Classification of General Insurance
Four ways to sort the same policy, and the one IC-11 asks about each time.
Every general insurance policy can be sorted several ways at once. A fire policy on a Surat textile godown is fire business under the Insurance Act, a commercial product under IRDAI's product rules, and property insurance in the market's everyday language. A two-wheeler policy in Bengaluru is miscellaneous business, a retail product, and a mix of property (own damage) and liability (third party).
IC-11 tests each way of sorting separately, so learn them as separate lenses rather than one list.
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Lens 1: The Statutory Classes
The Insurance Act 1938 defines general insurance business as fire, marine or miscellaneous business, carried on alone or together. Health is now defined as its own class.
Fire
What the Act covers
Loss by or incidental to fire, or other events customarily included in fire policies
Example
Fire and allied perils cover on a godown, a factory or a house
Marine
What the Act covers
Vessels, cargo, freight and goods in transit by land or water, including warehouse risks incidental to transit
Example
Machinery shipped CIF from Hamburg to Nhava Sheva; a fishing trawler's hull
Miscellaneous
What the Act covers
Any general business that is not principally fire, life or marine
Example
Motor, engineering, liability, burglary, fidelity guarantee, crop
Health
What the Act covers
Sickness benefits and medical expenses, and by definition personal accident and travel cover too
Example
Hospitalisation policy, personal accident policy, overseas travel policy
| Class | What the Act covers | Example |
|---|---|---|
| Fire | Loss by or incidental to fire, or other events customarily included in fire policies | Fire and allied perils cover on a godown, a factory or a house |
| Marine | Vessels, cargo, freight and goods in transit by land or water, including warehouse risks incidental to transit | Machinery shipped CIF from Hamburg to Nhava Sheva; a fishing trawler's hull |
| Miscellaneous | Any general business that is not principally fire, life or marine | Motor, engineering, liability, burglary, fidelity guarantee, crop |
| Health | Sickness benefits and medical expenses, and by definition personal accident and travel cover too | Hospitalisation policy, personal accident policy, overseas travel policy |
Lens 2: Retail vs Commercial
IRDAI's Insurance Products Regulations 2024 classify every general insurance product into one of two categories.
- Retail product
- Designed for individuals or households, and also for micro or small businesses. Examples: private car and two-wheeler policies, home insurance, a shopkeeper's package policy.
- Commercial product
- Designed for anyone other than individuals or households: factories, contractors, shipping lines, IT parks. A commercial product that is also sold in the retail segment must be set up as a separate retail product with its own UIN.
- Wholesale business
- The market's older name for commercial business, usually placed through brokers and priced risk by risk. The courseware uses retail and wholesale; IRDAI's regulations use retail and commercial.
Lens 3: What Is Being Protected
The courseware's more recent classification sorts covers by the subject of insurance.
- check_circleProperty: physical things against loss or damage. Fire, marine cargo and hull, motor own damage, engineering, burglary.
- check_circlePersons: people against accident or illness. Personal accident, health, travel.
- check_circleInterest: a financial interest rather than a physical object. Fidelity guarantee (loss through an employee's dishonesty) is the textbook case; credit insurance sits here too.
- check_circleLiability: legal liability to third parties. Motor third party, public liability, product liability, professional indemnity, employees' compensation.
Quick practice on risk inspection and hazards. No signup.
Lens 4: IRDAI's Line-of-Business Codes
Every general insurance product and add-on (other than health) carries a Unique Identification Number. Two letters in it name the line of business, under IRDAI's 2024 master circular.
| Code | Line of business |
|---|---|
| PR | Property |
| MR | Marine |
| MT | Motor |
| EN | Engineering |
| LB | Liability |
| AV | Aviation |
| CR | Crop |
| TC | Trade credit |
| SU | Surety |
| MS | Miscellaneous |
How IC-11 Tests This
Expect "the conventional classification under the Insurance Act has which three heads" (fire, marine, miscellaneous), "fidelity guarantee is an example of which class" (interest), and "wholesale refers to" (brokered business for corporates). The trap is motor: it is not a statutory class of its own but falls under miscellaneous. Another is personal accident, which the Act now places inside health insurance business. The US market phrase "property and casualty" uses casualty to mean third party and liability covers.
FAQs
What are the classes of general insurance in India?expand_more
The Insurance Act 1938 defines general insurance business as fire, marine or miscellaneous business. Health insurance, which includes personal accident and travel cover, is defined as a separate class.
Is motor insurance fire, marine or miscellaneous?expand_more
Miscellaneous. The Act's miscellaneous class covers any general business that is not principally fire, life or marine, which takes in motor, engineering, liability and most other lines.
What is the difference between retail and commercial general insurance?expand_more
Retail products are designed for individuals, households and micro or small businesses. Commercial products are for everyone else, such as factories and contractors. IRDAI's 2024 product regulations use this split.
What are property, persons, interest and liability insurance?expand_more
A way of grouping covers by what they protect: physical property, people (accident and health), financial interests (such as fidelity guarantee) and legal liability to others.
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