In India, terrorism cover is offered by general insurance companies as an add-on policy with the fire insurance policy. The policy covers any material loss that takes place due to acts of terrorism. After the attacks on the World Trade Centre, US, in 2001, most of the reinsurers refused to give cover against acts of terrorism. General insurance companies in India then formed a collective pool and since then all the premium collections done by the industry for this policy are put in this pool.

“At present, the terrorism insurance pool has a corpus of more than Rs 1,000 crore,” said K N Bhandari, Secretary General of the General Insurance Council. “It will be too early to talk about the damage that has taken place. But whatever it may be, insurance companies are well capitalised and are in a good condition to meet any claims that may arise from such incidents,” said Bhandari.

Besides the material damage that takes place during such events, there is a loss of life and property as well that affects the business of a company long after such events. To take care of such losses, general insurance companies offer add-on covers like loss of profit, group personal accident and public liability.