An Indian consumer commission has ordered Liberty General Insurance Company Limited to pay ₹11.29 crore plus interest to an India–Japan joint venture after finding deficiency in service in the handling of a fire insurance claim. The Additional District Consumer Commission, Chennai (North) ruled in favour of Mipalloy Nomura Plating Company LLP, a copper and copper-alloy plating, recoating, and refurbishment unit serving steel plants from Sriperumbudur in Tamil Nadu. The company held a fire and allied perils policy with Liberty General with a sum insured of ₹28 crore and had renewed the cover annually since 2014 without previous claims.
A fire broke out at the plant on April 10, 2019. The company informed the local fire authorities and the insurer the same day, and a First Information Report was filed with the police the following day. Mipalloy Nomura then submitted preliminary loss details and supporting documentation within the required timelines, presenting a claim of ₹19.07 crore. Survey and forensic assessments later concluded that the fire originated from an electrical short circuit.
In its complaint, the policyholder said Liberty General’s investigation was prolonged and that it was not provided with a complete survey report. It also contended that the insurer did not release an interim payment that it said was required under regulations issued by the Insurance Regulatory and Development Authority of India (IRDAI). According to the commission’s order, a revised final survey report was issued only in October 2022, nearly three years after the incident. The claim was subsequently repudiated by email in January 2023. The complainant stated that no detailed written communication or settlement followed, and that it approached the High Court to obtain access to claim and survey documents.
Liberty General argued before the commission that the insured premises did not comply with required safety measures, pointing to the absence of automatic sprinklers and alleged breaches of factory safety norms. The commission noted evidence that the plant was equipped with fire hydrants, alarms, extinguishers, and trained personnel and held a valid fire licence. It held that automatic sprinkler systems were not a mandatory requirement in this case. Counsel for the complainant, advocate Sanjay Pinto, said the decision reflected established fire insurance principles. “This landmark ruling should serve as a wake-up call to insurers. In cases of fire insurance, the law is well settled that as long as the policy holder is not the instigator of the fire, the claim must be paid,” Pinto said, as reported by The Hindu. The commission directed Liberty General to pay ₹11.29 crore jointly or severally, together with interest at 6% per annum from Nov. 7, 2024. It also awarded ₹5 lakh as compensation for mental agony and deficiency in service and ₹10,000 towards litigation costs. The order stipulates that the amount be paid within 45 days; if not, interest on the award will rise to 9% per annum thereafter.
The ruling comes alongside new IRDAI data indicating that policyholder complaints in India remain limited when compared with the overall size of the market and claims volumes, even as certain categories of grievances have increased. In its annual report for financial year 2024–25, IRDAI recorded 257,790 grievances across life, general, and health insurance. Life insurers accounted for 120,429 complaints, broadly in line with 120,726 in the previous year. General and health insurers together received 137,361 complaints. For life insurance, almost 64% of grievances related to survival benefits, policy servicing issues, and unfair business practices. The remaining complaints involved death claims, proposal processing, and disputes related to unit-linked insurance products. In the general and health segment, claims handling issues accounted for 69% of all grievances.
Complaints categorised as unfair business practices rose to 26,667 in 2024–25 from 23,335 in the previous year. Most policyholders used the regulator’s Bima Bharosa portal to lodge complaints. The platform is integrated with insurers’ internal grievance redressal systems, allowing customers to submit and track complaints online while enabling IRDAI to monitor redressal. Additional access is available through the IRDAI Grievance Call Centre, which supports toll-free and email-based channels. Despite the prominence of claims-related issues in the general and health segment, IRDAI data shows that such disputes remain low compared with total claims volumes. Life insurers registered 33,280 claims-related complaints against 2.668 million claims, while general and health insurers recorded 88,841 claims-related grievances against 1.126 billion claims during the year.
Beyond Bima Bharosa, 14,156 complaints reached IRDAI via the central government’s Department of Administrative Reforms and Public Grievances portal in 2024–25. Of these, 14,113 were resolved, leaving 332 pending as of March 31, 2025. IRDAI has instructed all insurers to maintain Policyholders’ Protection, Grievance Redressal, and Claims Monitoring Committees, appoint grievance officers at every place of business, and operate internal escalation mechanisms for complaints and claims.
