Remembering 26/11: Insurance claims of Rs 376 crore settled after Mumbai attacks

Insurance claims of over Rs 376 crore was settled after the Mumbai attacks in 2008. The fund that covered most of the claims was the Indian Market Terrorism Risk Insurance Pool (IMTRIP) which was formed in the wake of the September 11 attacks on the World Trade Centre in the US in 2001.

The losses of up to $10 billion in the 9/11 attacks had forced the global insurance industry to rethink and develop a new strategy for terror cases . Before the WTC attacks, terrorism risk was included in "all-risk" insurance policies at no added cost.

After WTC attacks, terrorism risk cover was withdrawn from insurance policies. Existing policies were cancelled and new insurance policies were issued, excluding terrorism cover. Now, terrorism coverage is generally offered separately at a price.

In India, the IMRTRIP covered the affected locations in the Mumbai attack. IMTRIP has a growing corpus stacked up during the course of more than 15 years and adequate resources available to meet liability arising out of any unfortunate incident. Combined with a decline in claims ratio, risk pools such as IMTRIP have a comfortable premium reservoir.

Just like other countries, terrorism cover is an optional add-on cover in India too. It provides cover to individuals and businesses for potential losses due to acts of terror. The premium charged varies as per the risk occupancy and sum insured. Mid-term inclusion of terrorism is also not allowed.

Most corporates are opting for terror cover for their employees and buildings. Plants owned by nearly all top corporates are covered. Large energy companies such as ONGC have diffrent types of insurance and terrorism insurance. Some of the large infrastructure projects such as Metro projects, ports, airports and flyovers have also started taking terror insurance cover.

Also read: Decade after 26/11: What security measures has India taken to prevent repeat of Mumbai attacks?