Reliance refinery insured for Rs 50,000 cr

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Reliance refinery insured for Rs 50,000 cr

The Jamnagar refinery of Reliance Industries Ltd, affected by a fire on Wednesday, is insured for around Rs 50,000 crore. The policy was, in fact, renewed for a higher premium of Rs 180 crore on October 1, 2006, against Rs 130 crore last year.

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The Jamnagar refinery of Reliance Industries Ltd , affected by a fire on Wednesday, is insured for around Rs 50,000 crore. The policy was, in fact, renewed for a higher premium of Rs 180 crore on October 1, 2006, against Rs 130 crore last year.

"This is a mega-risk package policy shared by four public sector insurance companies and two private companies. The bulk of the cover is reinsured abroad," said a senior official of a public sector insurance company.

While New India Assurance is the lead insurer of the plant with a stake of 60 per cent, other companies which have co-insured include Oriental Insurance company (15 per cent), ICICI Lombard (10 per cent), Bajaj Allianz General (5 per cent), United India Insurance (5 per cent) and National Insurance Company (5 per cent).

An official at New India Assurance confirmed the total insurance package at around Rs 50,000 crore. According to a co-insurer, the property cover, which insures the plant against fire and other perils, is worth Rs 28,000 crore, while the loss of profit (production loss due to interruptions) cover has a sum assured of around Rs 22,000 crore.

The business interruption cover provides for the reimbursement of lost income and necessary standing expenses. They have a deductible period of 15-30 days after which insurance kicks in; in other words, the company will not be reimbursed for the said period. In the case of Reliance, the deductible period has been fixed at 30 days.

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