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NISM-Series-X-B: Investment Adviser (Level 2) · Non-Life Insurance Products

Travel, Liability and Other Non-Life Insurance Policies for NISM X-B

Updated 11 October 2026 · Fact-checked

These are general insurance covers beyond health, motor and home. Travel insurance covers trip risks. Professional indemnity covers errors in professional advice. Public and general liability cover injury or damage to third parties. Cyber insurance covers data and digital losses. To solve questions, identify who is harmed, what the loss is, and which cover responds.

Understand Travel, Liability and Other Non-Life Policies

Non-life insurance is a contract of indemnity. It pays for a defined loss from a defined peril, up to a limit. Travel, liability and specialty policies follow the same logic. Your job as an adviser is to match the risk to the right cover.

Travel insurance protects you during a trip. Typical covers are emergency medical expenses abroad, medical evacuation, loss of checked baggage, delay of baggage, trip cancellation or delay, loss of passport, and personal accident. Many policies also cover personal liability while travelling. Some countries require proof of travel cover for a visa. Policies come as single trip, multi-trip annual, student and senior citizen plans. Pre-existing conditions are usually excluded or restricted. So are adventure sports, unless you buy an add-on.

Liability insurance pays when you are legally liable to a third party. The third party is not you. It is someone you harmed. Professional indemnity covers claims from clients for negligence, error or omission in professional services. Doctors, lawyers, chartered accountants and advisers buy it. Public liability covers bodily injury or property damage to members of the public, for example a customer slipping in a shop. General (commercial) liability is a wider business cover. Product liability covers harm caused by goods you make or sell. Employer's liability and workmen's compensation cover injury to employees.

Cyber insurance covers losses from data breach, hacking, ransomware, cyber extortion, and business interruption from a cyber event. Individual policies may cover identity theft, online fraud, and restoration of data. Policies carry limits, deductibles and exclusions. Poor security practice or known prior incidents can affect claims.

Other specialty covers include marine cargo, fire, engineering, and directors and officers (D&O) liability. D&O protects directors against claims arising from their management decisions. Always check the sum insured, exclusions, waiting periods and who is the insured.

Key formulas to remember

Professional indemnity
Claim by client for negligent advice or service → PI policy responds
Covers legal liability and defence costs for errors or omissions. It does not cover deliberate fraud or dishonesty.
Public liability
Injury or property damage to a third party (public) → public liability responds
Covers harm to outsiders, not your own property or your own employees.
Indemnity limit
Claim payable = lower of (loss after deductible, sum insured or limit)
Use for any liability or cyber question with a limit and deductible.
Travel cover match
Medical, baggage, delay, cancellation, passport loss, personal accident
These are the core travel covers. Pre-existing illness and adventure sports are usually excluded unless added.

How to solve Travel, Liability and Other Non-Life Policies questions

Use this order for any question on travel, liability or specialty policies.

  1. 1Identify the loss event in the question: injury, negligence, data breach, baggage loss, cancellation.
  2. 2Ask who suffers the loss: the insured, a client, a member of the public, an employee or a director.
  3. 3Match to the cover: own trip loss to travel; client negligence claim to professional indemnity; outsider injury to public liability; digital loss to cyber.
  4. 4Check exclusions: fraud, pre-existing illness, adventure sports, war, known prior incidents.
  5. 5Apply the limit and deductible if numbers are given.
  6. 6Check the indemnity principle: payment cannot exceed the actual loss or the limit.
  7. 7Eliminate options that name the wrong cover type, then pick the best fit.

Quickest way: Who is harmed, what is the loss

When to use it: Use for scenario MCQs asking which policy responds.

  1. Own trip, own belongings: travel.
  2. Client sues for bad advice: professional indemnity.
  3. Stranger hurt on premises: public liability.
  4. Hack, ransomware, data theft: cyber.
  5. Directors sued for decisions: D&O.
  6. Then check exclusions and limit.

Common mistakes in Travel, Liability and Other Non-Life Policies

  • Choosing public liability for a client's claim about negligent advice

    Both are third-party liability covers, so they look alike.

    Fix: Advice or service errors by a professional go to professional indemnity. Physical injury or property damage to the public goes to public liability.

  • Assuming travel insurance covers every pre-existing illness

    Students remember medical cover but not its limits.

    Fix: Pre-existing conditions are usually excluded or restricted. Read the exclusions.

  • Thinking liability policies cover the insured's own property loss

    The word insurance suggests protection of your own assets.

    Fix: Liability covers legal liability to others. Own property needs a property or fire policy.

  • Believing professional indemnity covers fraud by the adviser

    Students treat any claim as covered.

    Fix: Deliberate fraud and dishonesty are excluded. Negligence, error and omission are covered.

  • Ignoring deductible and limit in numerical questions

    Students pay the full loss by habit.

    Fix: Subtract the deductible first, then cap at the limit.

Worked examples

Example 1

A client sues an investment adviser for ₹8,00,000 for a negligent error in a financial plan. The professional indemnity policy has a limit of ₹10,00,000 and a deductible of ₹50,000. Assuming the claim is covered, how much does the insurer pay?

Show the solution
  1. Loss: ₹8,00,000.
  2. Subtract deductible: ₹8,00,000 − ₹50,000 = ₹7,50,000.
  3. Compare with limit: ₹7,50,000 is below ₹10,00,000.
  4. So the insurer pays ₹7,50,000.

Answer: ₹7,50,000

Example 2

A customer slips and is injured at a client's shop. Which policy is the most appropriate to respond: travel, professional indemnity, public liability or cyber?

Show the solution
  1. Who is harmed: a member of the public, a third party.
  2. Type of loss: bodily injury on premises.
  3. Professional indemnity is for errors in professional services, so it does not fit.
  4. Travel and cyber do not relate to this event.
  5. Public liability covers injury to third parties.

Answer: Public liability

Exam tips

  • Match the cover to the loss event first. Most MCQs here are scenario matching.
  • Watch the words client advice or negligence for professional indemnity, and customer injury for public liability.
  • Remember fraud, war and pre-existing conditions are common exclusions.
  • With 25% negative marking, eliminate clearly wrong cover types before guessing.

Practice questions from Non-Life Insurance Products

Travel, Liability and Other Non-Life Policies: frequently asked questions

What is the difference between professional indemnity and public liability insurance?

Professional indemnity covers claims from clients for negligence, errors or omissions in professional services. Public liability covers bodily injury or property damage to members of the public. The first is about advice or service quality. The second is about physical harm.

What does travel insurance usually cover?

It usually covers emergency medical costs, evacuation, baggage loss or delay, trip cancellation or delay, passport loss and personal accident. Exact covers depend on the plan. Pre-existing conditions and adventure sports are often excluded.

Can individuals buy cyber insurance in India?

Insurers offer cyber covers for individuals as well as businesses. Features may include identity theft, online fraud and data restoration. Check the limit, deductible and exclusions in each policy.

Does professional indemnity cover fraud?

No. It covers negligence, error and omission. Deliberate fraud or dishonest acts are normally excluded.