Insurance companies Tata-AIG and Oriental Insurance will take a major hit on account of damage to the properties suffered at iconic Taj and Oberoi-Trident during the terrorist violence that ended earlier in the day.
Both the five-star hotels, which witnessed major casualties and excessive property loss during the past three days, were insured against terrorism and hence the insurance companies will have to bear the burden towards reconstructing and refurbishing the damaged hotels.
Although the extent of damage to hotels is yet to be ascertained, industry sources said, while Tata-AIG General Insurance Company was the lead insurer in case of Taj hotel, the Oberoi-Trident was insured with a consortium led by state-owned Oriental Insurance Company.
Besides the cost of reconstructing the damaged properties, the insurers will also have to compensate the owners for loss of business.
Apart from the lead insurer, in case of Taj Hotel 30 per cent insurance cover was provided by ICICI Lombard and 5 per cent by Iffco-Tokio General Insurance. Part of insurance cover in case of Oberoi-Trident was provided by Chennai-based United India Insurance.
Terrorism cover in the country is offered by general insurance companies through a common pool which presently has a corpus of about Rs 1,000 crore.
The terrorism cover, which comes alongwith with the fire insurance, takes care of material losses on account of terrorism activities.
For premium of Rs 1,000 the policy holder is required to pay additional Rs 0.25 for terrorism cover, said Optima Risk Management Director Rahul Aggarwal.
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