Despite the massive losses caused by a recent fire at the Cargo Village of Hazrat Shahjalal International Airport, officials have confirmed that the insurance coverage for the facility is only 2 million taka. As a result, the actual compensation for the fire damage will be limited to this amount. The Civil Aviation Authority of Bangladesh (CAAB), which owns and operates the Cargo Village, can claim a maximum of 2 million taka in insurance.
Insurance Status of Import-Export Goods
Officials stated that imported goods destroyed in the fire are usually insured by the importers in the supplier’s country abroad. In contrast, there is no mandatory insurance for exported goods in Bangladesh. Therefore, insurance claims for the destroyed imported goods at Shahjalal Cargo Village will need to be processed through foreign insurance companies.
Explanation from Insurance Authorities and IDRA
The Insurance Development and Regulatory Authority (IDRA) has stated that it will soon issue letters to local insurance companies to determine whether any policy was issued for the Cargo Village and the total amount of claims. IDRA will also instruct insurers to settle valid claims as quickly as possible.
S.M. Shah Alam, General Manager of the state-owned General Insurance Corporation (GIC), confirmed that only a small portion of the Cargo Village was insured, with coverage of just 2 million taka. He added that typically, fire insurance requires verification of the insured facility’s safety measures. However, due to the lack of legal requirements in Bangladesh, GIC had never inspected CAAB’s warehouse safety measures before issuing the policy.
Massive Losses
At a press conference, Mohammad Hatem, President of the Exporters Association of Bangladesh (EAB), stated that exporters suffered losses of nearly 12 billion taka due to the fire. Zakir Hossain, General Secretary of the Bangladesh Pharmaceutical Industry Association, reported that raw materials worth 200 million taka from 32 pharmaceutical companies were completely destroyed.
Operations of Cargo Village
The Cargo Village functions as an integrated hub for managing import and export goods. It handles unloading and loading, inspection, packaging, storage, and customs clearance. Perishable items like fruits and vegetables are released within 24–48 hours, while ready-made garments are usually exported within 2–3 days.
Conclusion
Due to limited cargo space, exports can be delayed, and the recent fire destroyed a substantial amount of imported goods. While the financial loss runs into billions of taka, the insurance coverage of only 2 million taka means actual compensation will be significantly limited.
— Khabarwala / M.A.Z.