RIYADH, 13 November 2003 — The Al-Muhaya Compound, the target of Saturday’s terrorist attack, was not insured against terrorism and therefore the question of compensation does not arise.
Ahmad Al-Shalan, marketing manager of the National Company for Cooperative Insurance, the biggest insurance company in the Kingdom, told Arab News that the occupants of the compound who suffered bodily injuries or the next-of-kin of those who died as a result of the terrorist acts would not be indemnified.
He said the number of major public and private buildings in the Kingdom is estimated at more than 27,000 with the number of fires at 26,000 annually. However, the prohibitive cost of insurance against terrorism has deterred owners from seeking insurance cover. The only exceptions are some major buildings that have been insured against catastrophes covered by standard property insurance policies though the owners of small buildings believe that they are not vulnerable to such acts. Insurance sources point out that acts of terrorism are excluded from the standard property insurance policy in the Kingdom.
One of the factors preventing the insurance of buildings against terrorism, besides the high cost, is the fact that they had taken security for granted. “The Property Insurance Policy issued by NCCI indemnifies the insured against loss or damage resulting from fire or lightning as well as many additional perils such as explosion, impact of aircraft and vehicles involved in accidents, earthquakes, storm, flood, bursting of pipes and disturbances.”
Al-Shalan said the additional coverage of this insurance includes debris removal expenses, loss of rent, costs of architect and consultants during the process of property repairing or replacement and fire-fighting expense.
He said property insurance ranked third in the insurance market after motor and medical insurance.
Gross premiums written reached SR474.6 million in 2001 as against SR234 million in 1991, achieving a growth rate of 102.8 percent during the last 10 years.
