Insurance companies are not known for making multi-million dollar coverages easily available and very frankly if they keep doing so, then they would not be in the business. This is the reason I was shocked when I read that Tata AIG which is the main insurer for Taj Mumbai and New India Assurance Co., the key insurer for Trident Mumbai, had agreed not only to cover the damage caused by terrorists but also all losses including the ones caused by security agencies. Their argument was that they were unable to differentiate the damage caused. (Yeah Right!!!)So what's the catch? Did they get "Enlightened" overnight? I don't think so. Its a simple logic of not entering a skirmish when you know that you won't win and would damage your image in the process, something similar to what Indira Gandhi did not realize during the 1970s.
If the case goes to the court for coverage of all losses, then the chances are that the case will be ruled in favour of the hotels. What might cause more damage for the insurance companies is that they may lose pubic confidence if they deny the coverage, especially when the Mumbai attacks have become a sensitive issue for the entire nation.
I am sure that the Insurance Companies are not happy to pay, especially when we are looking at a figure between Rs 750 - Rs 1300 crores. Ouch!!!!!! That's gotta hurt....
Posted by Rahul Gosain
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