Hotels and hospital owners who suffer losses when factors such as blasts, earthquakes or epidemics hit their occupancy rates, may soon have an insurance cover to fall back upon.
Government-owned Oriental Insurance Company is considering of launching a policy that will cover loss of business due to such external factors for hotels and hospitals. Presently, hotels and hospitals buy a package cover which is a combination of a property cover and a liability cover.
“Currently, the package policy for hotels and hospitals does have a loss of profit cover,” said Niraj Kumar, general manager, Oriental Insurance. “However, the loss of profit policy covers business risks only if there is a damage to the hotel property. But what if there is calamity or a blast due to which people cancel their bookings? The policy will look at covering such business risks.”
A hotel insurance policy comprises covers for factors like fire, burglary, loss to guests and property, machinery breakdown and terrorism.
But potential buyers are not taken in. “We are more interested in covering inherent risks associated to a calamity or a terror attack to the property and assets of the hotel rather than insuring the loss of business arising out of the same,” said Vibhas Prasad of Leisure Hotels. “The claim settlement may take time and is generally full of legalities.”