Not a cent paid for business losses

Hundreds of business owners whose properties were damaged during the burning and looting in Port-of-Spain during the July 1990 attempted coup never got a cent in compensation from their insurance companies. Further, if July 27, 1990 happened again, it would be the same. No business that is damaged would be paid by insurers. It is the State’s responsibility to provide security for citizens. This was revealed by insurance consultant Bernard Aquing as he gave evidence before the Commission of Enquiry into the uprising at the Caribbean Court of Justice in Port-of-Spain yesterday.

The business and consumer face of the capital city changed after the bloody insurrection by Jamaat al Muslimeen rebels as traumatised storeowners either never recovered, migrated or moved to safer locations, Aquing said. There were some 300 insurance claims from affected business people amounting to an estimated $300 million, he said. The majority were for property damage.

 

This did not include businesses that were not insured, Aquing said. Insurance companies did not pay a cent to those who claimed on the grounds of a war exclusion law in the industry, Aquing said. The law states that insurance companies are not obligated to pay people who sustain losses in a war activity, he told the commission. An insurrection and a mutiny is included in the category of war activity. Aquing was general manager of local reinsurers Trinre, a partially-owned State company at the time, which paid part of the claims for insurance companies. He said if an insurance company had a claim to pay, local and international reinsurers working together paid part of it. Aquing said if the reinsurers had to pay in 1990, they would have had to pay five per cent of the losses business sustained, which amounted to $15 million. He said Trinre pleaded with international reinsurers—from Lloyds of London to Swiss Re and Munich Re—with no success. He was given the same answer. Insurance is not paid for losses sustained in a war activity. He said if Trinre paid insurers the $15 million, it would have had to pay out of its own resources and that would have endangered the company’s own solvency.

 

He said Justice Kangaloo in the High Court and Justices Margot Warner, Satnarine Sharma and Roger Hamel-Smith in the Court of Appeal also upheld the same law. “When you have these kinds of misadventures (like the uprising) these are the results,” Aquing told the commission. “That’s the reality...There’s no free lunch. “In the London Riots, the State had to pay for losses. “Insurance companies do not set out to cover events of this magnitude...The State has to provide security.”

“Because of trauma (from the coup) a number of businesses migrated. “Widespread looting caused them to move to other locations, like shopping malls outside of the city. “Some restarted elsewhere, but there were people who didn’t restart.” Commission lead counsel Avory Sinanan asked Aquing if an ex gratia payment could not be paid to businesses.

An insurance company may make an ex gratia payment to customers out of kindness and compassion. Aquing replied: “The days of paying a claimant ex gratia, begging and so on, is almost non-existent today. You must have a legal claim. “If July 27 happens again, it will have the same outcome,” he warned.