Business Daily from THE HINDU group of publications
Friday, Nov 27, 2009
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Friday, Nov 27, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Money & Banking
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General Insurance Industry & Economy - Terrorism Terror cover policies to pay for damage by security force actions too
Manish Basu Kolkata, Nov.26 Terrorism insurance policies will soon provide cover for damage caused to properties by military rescue operations in the event of an incident of terror similar to the one that shook Mumbai a year ago. The 26/11 Mumbai terror attack has changed the way damage to a property is to be viewed with respect to terrorism insurance policies. “The entire claim of about Rs 500 crore arising from the Taj, Oberoi, and Trident hotels, irrespective of whether the damage was caused by the terrorists or the Defence forces, will be paid off from the terrorism pool,” a senior officer at the General Insurance Corporation (GIC) of India, familiar with the development, told Business Line. This, he said, will also apply to any future event of terror, similar to the 26/11 attack, where the intervention of security forces could restrict loss of lives of hostages or damage to the insured buildings. Tata AIG, New India Assurance, ICICI Lombard and Iffco Tokio were the insurers to the three hotels under attack. According to the terrorism damage coverage endorsement of the Terror Pool, administered by GIC, any permanent or temporary damage resulting from confiscation, commandeering, requisition or destruction by order of the Government or any lawfully constituted authority will not be covered under the insurance policy. While GIC is unlikely to modify the endorsement wordings immediately, it may relax the exclusion in a situation where the rescue mission is triggered to restrict further damage. “Prior to 26/11, military and police operations against terrorism were restricted only to the flushing out of terrorists from buildings in places like Jammu and Kashmir. More clarity sought“The damage to the buildings, in which the terrorists were holed up, was thus excluded from the claim as per the endorsement,” the GIC officer said. The insurance companies this correspondent spoke to, however, seemed to be asking for more clarity in the claims endorsement wordings. “It will lead to lesser complications in providing a proper indemnity cover to our customers if the exclusion is totally withdrawn,” a senior officer at the National Insurance Company said. “A level of clarity in the claim settlement wording is desirable. A standardisation of the exclusion clause is justified as a larger damage to the insured property could occur if the terrorists blow up the property due to a delay in rescue operation,” the Chairman and Managing Director of a public sector insurance company said on condition of anonymity. Terror cover: Final claims from Mumbai hotels may be at Rs 500 cr More opting for terror cover More Stories on : General Insurance | Terrorism
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