Shipments at cargo village believed fully insured

Compensation for the burnt cargos at the fire-ravaged cargo village of Hazrat Shahjalal International Airport (HSIA) is likely as consignments are believed fully insured, according to multiple insurance-industry sources.

Commerce Adviser Sk Bashir Uddin, who visited the site, told reporters that the export-cargo village remained safe, and that only goods stored in the import-cargo village were damaged in the fire.

Mr. Bashir, also in charge of the Ministry of Civil Aviation, said the extent of the losses and damages were not yet assessed, adding: "We are going to sit and assess the losses."

People familiar with the matter at several non-life insurance companies said most of the air cargos routed through the airport - including garment accessories, pharmaceutical raw materials, chemicals, small machinery and courier-service goods - are typically insured under marine-cargo-insurance policies.

"Air cargo is usually insured the same way as marine cargo, and in many cases, reinsured as well. Importers are likely to receive compensation for their losses," said Md. Khaled Mamun, CEO and Managing Director of Reliance Insurance PLC, after Saturday's big blaze at Bangladesh's prime airport.

He also said two types of surveys are typically conducted following such incidents-- one by the consignee and another by the insurance company-- to assess the extent of damage and process claims.

"It will take at least two weeks to complete a preliminary assessment of the total losses caused by the fire," he notes.

The fire, which erupted around 2:30pm

on the day, could not be fully brought under control until 9:30 pm, when this report was filed. Some 37 fire units were deployed to combat the fire--aided by

security personnel.

The extent of damage was not yet estimated, but industry insiders guessed the impact could be significant for apparel and pharmaceutical production as the goods are meant for current production.

"This is not fire insurance - it's marine insurance. All goods are brought under insurance coverage when importers open letters of credit (LCs)," said Md Imam Shaheen, Managing Director and CEO of Asia Insurance.

He also said that compensation

under marine -cargo insurance is usually processed faster than many other

types of claims. "Settlements could be completed within three months,"

he added.

A senior official at the state-run Sadharan Bima Corporation (SBC) also confirmed that the affected consignments were insured.

"There is re-insurance as well, depending on the volume of goods and values," the official told The Financial Express.

The cargo village at HSIA handles a significant volume of Bangladesh's export-import freight, particularly for the ready-made garment (RMG) sector and pharmaceutical raw materials.

jasimharoon@yahoo.com