When offering facility to customers, depending on the credit worthiness of the customers, banks or financial institutions may require a form of guarantee that the respective facility granted will be repaid within the agreed period of time, including the profits that comes with it. As such, customers maybe required to pledge collaterals to secure the amount of money that is to be lent to them. In view of the importance of collaterals, therefore collaterals must be insured in order to protect their value worth to banks or financial institutions.

An insured collateral means that if anything were to happen to the collateral, e.g., for the case if a house has been damaged by fire, the insurance company will be responsible to cover the cost of the collateral amounting to the facility’s security.

Thus, this function allows user to maintain the insurance details of respective collaterals.