Dec 3, 2008

India - Hotels were insured for Rs2,800 cr

Nandini Goswami

Review of losses at Taj, Oberoi and Trident will take time

KOLKATA: The three biggest hotels ravaged by the Mumbai carnage — the Taj, Trident and Oberoi — together are said to be insured for about Rs2,800 crore.

The insurance covers material damage, business interruption, allied perils and terrorism. Industry sources said assessment of losses will take a few days as the properties have just been thrown open to the authorities.

While the Taj is insured by Tata AIG General Insurance, ICICI Lombard and Iffco-Tokio for around Rs970 crore, Trident and Oberoi are insured with New India Assurance for almost Rs792 crore and Rs1,012 crore. The Indian Terrorism Pool, which was formed post 9/11 to tackle terror risks by all general insurers will ultimately pay the claim amount arising out of damage to property and business interruption.

Though the ground work for assessing the losses is yet to begin, preliminary indications are losses could be high on account of loss of profit risks if the hotels remain closed for a few months.

“Even if the hotels or parts of the hotels remain closed for five to six months, the losses would be quite substantial,” sources said. This is because all these are high value properties with high occupancy and premium rates. All these three hotels have significant amount of coverage under the ‘loss of profit’ or ‘business interruption’ cover.
Estimates suggest Taj has almost Rs270 crore coverage under this head, while Oberoi and Trident have around Rs140 crore and Rs230 crore.

Claims for material damage, which will soon be assessed by engineers, could also run into crores. “It is difficult to ascertain the extent of damage at this juncture. The heritage building and some of the floors at the Taj have been badly damaged. It could be a maximum of about Rs10 lakh per room as we have seen in earlier worst cases of material damage in a fivestar hotel,” an industry surveyor said.

The Indian Terrorism Pool only insures damage to property. Losses arising from personal accident and public liability, which is the liability of the hotel toward its guests, which may be equally large will not be a part of the claims from the Pool.

2 comments:

Martin said...

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sushantap said...

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