Red Fort blast raises big question — Does your insurance cover terror acts and related damages?
The Red Fort car blast in Delhi has exposed a critical gap in India’s financial protection framework — terrorism coverage. While the attack is under investigation, the event has revived discussion on whether existing insurance policies offer real security against such threats. Experts warn that most Indians remain unaware that terrorism cover is often an optional add-on, not an automatic benefit.
- Nov 11, 2025,
- Updated Nov 11, 2025 5:42 PM IST
The Red Fort car explosion in Delhi, which claimed 12 lives and injured more than twenty people, has reignited a crucial debate: are Indians financially protected against terrorist attacks? As the investigation unfolds under India’s anti-terror laws, the tragedy has exposed a blind spot in personal and business risk protection: the lack of terrorism coverage in standard insurance policies.
While terrorist incidents are rare, their consequences are devastating — destroying property, vehicles, and livelihoods overnight. Industry experts emphasise that many policyholders mistakenly believe that all insurance plans automatically cover terrorism, when in reality, such coverage is usually an optional add-on available at an additional premium.
“In life insurance, claims arising from acts of terrorism are generally paid unless specifically excluded. However, in general insurance, terrorism protection is not part of the base cover and must be added separately,” said Atri Chakraborty, COO, IndiaFirst Life Insurance.
According to Casparus J.H. Kromhout, MD & CEO, Shriram Life Insurance, “Term or savings plans generally cover all causes of death, except suicide in the first policy year. There’s no separate ‘terrorism cover’ under life insurance. However, riders like accident or critical illness benefits do not apply if death results from terrorism.”
Terrorism protection has also begun finding its way into health insurance. Paramdeep Singh, founder of LongTail Ventures, noted, “Over 85% of new retail health insurance policies now automatically include terrorism cover, though many older or corporate group plans still exclude it. Always check the ‘Exclusions’ section — if terrorism is not listed as excluded, you’re already covered.”
Adding to the discussion, Shashi Kant Dahuja, Executive Director & Chief Underwriting Officer at Shriram General Insurance, explained:
“A terrorism cover protects the insured, their vehicle, property, or business from damage caused by an act of terrorism. It ensures policyholders can recover financially from unforeseen events involving terror-related loss.”
He further clarified that in India, terrorism is not included by default. “It’s available as an optional add-on, which customers can select by paying an extra premium. To confirm if your policy includes this coverage, check the policy wording — terrorism cover is listed under ‘Add-on Covers’ or ‘Extensions’. Alternatively, contact your insurer or agent for clarification,” Dahuja added.
Experts unanimously agree that understanding your policy details is essential. Every insurance document contains an “exceptions” or “exclusions” section — often overlooked — where terrorism coverage status is clearly stated. Consumers must proactively verify whether they are protected and, if necessary, purchase an endorsement to bridge the gap.
For businesses
To address the major gap in terrorism-related insurance coverage that emerged after global reinsurers stopped offering such protection post-9/11, India set up the Indian Market Terrorism Risk Insurance Pool (IMTRIP) in 2002. Operated by GIC Re, the pool allows all non-life insurance companies in the country to jointly underwrite and distribute terrorism risk. In FY 2023–24, IMTRIP collected premiums of Rs 1,654.63 crore and paid out Rs 3.12 crore in claims. The pool covers losses of up to Rs 2,000 crore at any one site; for higher protection, policyholders must purchase a separate terrorism insurance policy.
Such add-ons typically cover physical loss or damage caused directly by terrorist acts — including explosions, arson, or destruction of insured property. For businesses, the policy can also include business interruption cover, compensating for lost income during forced shutdowns after such incidents.
In the aftermath of the Red Fort tragedy, insurers and policyholders alike are reminded that financial resilience depends not just on having a policy, but on having the right one. Terrorism cover may seem like a minor add-on, but in an unpredictable world, it can be the deciding factor between recovery and financial ruin.
As India strengthens its risk management frameworks, the message from experts is clear — terrorism insurance is no longer optional; it’s essential.
The Red Fort car explosion in Delhi, which claimed 12 lives and injured more than twenty people, has reignited a crucial debate: are Indians financially protected against terrorist attacks? As the investigation unfolds under India’s anti-terror laws, the tragedy has exposed a blind spot in personal and business risk protection: the lack of terrorism coverage in standard insurance policies.
While terrorist incidents are rare, their consequences are devastating — destroying property, vehicles, and livelihoods overnight. Industry experts emphasise that many policyholders mistakenly believe that all insurance plans automatically cover terrorism, when in reality, such coverage is usually an optional add-on available at an additional premium.
“In life insurance, claims arising from acts of terrorism are generally paid unless specifically excluded. However, in general insurance, terrorism protection is not part of the base cover and must be added separately,” said Atri Chakraborty, COO, IndiaFirst Life Insurance.
According to Casparus J.H. Kromhout, MD & CEO, Shriram Life Insurance, “Term or savings plans generally cover all causes of death, except suicide in the first policy year. There’s no separate ‘terrorism cover’ under life insurance. However, riders like accident or critical illness benefits do not apply if death results from terrorism.”
Terrorism protection has also begun finding its way into health insurance. Paramdeep Singh, founder of LongTail Ventures, noted, “Over 85% of new retail health insurance policies now automatically include terrorism cover, though many older or corporate group plans still exclude it. Always check the ‘Exclusions’ section — if terrorism is not listed as excluded, you’re already covered.”
Adding to the discussion, Shashi Kant Dahuja, Executive Director & Chief Underwriting Officer at Shriram General Insurance, explained:
“A terrorism cover protects the insured, their vehicle, property, or business from damage caused by an act of terrorism. It ensures policyholders can recover financially from unforeseen events involving terror-related loss.”
He further clarified that in India, terrorism is not included by default. “It’s available as an optional add-on, which customers can select by paying an extra premium. To confirm if your policy includes this coverage, check the policy wording — terrorism cover is listed under ‘Add-on Covers’ or ‘Extensions’. Alternatively, contact your insurer or agent for clarification,” Dahuja added.
Experts unanimously agree that understanding your policy details is essential. Every insurance document contains an “exceptions” or “exclusions” section — often overlooked — where terrorism coverage status is clearly stated. Consumers must proactively verify whether they are protected and, if necessary, purchase an endorsement to bridge the gap.
For businesses
To address the major gap in terrorism-related insurance coverage that emerged after global reinsurers stopped offering such protection post-9/11, India set up the Indian Market Terrorism Risk Insurance Pool (IMTRIP) in 2002. Operated by GIC Re, the pool allows all non-life insurance companies in the country to jointly underwrite and distribute terrorism risk. In FY 2023–24, IMTRIP collected premiums of Rs 1,654.63 crore and paid out Rs 3.12 crore in claims. The pool covers losses of up to Rs 2,000 crore at any one site; for higher protection, policyholders must purchase a separate terrorism insurance policy.
Such add-ons typically cover physical loss or damage caused directly by terrorist acts — including explosions, arson, or destruction of insured property. For businesses, the policy can also include business interruption cover, compensating for lost income during forced shutdowns after such incidents.
In the aftermath of the Red Fort tragedy, insurers and policyholders alike are reminded that financial resilience depends not just on having a policy, but on having the right one. Terrorism cover may seem like a minor add-on, but in an unpredictable world, it can be the deciding factor between recovery and financial ruin.
As India strengthens its risk management frameworks, the message from experts is clear — terrorism insurance is no longer optional; it’s essential.