Jolted jewellers rush to get terror insurance cover

Rs 1.5 crore and will be paying an additional terror premium every year.

“Typical of my Marwari community,I too had a thrifty attitude and considered insurance,especially one against terror,an unnecessary expenditure. But now the sense of security has been shaken. A terror strike could happen while we are travelling with our valuables in trains,in our congested lanes or in the workshops where our skilled labourers design the jewellery,” said Jain. He admits that the thought of taking insurance didn’t cross his mind in 2003 when a blast claimed 54 lives and damaged property in the area. “Back then,gold cost only Rs 7,000 per 10 gm,now it has reached

Rs 23,000,and we can’t afford to take chances just to save the premium amount,” he said.

“As every jeweller has some black money,most of us do not want to show everything in white while taking an insurance cover. However,after the blast ripped through the lane behind our shop,I convinced my father that the possible losses could be much greater than the money we are trying to hide,” said another local jeweller Hitesh Shah.

Bavesh Kataria,who runs an insurance consultancy firm exclusively for gems and jewellery businesses,said in the week following Wednesday’s blasts,about 20 jewellers have already approached him for taking a cover against terror. Shah,who has a total of 800 clients from Zaveri Bazaar alone,said,“Most jewellers take a basic insurance cover for transit losses or burglary; they do not bother to take a terror cover unless there is a threat perception. After the 2003 blasts,out clientele from this area doubled. We are seeing a similar trend this time again.”

The terror pool,a product of a post 9/11 world,was set up in India in 2002 with a sum of Rs 200 crore. All the money collected by the 21 insurance companies towards terror premium goes directly into this pool managed by the Centre-owned General Insurance Corporation of India (GIC). Terror insurance has to be mostly taken as an add-on cover by payment of additional premium.

GIC chairman Yogesh Lohiya said,“In the wake of terror attacks,people rush to take a terror cover,which is otherwise completely ignored during normal times.” The terror pool is flush with a total of Rs 1,750 crore even after doling out the Rs 500 crore to Taj and Oberoi hotels after the 26/11 attacks in Mumbai.

Lohiya added that usually only corporates and big industries insure themselves against terror. This time,however,with the blasts hitting mainly smaller traders,no claims have been filed so far.

Bharat Diamond Bourse to double cover

Among the many that have been forced to take a relook at their insurance scheme due to the increased risk perception is the Bharat Diamond Bourse (BDB) in Bandra-Kurla Complex. The BDB will soon be the nerve centre of diamond trade after the entire industry shifts out of Opera House area,which was also hit during last week’s blast. BDB president Anoop Mehta said they will soon be doubling their insurance cover of Rs 505 crore when it comes up for renewal later this year. “Each of our 2,400 members are expected to insure their offices on their own. For the buildings,we have taken an insurance cover worth Rs 505 crore,which is the estimated construction cost of the bourse. We are also paying a separate annual terror premium of Rs 10.5 lakh,” said Mehta.