The Virus Cover

The coronavirus pandemic has created the need for a ‘Virus Insurance Pool’ on the lines of terrorism and nuclear pools

- Anand Adhikari

When the nervous global reinsuers pulled out from offering terrorism insurance cover after the 9/11 terror attack in the US, the general insurance industry in India came together with an innovative idea of creating a 'Terrorism Risk Insurance Pool' in the early years of the 2000 decade. Individual insurers started offering terrorism cover as one of the add-ons to existing property insurance policies. Over the years, India has built a capacity of ₹2,000 crore under the pool to cover terrorist attack on business establishments like 26/11 when the iconic Taj Mahal Palace Hotel and the Trident suffered heavy losses to property and business in Mumbai.

More recently, the industry created yet another pool - Nuclear Insurance Pool - for nuclear operators and suppliers to cover corporate liability or losses arising from a nuclear accident at plants. This five-year-old nuclear pool has already built a capacity of ₹1,500 crore, which gives domestic insurance companies comfort when global reinsurance is not easily available. The Bhopal gas tragedy of December 1984 still sends shivers down the spine. These kinds of events may happen once in a decade or century, but they create havoc with life and business. The current coronavirus crisis is a new addition to the insurance lexicon.

The Pandemic Pool

• In future, an insurance pool can be formed to offer cover for pandemics
• Government takes initiative, puts in initial capital
• All general insurance companies come together
• GIC re becomes the nodal agency
• A uniform premium rate is offered for