Terror Cover

Written by Kiran Yadav | Updated: Dec 1 2008, 04:58am hrs
After more than 62 gruelling hours of assault at the Taj and Trident-Oberoi hotels in Mumbai, the damage in value terms is yet to be ascertained. However, according to reports both the Taj and the Oberoi-Trident hotels in Mumbai have terror insurance cover.

According to Dr KC Mishra, Director, National Insurance Academy, India, 65% of the Tajs insurance is with Tata AIG, 30% with ICICI Lombard and 5% with Iffco-Tokio. Trident-Oberoi on the other hand has 100% of its insurance with United India Insurance. And as far as I know about 15% of it is reinsured.

Terror cover usually provides not only for the property damage but also for all the deaths that have taken place within the premises. The claim for the latter will be settled on the basis of the value of the human life lost, keeping into consideration the deceaseds designation, earning etc, says Mishra.

However, G Srinivasan, Chairman and Managing Director, United India Insurance when asked clarified they only provide Public Liability Insurance to Oberoi. However he also added that Terror insurance is quite popular with large corporate houses and they provide the cover to quite a few of them.

With the increased threat of terrorism, public, private, and governmental agencies face an increased need to understand and manage the risk to their employees, organisational assets and business continuity. A detailed risk management plan and insurance covers can effectively reduce the risk and its monetary impact, says Deepak Sood, CEO of Future Generali India.

However, it may not be easy to acquire terror insurance in a jiffy. We dont allow taking terror insurance in the middle. We provide it as an add-on at the beginning of the policy itself, says S Narayanan, Managing Director, Iffco-Tokio.

Broadly, there are three types of terror insurance covers: At the individual level it is .8%; Non industrial insurance at .13% and industrial at .15%. It might seem intriguing why terror insurance has not been advertised widely despite the spate of recent terror attacks.

The corporate houses are well aware of it. All the MNCs in India and almost all of the top 100 corporate houses in India have terror insurance. Yes, it is yet to catch up with individuals, adds Mishra. Considering the fear psychosis across India, chances are that terror insurance may also become as indispensable for the average Indian as life insurance. Clearly, it is all about risk perception.

The terrorism insurance pool was set up by the Union Finance Ministry after 9/11 attacks in the US. All General Insurance companies are part of it and its corpus has more than doubled since to Rs 600 crore. Capacity is not a constraint at all, asserts Mishra.