As May's violence may not be the last, all businesses should get all kinds of insurance coverage not only for physical damage from terrorism, but for business interruption, a British political-insurance specialist advised yesterday.
"There are high concerns that political unrest can happen again and that will mean an expensive budget for covering the losses. To gain certainty, businesses in Thailand should have insurance to ensure that they will not suffer from physical or non-physical damage that may occur," said Stephen Ashwell, the global head for terrorism at Hiscox Ltd.
In the past, terrorism insurance may not have been necessary in Thailand, but now it is essential, as anything can happen because of political uncertainty, he told a seminar on "Political Violence Insurance" organised by Navakij Insurance.
The insurance rate for terrorism in Thailand is high since May's riots because of significant losses, he said. Companies spend an average of US$25 million (Bt800 million) to ensure risk coverage. They may spend a maximum rate of $250 million, for bigger business relies on their profiles.
Each enterprise should consider its type of business, location and neighbourhood as factors in deciding whether to buy this type of insurance.
Not only large companies should buy the insurance, but also small and medium-sized enterprises, as they may face huge losses from being in a high-risk area, he said.
In Thailand, businesses that are being advised to purchase this insurance include banks, retailers, hotels and cinemas.
Various types of businesses buy this kind of insurance worldwide. The biggest group is real estate at 15 per cent, followed by industrial/manufacturing at 11 per cent, power/utility 10 per cent, retail 9 per cent, chemical/pharmaceutical 6 per cent, and 5 per cent each for construction, hotels and telecommunication.
Pitiphong Bisalputra, president of Navakij Insurance, said more businesses had shown keen interest in taking out a terrorism policy during the past few months after the turmoil in Bangkok.
To ensure that not only large enterprises can purchase this kind of insurance, the company is considering issuing a new policy that SMEs can afford to help protect their business from political violence, he said.