News Middle East11 Aug 2020

Lebanon:Insurers' association estimates up to 30% of blast losses are insured

| 11 Aug 2020

The Association of Insurance Companies in Lebanon (ACAL) has said that about 70% of the damages resulting from the 4 August devastating explosion in the Beirut port are not covered by insurance.

According to ACAL's preliminary estimates, the value of insured damages may exceed $2bn, or about 30% of the total damages resulting from the blast that range between $5bn and $10bn, reported Al Roeya.

An investigation is being carried out into the cause of the blast. Insurance compensation is linked to the cause: if the blast was a result of a terrorist or war action, compensation from insurers will be limited to those who hold terrorism, political risk or war damages cover.

Impact

Mr Elie Tarabay, president of ACAL, stated in a telephone interview with Al-Roeya, that the impact of the blast on the marine insurance sector is limited compared to its impact on the property insurance sector, including real estate and cars, over a radius of several kilometres. The estimate is that ship and cargo losses could reach about $200m.

He pointed out that the port of Beirut has two parts, "a new area intended for new ships and still receiving ships and an old zone which is completely destroyed".

It is believed that the explosion occurred because 2,750 tons of ammonium nitrate, stored insecurely in a warehouse in the port area, blew up.

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