Bharat Diamond Bourse to double cover to R1,000 crore

Written by Sitanshu Swain | Kumud Das | Mumbai | Updated: Jul 21 2011, 05:50am hrs
On the backdrop of fresh terror attacks in Mumbais Zaveri Bazar, the massive Bharat Diamond Bourse, the newly built diamond trading hub has beefed up its security arrangement and is planning to double its cover from R500 crore to over R1,000 crore at the time of renewal of its insurance policy due in October.

The swanky complex in the business district of Bandra Kurla is planning to start its operations from August 15. Speaking to FE Anoop Mehta, president, Bharat Diamond Bourse, said, The building currently has a total cover of R500 crore and we have paid R10 lakh for getting the terror cover. We would like to double the cover size to R1,000 crore in October, when the renewal for the cover is due.

Apart from the complex, each of the 250 members of the bourse has taken their own cover for themselves and their business.

Bharat Diamond Bourse has also decided to follow strict measures to tackle any security risks. Outsiders will be allowed inside the complex only on specific reference. They will also have to to deposit their identity cards with the bourse. The complex will be fully operational by March 2012, he said.

Meanwhile, insurers such as Life Insurance Corporation (LIC) and ICICI Lombard General Insurance have received claims from the victims of the terror attacks on July 13. No property damage or large claims have been reported thus far, the insurers said.

An official spokesman of LIC said that the corporation has settled claims against two policies from the victims of the recent terror attacks in Mumbai. We have paid a sum of R4.91 lakh against the two policyholders. These settlements include double accident benefits with them.

Insurers feel the latest attacks will make people go for terror cover. M Ramadoss, CMD, New India Assurance, said, The demand for terror cover should go up in the light of the recent Mumbai blasts. The problem is that despite heightened terror risks in the country, there is not much awareness on the subject.

Also, the the terror pool, a mechanism set by the Irda to deal with terror claims, cant cover anything other than property damage. I do hope that the demand for personal accident cover should go up. Premium for such cover is as small as R40-50 per lakh, Ramadoss said.

Gaurav Garg, MD and CEO, Tata AIG General Insurance, said, We havent seen any increase in enquiries after the recent blasts. Maybe people have already taken a number of other policies. We had seen some increase in these covers after the terror attacks on hotels like Taj and Trident three years back.

Rajive Kumaraswami, head, risk and re-insurance, ICICI Lombard General Insurance, explained that terrorism cover can be provided to property and claims can happen due to death, disability, expenses incurred during hospitalisation or damage to motor vehicle due to the terrorism incidence.

For property related risks, the Indian market terrorism pool has a per risk capacity of R7.50 crore.The rates terms and conditions are pre-defined. Whether the rates would harden as a consequence to the said incident is difficult to state at this stage. It is a decision which the underwriting committee of the pool would take and would need Irda approval for implementation.

For any risks which are beyond the pool capacity, the international market provides capacity and some hardening of rates could be expected.