How much could the Taj Hotel in Mumbai have been insured for? This is an interesting question engaging the minds of one and all, for can any insurance company compensate the loss?
While several appraisers are now assessing the loss in the Taj and Trident-Oberoi, the insurers will quantify the loss. Terror insurance not only covers loss of or damage to property, but also business interruption loss (BIL). To read more, please, visit - The Hindu
Related Stories:1) Hotels’ cover claims may be hit
Although both hotels, like all other major business establishments in the city, have taken out terror insurance risk cover, a circular (TOI has a copy of it) endorsed by the insurance tariff advisory committee, states that damages that occurred while preventing terrorist attacks, be it by the state or any private agency, will not attract insurance cover.
The circular, in the section on exclusions, states: "The warranty also excludes loss or damage, cost or expenses of whatsoever nature directly or indirectly caused by, resulting from or in connection with any action taken in controlling, preventing, suppressing or in any way relating to action taken in respect of any act of terrorism."
2) GIC says there's no splash in terror pool
The General Insurance Corporation of India (GIC), the national reinsurance company, has said that claims attached to terrorist attacks on the Taj and Oberoi hotels in Mumbai do not pose any threat to the terror insurance pool — a fund created by non-life companies to provide insurance against terror risks.
Although insurance surveyors have only just been appointed, the reinsurer says that the Taj and Oberoi hotels’ claims, which will run into hundreds of crores, will easily be the largest since the terror pool was created.
The lead cover for the Taj Mahal Palace and Tower hotel, which is owned by the Tata group’s Indian Hotels, is provided by Tata AIG. In the case of Oberoi — a part of East India Hotels (EIH) — the cover has been sold by United India. However, in the instance of terror claims, irrespective of which company issues the policy, the claim is borne by the pool.
At Taj, the damage has been largely to the heritage section of the hotel. There are about 200 rooms in the heritage section as against 339 in the tower. However, the heritage section houses the more expensive rooms with rentals going up to Rs 25,000 a night.
A large part of the heritage section has been gutted by fires caused by the terrorists. In addition to the rooms, the restaurants and the ballroom have also been damaged. Insurers say that the cost of setting up a new five star hotel works out to approximately Rs 1-1.5 crore a room.
In addition to the property damage, the hotels are likely to make claims for loss of revenue.
1) Restoring Taj hotel's glory may cost Rs.5 bn, take 12 months
2) We had warning - Ratan Tata, Chairman, Tata Group
3) The Final Fight at the Taj
4) India terror begins with corpses on train platform
5) Mumbai under attack - The Big Picture - Boston.com
6) Taj hotel now a destination for disaster tourism
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