Mumbai: Indian Premier League (IPL) organizers have been hit by a steep increase in premium payments to insure against terror attacks. A fivefold increase in the cost of insurance against terror strikes may have caused the organisers to alter plans for a Rs400 crore insurance cover, saving IPL Rs5 crore in premiums, people familiar with the development said on condition of anonymity.
The organizers have taken an alternative route. Oriental Insurance Co. Ltd will cover every match for Rs7 crore; this will include broadcasting interests, sponsorship losses and budgeted expenses of the match. Terror cover would be a part of the comprehensive cover, which will cost the organizers less than Rs1 crore in premium.
“As the sum insured of Rs7 crore includes the terror cover, we are not approaching reinsurers,” said Reena Bhatnagar, deputy general manager of Oriental Insurance. “So the overall cost of the comprehensive insurance coverage has not increased much.” Reinsurers protect insurance firms against the risk of losses.
Oriental Insurance will also be insuring the eight IPL franchisees for the players they bought in auction, under what London’s reinsurers call Death and Services. This includes death and accident cover. The front provided by Oriental Insurance will also include cover against loss of baggage and medical expenses.
Under insurance regulations, insurance cover for Indian entities such as the IPL franchisees will have to be provided by an Indian insurer, and backed by a reinsurer. Bhatnagar says, “We have already received cheques from four franchisees. The other franchisees are in the process of sending in their premium cheques.”
Franchisees are looking for insurance cover against abandonment of matches because of multiple perils such as weather, riots and terror attacks, people familiar with the situation said on condition of anonymity. Talks are under way, but the franchisees are yet to finalize the details of such coverage.