This article emphasises the importance of Books of Accounts, and other Accounting record for Assessment and Adjustment of the Insurance Claims.

1. BOOKS OF ACCOUNTS AND INSURANCE CLAIMS :
Books of accounts and accounting record plays very vital role in Fire and
Miscellaneous Insurance claims. In case of Fire claims when the goods are damaged
due to fire many a time it turns in to ashes especially, when goods are like cotton,
fibre, food grain, baggase, cloth etc. Similarly then the goods are like petroleum
products, oils, chemicals, pharmaceutical items etc. the same is completely damaged
due to fire. In such a case it becomes difficult to quantify the loss post fire scenario.
Same is a case when the stocks are lost due to burglary.
Many a times in Fire and Theft/Burglary claims, when the Insured claims the
quantity as destroyed/lost, it comes difficult for the Surveyor and Loss Assessor/
Insurance Adjuster to countify the same. In such cases the Insured can substantiate
his claim, if he has maintained proper books of accounts. By proper books of
accounts I mean the purchase, sales record, banking transaction record, quantitative
stock record, proper taxation record. If the Insured is a manufacturer he needs to
keep proper manufacturing record. If the Insured has availed finance from the banks
or financial institutions, he may be required to submit the periodical stock
statements to them. Such a record also, to some extent is accepted as an
accounting record in support of the insurance claim. Periodical Returns filed to the
Sales-Tax, Income-Tax Departments may also be considered as accounting record in
support of the Insurance claims.
The Insurance policies do not prescribe the condition that, it is mandatory on the
Insured to maintain proper books of accounts. In this context it is argued by the
underwriters that, it is the duty of the Insured to substantiate his claim. It is also
argued that, the Insured is expected to follow rules, regulations and laws of the
country. But in practice it is observed that, the Insured is either not aware of the
rules and regulations, laws etc. or he do not recognize the importance of the
keeping proper accounting record. Ultimately it may create un-necessary
confrontation, disputes, arguments, litigation with the Insurers.