Published on: 4/08/2021
Most insurance companies in Lebanon are still refusing to compensate those affected by the Beirut port blast, which hit the city a year ago, saying they are waiting for the results of an investigation into the disaster which has faced numerous political hurdles.
Lebanese economic expert Maurice Matta told The New Arab's sister site, Al-Araby Al-Jadeed, that the issue of compensation is broken up into two parts.
"The first is related to the aid provided by the Lebanese government through the Lebanese army, according to the field survey it conducted which was limited to (damaged) homes only, without including cars," Matta explained. Compensation of 150 billion Lebanese pounds was also distributed in two phases.
The second part relates to "insurance requirements, i.e. insurance contracts. The cost of direct and indirect losses of the Beirut port explosion were estimated at around 15 billion and 250 million US dollars in insured assets", he said.
Matta said that Lebanese insurance companies have contracts and reinsurance agreements with global partners that cover accidents and damages "provided that the cause of the explosion is known".
The economic expert went on to explain that reinsurers outside Lebanon have so far refused to cover the contracts for Lebanese companies until a final report on the causes of the 4 August 2020 explosion is released. This is because the insurance does not cover terrorist, military or sabotage acts, only accidents.
However, some companies have started compensating a large percentage of insurance contract holders, Matta said, part of which is "fresh US dollars" and the other in bank checks.
This process, he explained, included only particular contracts and small costs, under $50,000.
Matta said a major problem that the Lebanese companies face with their reinsurers is their obligation to pay the compensation money back if it turns out the explosion was caused by an act of sabotage, terrorism, or military event.
Lebanese caretaker Economy Minister Raoul Nehme had previously asked the judicial investigator looking into the port explosion, Judge Tariq Al-Bitar, as well as caretaker Justice Minister Marie-Claude Najm, to issue an official report, removing the probability of terrorist or military acts from the possible causes.
This move - which angered the families of victims who demand the true reason of the blast to be uncovered and considered Nehme’s request a blatant interference in the investigations - was intended to allow the economy ministry to issue appropriate instructions to insurance companies to pay monies to customers.
In comments made to Al-Araby Al-Jadeed, head of the General Labour Union, Beshara Al-Asmar, spoke of the negative implications the delay in compensation had on those affected.
This has "delayed economic recovery, especially in Mar Mikhael and Gemmayzeh in the capital Beirut, where the greatest damage occurred", he said, referring to the city's popular nightlife hubs.
"The owners of tourist establishments, shops, and businesses had to individually cover the costs if they wanted to reopen their doors to customers again."
Asmar said that lawsuits filed against the port's authority - blaming it for the explosion - led to the facility's funds being seized, which has prevented it from carrying out much-needed repairs.
An example of these repairs are the cranes, which although largely unaffected by the blast, are still only operating at a capacity of six out 16.
The union head added that banks were withholding funds for companies that operate in US dollars, meaning that these firms were unable to access their money and make the needed changes at the port.
Over 200 people died and over 6,000 were wounded when tonnes of ammonium nitrate - unsafely stored at the port for around six years - blew up, after allegedly catching fire. The causes of the initial fire are still being investigated, but authorities have been accused of gross negligence.
Source: The NewArab