Bangalore cafe blast and terrorism insurance coverage

Does the recent Bangalore cafe blast incident fall within the purview of terrorism coverage under property insurance?

The investigation is being conducted by National Investigative Agency (NIA) which is mandated to investigate terrorism incidents. Criminal case has been registered under Unlawful Activities Prevention Act (UAPA) which deals with acts of terrorism.

Are the above two aspects sufficient to establish coverage under terrorism endorsement of the policy?

Technically, no.

Terrorism is defined under the policy as under:

“For the purpose of this cover, an act of terrorism means an act or series of acts, including but not limited to the use of force or violence and/or the threat thereof, of any person or group(s) of persons, whether acting alone or on behalf of or in connection with any organization (s) or government(s), or unlawful associations, recognized under unlawful Activities (Prevention) Amendment Act, 2008 or any other related and applicable national or state legislation formulated to combat unlawful and terrorist activities in the nation for the time being in force, committed for political, religious, ideological or similar purposes including the intention to influence any government and/or to put the public or any section of the public in fear for such purposes.”

The motive as per the above wording says the act shall be committed for political, religious, ideological, or similar purposes. There should also be an intention to influence any government and/or to put the public or any section of the public in fear for such purposes.

Unless the above bar is met, the incident does not become terrorism.

Assume that the guy who planted the bomb did it for recreational purposes as he was probably bored and wanted some action.

Does the incident become an act of terrorism? No, because there is no motive established for political, religious or ideological purpose, intent to influence the government and insert fear into people’s minds. The act becomes one of vandalism, not terrorism.

Not just terrorism, wherever there is human element coverage under an insurance policy, such as riot, strike, malicious damage, theft, burglary, involuntary or forced dispossession, employee dishonesty, embezzlement, etc., the establishment of a motive is important for settling the claim. That can often make the claim settlement arduous.



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