Go Digit General Insurance Limited (Digit Insurance) has introduced India’s first parametric insurance based on the Air Quality Index (AQI) for construction workers in Delhi NCR. This initiative, launched in partnership with KM Dastur Reinsurance Brokers (KMD), aims to provide financial protection to migrant labourers affected by construction bans due to severe air pollution.
Key Highlights of AQI-Based Parametric Insurance
Compensation for Workers:
- 6,200 migrant construction workers in Delhi NCR will be covered.
- If air pollution breaches hazardous levels (AQI above 400) beyond two strikes, workers will receive up to ₹6,000 as financial assistance.
Trigger Mechanism for Insurance Payout:
- A “strike” occurs if the daily AQI exceeds 400 for at least 3 out of the previous 5 days.
- Two such strikes will automatically trigger compensation.
- A minimum gap of 25 days is required between consecutive strikes.
Why This Insurance is Important?
Impact of Pollution on Construction Workers:
- Delhi NCR frequently experiences hazardous air pollution levels, leading to government-mandated construction bans.
- Such bans directly affect the earnings of daily wage construction workers, creating financial instability.
- The insurance policy ensures workers receive financial support without delays.
How Parametric Insurance Works?
Unlike traditional insurance, parametric insurance does not require proof of actual loss.
Instead, payouts are automatically triggered based on a predefined environmental parameter (such as AQI exceeding 400).
Faster and Transparent Claims Process:
- No need for damage assessment or lengthy paperwork.
- Once the predefined AQI threshold is breached, compensation is released instantly.
Significance of this Initiative
First-of-its-kind environmental insurance in India, addressing financial vulnerabilities of migrant workers.
Ensures quick financial relief to construction workers affected by Delhi NCR’s pollution-related work bans.
Part of a broader effort by Digit Insurance to introduce climate-based insurance solutions.
Other Parametric Insurance Initiatives: In 2024, Digit Insurance launched an excess heat-related parametric insurance policy for women labourers in Gujarat.