MUMBAI Dec 23 The Mumbai attack sounded a
wake-up call to Indian hotels and businesses over security and
terror insurance, security experts said, but an economic
slowdown and a tradition of penny-pinching could hinder
Risk management has become a major priority after the Nov.
26-29 Mumbai attacks, which killed 179 people and have been
blamed on Pakistan-based militants, said Raghu Raman, chief
executive of security firm Mahindra Special Services
"Until now security was a poor second cousin to everything
else," said Raman, a former army officer.
"But now, companies are making it a bigger priority and are
conscious that they need to allocate more time and money to
The Taj Mahal and Trident hotels, which were among 10
Mumbai sites hit in the attack, have tapped international
security services firms like Israel's Ares Group which have
come rushing to set up offices in India.
Taj Hotels says it has implemented initial measures such
scanners, vetting of employees and suppliers, and is deploying
armed men in plain clothes at some of its properties.
"We all recognise it's a very different world in which we
live," said R.K. Krishna Kumar, vice chairman of the Tata
Group, which owns the Taj Hotels. "I believe this is a turning
point for how the hotel industry views security."
With angry rhetoric increasing between India and Pakistan,
security has been tightened at hotels, airports, malls,
cinemas, office blocks and apartments across India.
But while 5,000-odd private security firms are seeing
greater interest, only a handful can provide specialist
services, said Ratan Shrivastava, a defence analyst at Frost &
"Corporate India is only now waking up to the need for
going beyond checking bags and vehicles, because we are facing
a different kind of aggressor, a different environment," he
The Ares-APS venture, for example, provides psychological
profiling, maritime security and counter-terrorism training by
former armed forces officers and intelligence experts.
Most companies though, are simply buying cheap metal
detectors and don't have a proper plan because they just want
to be seen to be doing more mainly to reassure workers, Raman
"Plus, the economic slowdown makes it harder," he said.
"Even if you want to focus on security, you may not have the
Such constraints could also stop companies choosing terror
insurance, which is typically an added provision to standard
fire policies, said Radhakrishna Chamarty, director of India
Insure Risk Management & Insurance Broking Services.
India's general insurance companies are all allied to a
common pool for terrorism insurance, set up in 2001, with
premiums collected in and claims settled from the pool.
While large companies had opted for the coverage, smaller
firms held back because attacks in recent years have mostly
been in public places such as railway stations and markets.
Now, even smaller companies are keen, Chamarty said, but
all businesses still view insurance as an expense that can be
"The discussion doesn't centre on risk management," he
"It's still about price and they negotiate to the last
bone, especially now, when they are keen to reduce premium
(Editing by Paul Tait and Sugita Katyal)