The rising number of terrorist strikes has not dampened the festive spirit for
Navratri in Mumbai,
Durga Puja in Kolkata and
Ramleela in New Delhi.
However, efforts to buy anti-terror insurance for these public celebrations are turning into a futile exercise. General insurers are wary of underwriting terror risk cover for such events in the absence of reinsurance support.
"Terrorism is a major threat now and certain locations are definitely terrorism-prone. However, reinsurance for terrorism is available only if the sum insured is above $1 million (above Rs 4.5 crore). We normally discourage clients from taking terrorism cover," said a private general insurance executive, while admitting that there was a rush to buy cover for such functions.
Organisers of these festivities are keen to shop for event insurance policies with add-on terror cover, but many of them are forced to buy standard event insurance minus the terror cover.
Anti-terrorism insurance is not sold as a stand-alone policy, but as an optional cover available for an extra premium with an event insurance policy.
Corporates can take anti-terrorism protection by paying an additional premium while buying fire and property insurance at rates varying from 30 paise to Re 1 for every Rs 1,000 of the sum insured.
Terror cover for corporates is possible because of the Rs 600 crore (Rs 6 billion) terrorism pool created by Indian insurers after the 9/11 attacks in
the US.
The pool was created as international reinsurers had then refused to reinsure terrorism risks. It is meant to provide terror cover only for property and industrial units, and not for miscellaneous covers, including events.
Another executive from a leading private sector general insurer said: "Event insurance policy is a few days' policy, not providing sufficient time for client's availability. Also, reinsurance is available on merit. Reinsurance for sum insured (lower than Rs 4.5 crore) becomes uneconomical."
The broking community said it was difficult to convince insurance companies to provide terror cover for such events and many of the
Navratri events for which event insurance policies have been bought are
without terrorism protection.
An increasing number of Dandiya organisers across Mumbai and Ahmedabad have bought event insurance covers for the 10-day festival.
Oriental Insurance has received about 25 proposals for insuring
Navratri mandals in Mumbai alone, up from just 3-4 proposals received last year.
A standard event insurance policy is mostly a fire and special perils policy with three main covers attached - fire and personal accident cover, public liability cover and purchase protection cover.
Normally, these policies are tailor-made for each event, depending on the needs of the organiser. There can be add-on features with additional premium, depending on what the organiser wishes to insure.
