Burglary Claim: Inducement and Inconsistent Stock Records
You are appointed to survey a burglary claim at a jewellery shop insured for Rs 1.2 crore under a shopkeepers' policy. The FIR says the shutter was cut and gold ornaments worth Rs 38 lakh were stolen. The insured's son, who handles accounts, offers you Rs 1,00,000 'for your trouble' if you include a set of uninsured silver articles worth Rs 6 lakh in the loss. He also says the insurer's agent told him 'surveyors always inflate the first report; the insurer will bargain'. Your preliminary checks show the stock statement submitted at proposal was Rs 90 lakh, while the pre-loss stock register shows Rs 1.35 crore, and purchase invoices for the silver are missing. The insured is a repeat customer of the insurer with no prior claims. Your fee arrangement is a fixed professional fee, not a percentage.
1. Identify the ethical and regulatory issues raised by the offer and the agent's statement. What should you do?
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The offer of Rs 1,00,000 is an attempted inducement to prepare a false report. Accepting it would be dishonest and would breach the surveyor's code of conduct under the 2015 Regulations, which requires independence, integrity and avoidance of any inducement or gift connected with the assignment. The surveyor must refuse clearly, not negotiate, and record the offer in writing to the insurer. The offer should not be concealed, because concealment itself undermines the insurer's ability to investigate.
The agent's reported statement does not justify inflating anything. A surveyor's duty is to assess the actual loss, not to produce a bargaining figure. The fixed fee is appropriate; a fee contingent on the claim amount would also be improper. I would tell the insured's son that the report will be based only on evidence, ask him to put any documents forward, and separately inform the insurer of the attempted inducement and the agent's alleged remark. Depending on the insurer's response, the matter may also be reported to IRDAI.
2. How do you assess the claim when the stock records are inconsistent? Discuss burden of proof and the approach to the silver articles.
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The burden of proving the loss is on the insured. The surveyor should reconcile the proposal stock statement, the stock register, purchase invoices, GST returns, sales records, bank deposits, insurance valuation and the FIR. The proposal showed Rs 90 lakh, the pre-loss register shows Rs 1.35 crore, and the silver invoices are missing. That does not automatically prove fraud, but the silver is not proven to be insured stock. Unless the insured produces purchase evidence, stock register entries and a satisfactory explanation for the missing invoices, the Rs 6 lakh silver should be excluded.
If the stock at risk is accepted as Rs 1.35 crore against a sum insured of Rs 1.2 crore, the average clause applies: 1.2/1.35 = 88.9% of the proven loss. But the surveyor should first test whether the higher stock figure is genuine, because an inflated stock figure can itself be an attempt to support an exaggerated claim. The insured should be given a written opportunity to explain the discrepancies before the report is finalised.
3. Draft the key sections of your report and state your recommendation on the silver and the overall claim.
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The report should contain: appointment and terms; policy schedule and endorsements; description of the risk and security; cause and circumstances of loss; FIR and investigation status; documents verified; stock reconciliation; assessment of gold loss; treatment of silver; average clause calculation; salvage and excess; discrepancies and insured's explanation; conclusion and recommendation.
On the silver, I would recommend exclusion unless ownership and pre-loss stock are independently proved. On the gold, I would admit only the proved quantity and value, apply average at 88.9% if the stock at risk is accepted at Rs 1.35 crore, and deduct any excess. The attempted inducement should be reported to the insurer in a separate covering note, not hidden in the financial calculation. The report should be factual and avoid accusing the insured of fraud; it should state that the evidence is insufficient and leave the coverage decision to the insurer.