Hotels Taj, Oberoi both insured against terror

TERROR INSURANCE: While memories will be heavy, the financial burden will be eased with insurance backing.

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Mumbai: Mumbai is no longer under seige but it will take a while to ascertain the total damage terror has caused to premier properties, and also its business. But both the Oberoi-Trident and the Taj Mahal hotel have the terrorism cover to shield them with not just property damage but also the interruption in business till the time they are restored.

While TATA AIG, ICICI Lombard and IFFCO TOKIO are the insurers of Taj Mahal hotel, New India provides cover for the Oberoi-Trident. All the insurers are part of the terrorism pool, Which provides a cover upto Rs 750 crore per case. It has been roughly estimated that the damage to Taj Mahal hotel is approximately Rs 500 crore.

Most experts believe that as both Taj Mahal hotel and the Oberoi-Trident are a part of listed companies, they would reassessed regularly the value of their properties and hence would be sufficiently insured.

However, owing to confidentiality of the insurance agreement, the exact sum insured is not known. Therefore even if the cover exceeds the terrorism pool limit, insurance companies would have had additional reinsurance from GIC or the international reinsurer.

EIH Vice Chairman, S S Mukherjee says, "Financially there may not be any loss, as loss of profit is also insured."

Meanwhile, cnn-ibn has also learnt from its sources that TATA-AIG has provided the liability cover to both Taj Mahal hotel and the Oberoi-Trident. Sources also say that insurance companies have started the process of assessing the damage but will be able to ascertain it only after two weeks or more.

And while the memories of a burning Taj Mahal hotel will weigh heavily, at least the financial burden will be eased with the insurance backing.