Types of General Insurance

How the lines are grouped

In law, general insurance business is classified as fire, marine and miscellaneous. In everyday use the market speaks of product lines instead. The ones met most often are motor, health, personal accident, travel, fire and property, marine, liability, engineering, aviation, crop, burglary and cyber.

One way to sort them is by what is at risk: property, legal liability to others, or a person's health and safety.

Covers for property and goods

A fire policy, such as the Standard Fire and Special Perils policy, covers property at a fixed location, for example goods stored in a factory, against fire and allied perils such as lightning, explosion, storm and flood. What is included depends on the product and the add-ons chosen, and that is true of earthquake as well. Theft is generally the business of a separate burglary policy.

Marine insurance follows goods on the move. Cargo cover protects goods in transit by sea, air, rail or road; the marine class also includes hull insurance on ships and vessels, and freight. Engineering insurance covers construction and engineering project risks through policies such as Contractor's All Risk (CAR), Erection All Risk (EAR), Contractor's Plant and Machinery (CPM) and Boiler and Pressure Plant insurance.

Covers for liability

Liability policies pay what the insured is legally bound to pay to someone else. Professional indemnity protects professionals such as doctors, lawyers, chartered accountants, architects and consultants against claims arising from negligence or errors in their professional services.

Workmen's compensation insurance, also called employees' compensation insurance, protects an employer against the legal liability to compensate employees for injury, disability or death arising out of and in the course of employment. That liability came from the Workmen's Compensation Act, 1923, renamed the Employees' Compensation Act in 2009, and is now carried into the Code on Social Security, 2020, in force since 21 November 2025.

Cyber insurance covers financial loss from cyber incidents: data breaches, ransomware attacks, business interruption caused by a cyber event (and system failure, where the policy extends to it) and crisis-management expenses. Regulatory fines and penalties are covered only where they are legally insurable and the wording provides for them.

Compulsory covers and who may sell

Motor third-party liability insurance, required by the Motor Vehicles Act, 1988, is the most widely applicable compulsory general insurance. A few others are compulsory in specific situations: under the Public Liability Insurance Act, 1991, owners handling notified hazardous substances must insure their liability under that Act.

A Point of Sales Person (POSP) is engaged by an insurer or an intermediary and is not licensed directly by IRDAI. A POSP may sell only the simple, pre-underwritten products IRDAI permits, such as motor, health, personal accident, travel and home covers. The permitted list is set by IRDAI and can change.

Rules at a glance

Key points

• The law classifies general insurance business as fire, marine and miscellaneous.
• Fire policies protect property at a location; marine policies protect goods in transit, ships and freight.
• Professional indemnity and employees' compensation covers pay what the insured legally owes to others.
• Motor third-party cover is the most widely applicable compulsory general insurance.
• A POSP sells only the simple, pre-underwritten products IRDAI permits.

Common misunderstandings

• Marine insurance is not only about the sea: cargo cover applies to goods moving by sea, air, rail or road.
• Employees' compensation insurance is not a policy bought by the worker: it protects the employer against a liability the law places on the employer.
• Cyber insurance does not automatically pay regulatory fines: they are covered only where legally insurable and where the wording says so.

Questions people ask