United India to pay for Kolkata bridge collapse, lives lost

United India Insurance Company will foot the bill of rebuilding the IVRCL bridge that collapsed in north Kolkata as well as liability arising out of lives lost. "We have received intimation and have deputed surveyors," said a United India Insurance executive, who did not wish to be identified.

"The claim will be paid as part of the construction policy that covers both cost of rebuilding and third-party liability," he said. This could come as a relief to the Hyderabad-based infrastructure company which is grappling with liquidity issues and high debt. As per the policy, the insurance company will pay either 10% of the sum assured or Rs 10 crore if the project size is less than Rs 100 crore. In this case, the project size is more than Rs 100 crore, so third-party liability could go up to Rs 25 crore.

Several employees of IVRCL were detained following the collapse. The company officials hinted that the bridge might have collapsed due to a bomb blast. The insurance policy, however, does not offer cover for terrorism. "If the accident has happened due to a bomb blast as the officials are indicating, we will not have to pay any claim," the executive said.

Terrorism cover is generally excluded from a standard project insurance policy. It is taken over and above a standard policy and the premium collected under it is transferred to terrorism pool. The General Insurance Corporation Re manages the terrorism pool.

The policy insures against physical damage to the works, including materials on site. The other part of the policy covers the full reinstatement value of the works and other costs such as consultancy and professional fees that are incurred.

Source: Economic Times