TRAGEDY WON'T PROMPT MAJOR CLAIMS

LONDON -- The terrorist shooting last week in Egypt that killed 57 tourists is unlikely to result in any significant insurance claims.

Most tour companies will have to absorb the costs of canceled vacations and bringing tourists back from Egypt. A few companies had purchased special liability insurance.

It also is unlikely that political risk coverage for foreign businesses trading with or having units in Egypt will come into play, unless terrorism escalated to a point where countries advised businesspeople to leave.

The Assn. of British Insurers says that in Britain, a tour operator's standard liability policy would not cover costs associated with incidents such as that of Nov. 17, when Islamic fundamentalists attacked tourists at the Temple of Queen Hatshepsut near Luxor.

Although additional coverage is available that would give such protection, an ABI spokesman was unable to say how many tour operators buy such additional coverage.

Most insurance policies also specifically exclude liability for losses from war and acts of terrorism.

A spokesman for the Assn. of British Travel Agents said personal travel insurance people commonly take out to cover such matters as a vacation the traveler was forced to cancel, medical costs or lost items, would not normally pay out in cases such as this. He said the costs would fall on the tour operators, and it is up to them whether they choose to buy additional cover that could help meet these costs.

Sarah Joannides, marketing manager at London-based Home & Overseas Travel Insurance, agreed that most personal travel policies would not be obliged to pay compensation in such a terrorist incident, though Home & Overseas is paying medical costs for its policyholders affected by the Luxor attack.

In 1990, the European Community passed a Directive on Package Travel, Package Holidays and Package Tours. It made tour operators more strictly liable for clients' welfare. However, the directive also states that they will not be held liable in cases of force majeure, which it defines as "unusual or unforeseeable circumstances beyond the control of the party by whom it is pleaded, the consequences of which could not have been avoided even if all due care had been exercised."

It is also unlikely that the recent attack will result in payment under commercial political risk policies.

Anthony Palmer, marketing director at Lloyd's of London brokers Berry Palmer & Lyle Ltd., said, "However tragic it was, we don't see this incident as having any immediate impact on the risks we're involved with."

He said this would be different if the U.K. or the U.S. governments had advised nationals to leave Egypt, whereas so far they are advising only that tourists not visit the Luxor area. Mr. Palmer said he does not foresee governments having to take the more dramatic action.

However, as Mr. Palmer acknowledged, more such acts of terrorism could have devastating effects on Egypt's important tourist industry and thus on its economy.

Most operators of tours to Egypt were quick to get tourists out of Egypt after the attack. Most also canceled their scheduled tours of Egypt for at least the next few weeks until the security situation becomes clearer.

Until now, 34 foreigners had been killed since 1992, during the terror campaign, designed to force President Mubarak to accept the Islamic code of Sharia. The worst previous attack was in April 1996, when 18 Greek tourists, who had been mistaken for Israelis, were killed near the Pyramids of Giza.

The Nov. 17 attack coincided with the opening of the trial in Egypt of 66 men charged with plotting to kill state officials and with belonging to the militant Gamaa al-Islamiya group.