Insurance broker Trinity Group, which has to arrange for insurance cover of the CWG, said that the reinsurer Llyod's Syndicate yesterday withdrew from covering any losses arising out of a terror attack during the Games.
"The reinsurer withdrew the terror cover to the Games. Right now there is no event-cancellation cover due to natural calamity, as we will have to renegotiate terms with the reinsurer to work out a new policy," Trinity Group Vice Chairman Akhilesh Jain said.
The withdrawal came a day after terror strike on Taiwanese media person near Jama Masjid. Terror groups claiming to be behind the attack have also threatened to disrupt the Games.
The CWG Organising Committee had sought a hefty insurance cover of about Rs 750 crore in the event of cancellation of the sporting extravaganza.
The insurance cover would have compensated for any loss arising from cancellation due to a natural calamity, like earthquake, floods or riot, and terror attacks.
Of all the four PSU general insurers, Oriental Insurance Company was the lowest bidder for providing the insurance cover to the CWG.
An event of such a magnitude requires a reinsurance firm to support the insurance company. The CWG organising committee was to pay a premium of Rs 26 crore for the insurance cover, which is much higher than the amount that was charged for many other mega sporting events in the country.
According to industry sources, increased uncertainty surrounding the CWG was the main reason for such a high insurance premium.
The premium cover of Rs 26 crore, which was to be paid by the OC of the CWG was higher than other games as there was a lot of uncertainty surrounding the event.
The Board of Control of Cricket in India had paid a premium of over Rs 1 crore to get a cancellation cover of Rs 250 crore for Champion's League T 20 tournament. Also for Indian Premier League 3, the board paid about Rs 4 crore for a sum assured of Rs 480 crore.
This cancellation cover is apart from the Rs 500 crore insurance cover already finalised by the OC for athletes, CWG staff and technical officials, spectators and volunteers during the Games.
The comprehensive cover is expected to insure about 9,000 people, including athletes, Games staff and officials.