for effective policy interpretation and adherence.

*Standard T&C Apply

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.