Insured against terrorism

The Taj Mahal and the Oberoi group hotel, The Trident, might not have expected a terror attack of this scale, but the two iconic landmark hotels do have terrorism insurance cover, which would make up for the material losses they incur in this attack. While the Taj Hotel is insured jointly by Tata AIG General Insurance 65 per cent, ICICI Lombard 30 per cent and Iffco Tokio General Insurance 5 per cent, Trident is primarily insured by United India Insurance. Both the hotels are understood to have taken terrorism cover and loss of profit as add-on policies with the fire insurance covers from their respective insurers. The amount of cover that both the hotels have could not be ascertained.

In India, terrorism cover is offered by general insurance companies as an add-on policy with the fire insurance policy. The policy covers any material loss that takes place due to acts of terrorism. After the attacks on the World Trade Centre, US, in 2001, most of the reinsurers refused to give cover against acts of terrorism. General insurance companies in India then formed a collective pool and since then all the premium collections done by the industry for this policy are put in this pool.

8220;At present, the terrorism insurance pool has a corpus of more than Rs 1,000 crore,8221; said K N Bhandari, Secretary General of the General Insurance Council. 8220;It will be too early to talk about the damage that has taken place. But whatever it may be, insurance companies are well capitalised and are in a good condition to meet any claims that may arise from such incidents,8221; said Bhandari.

Besides the material damage that takes place during such events, there is a loss of life and property as well that affects the business of a company long after such events. To take care of such losses, general insurance companies offer add-on covers like loss of profit, group personal accident and public liability.