Sea change: JNPT sets sail to guard against liabilities
Kolkata-based National Insurance Company (NIC) has sold a Rs 7,000-crore mega policy for covering Jawaharlal Nehru Port Trust’s (JNPT) facilities and equipment against damages and unforeseen liabilities for the fiscal ’06-07.
By Debjoy Sengupta, TNN |
KOLKATA: Kolkata-based National Insurance Company (NIC) has sold a Rs 7,000-crore mega policy for covering Jawaharlal Nehru Port Trust’s (JNPT) facilities and equipment against damages and unforeseen liabilities for the fiscal ’06-07.
“This is for the first time that a major port authority has bought a comprehensive cover in recent times. It will shield the JNPT against losses incurred due to business interruptions arising out of unforeseen events at the port and its
facilities. The policy will provide the hedge against any such loss of assets and liabilities,” DK Burman, director and general manager, NIC, told ET.
The decision to opt for a mega cover had largely been competition-driven, said JNPT officials. “Our competitors at the Nhava Sheva International Container Terminal (NSICT) and Gateway Terminals India have bought a cover that insures users against accident liabilities at their terminals. We wanted to match it at our port.... hence, the cover,” they explained.
The Indian Ports Association (IPA) had also advised the JNPT in favour of taking a comprehensive cover so that liabilities to port users as a result of accidents and mishaps could be taken care of. The IPA is a body constituted by representatives of major Indian ports with the objective of developing and increasing efficiency and productivity.
“The necessity of the cover also stems from the fact that facilities and equipment at the port need to be guarded against losses resulting from natural catastrophes like Tsunami. Natural calamities often result in vessels getting stuck at the port resulting in commercial losses. The policy will take care of these losses,” maintained officials.
The JNPT has opted for the cover on an experimental basis and would renew it only if it finds that services rendered by NIC are satisfactory. However, this is not the first time that the JNPT has bought an insurance policy. The port authority covered itself with a fire insurance policy way back in 1998.
This was done more to make itself eligible for a World Bank loan, than to actually guard itself against unforeseen liabilities. “Insurance was one of the eligibility criteria for the World Bank loan. At a later stage, we created an insurance fund to take care of losses and discontinued the policy many years ago,” said JNPT officials.
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