Insurance excludes instruments, cars and drivers, already covered globally.
As India’s date with the Formula 1 Grand Prix approaches, JPSI, the organiser of the world’s biggest and fastest single-seater motor-racing tournament, has sought an insurance cover of $100 million (around Rs 490 crore) for the event.
JPSI or Jaypee Sports International Ltd is a subsidiary of Jaiprakash Ltd (JAL).
The total cover includes two policies: the first is a $15 million event cancellation policy mainly covering for loss of revenue on account of cancellation of the event due to reasons beyond the control of the organisers. HDFC Ergo is likely to underwrite this.
The second policy, to be provided by Reliance General Insurance Company, is a $85 million terrorism and third-party liability cover. Apart from any terrorist activity, it covers third-party liability risks like personal accident covers for ground crews, instruments of the organisers and property damages.
Roughly 70 per cent of the risk has been reinsured to global reinsurance majors. ACE Insurance Brokers Ltd advised on the reinsurance deal.
The total premiums were expected to be in the region of Rs 7-10 crore, said a source close to the development.
The General Insurance Corporation of India (GIC Re) was ceded 10 per cent of the risk. Twenty per cent of the risk would be retained by the insurers while the remaining would be reinsured by the global players,” the source added. GIC Re is the designated reinsurer in the country.
Since the instruments, cars and drivers are already covered under the annual global policy by respective team owners, the total coverage for the racing extravaganza is lower than other marquee sports events in India like the Indian Premier League (IPL) and the ICC Cricket World Cup 2011. While the World Cup 2011 took a cover of Rs 600 crore, the total sum insured for IPL-4 was around Rs 900 crore, which included a Rs 450 crore cover against terrorist attacks.
The maiden Formula 1 race in India is scheduled from October 28-30 at the Buddh International Circuit in Greater Noida near Delhi and Jaypee Group is the main sponsor of the event. The three-day event includes three practice sessions, one qualifying session and the final race. The 60-lap race will start at 3 pm on October 30 in the 120,000-capacity racing circuit.
Formula 1 is known for some exotic covers, especially for the leading drivers. For instance, last year, two-time Formula One World Champion, Ferrari driver Fernando Alonso, had his thumbs insured for nine million pounds (almost Rs 64 crore)!
Twelve participating teams would fly in 24 racing cars, engines, tyres and pares in separate jets. The other equipment includes radio sets, high-tech gadgets, TV equipment, computers, etc.
