Federation Chamber of Industries Kashmir Sunday called for introduction of a special indemnity product—Business Interruption Insurance— in Kashmir to cover the losses the local enterprises suffer during untoward situations in Kashmir.
The demand has come at the time when the local business community and industrialists are witnessing worst slump due to closure of commercial activities for about five months in the ongoing unrest in Kashmir.
President, Federation Chamber of Industries Kashmir, FCIK, Er Mukhtar Yusuf, said the insurance product, once introduced, would relieve the industrialists from the anxiety and they won't have to beg before the government for compensation.
"The FCIK will press for introduction of 'Business Interruption Insurance' by the insurance companies operating in the state," he said.
He said such insurance should cover the business losses incurred by enterprises during the closure of their business due to "curfews, restrictions, public unrest, plant breakdown or any other such eventuality."
Yousuf said it was unfortunate that the business community was made to beg before the government and the banks for "grant of relief and rehabilitation every time there is such untoward in Kashmir."
He said the entrepreneurs, who are the job providers in the state, "feel disgraced when they are compelled to implore for compensation before the government."
"Why shouldn't the business chambers, banks and insurance companies join hands and devise a much-needed insurance product aimed to protect the entrepreneurs.
"The proposed insurance product should recompense the expenses and average profit to the entrepreneurs/traders for the period their business remains affected due to unrest," he said, claiming that such products "are available in many countries."
The FCIK urged the state government and SLBC to facilitate the introduction of this product. "Once we have such an insurance cover, it would safeguard the investment of existing entrepreneurs and build confidence among prospective entrepreneurs."
He said the demand for "business interruption insurance scheme" had come up for discussion during a meeting of the administrative council of FCIK with its senior members.
The meeting assessed the losses incurred by the industrial enterprises during past 5 months of unrest.
The members at the meeting observed that the unit holders have accumulated huge liabilities on account of interest on their loans, electricity fee, idle wages and salaries to the staff, contribution towards provident fund, ESI, etc., he said.
"The restructuring of loans aimed at deferment of interest to a later date cannot solve the problem of the entrepreneurs as major part of their working capital facilities has gone towards feeding their employees and other necessary expenditures during the turmoil.
"As such it is imperative for the banks and government to share the interest and not burden the enterprises on this account."
He said, once introduced the insurance product would also prove beneficial for the insurance companies as it would invoke tremendous response from the business community in Kashmir.