Insurers burnt in 2011
Several property insurers in The Bahamas took another hit Friday after fire raged on Bay Street again.
One insurer is facing a potential $1.2 million claim.
Bruce Ferguson, president of FCII, Chartered Insurance Broker, told Guardian Business his company insured the building next to the destroyed Pompey Museum. Owned by Braphil Limited, he said it contained a few shops and was insured for $1.2 million.
“I don’t know if it’s a total loss or not,” Ferguson said Friday, adding that the company had a representative doing a preliminary assessment of the damage that morning.
“It’s certainly a blow for us, but that’s what insurance is for.”
Braphil’s building was one of several damaged or destroyed in the early morning blaze that claimed Pompey Museum and most of its artifacts. The building that contained the popular night club “The Balcony” was also destroyed. Other buildings nearby were damage.
This was the second major fire on Bay Street this year – the first occurred on St. Valentine’s Day. Friday’s fire demonstrates the risk insurers take on regarding Bay Street properties.
“Bay has always been regarded as a hazardous risk because of the close proximity of the buildings,” Ferguson said.
Many of the buildings downtown are old with no sprinkler systems installed, adding to the risk of fire. Insurance premiums reflect that risk, according to Ferguson.
Still, he said insurers put limits on their aggregate risk exposure in that area. They realize a single fire could leave them with numerous destroyed properties in their portfolios, he explained.
From a national perspective, the greatest loss was likely Pompey Museum, however. Unlike the government’s fleet of vehicles, its buildings are under no legal obligation to be insured. And, they’re not.
“The government does not insure its buildings,” said Donella Bodie, permanent secretary for the public service.
As a ‘self-insurer’, she said the government usually rebuilds after such losses, though Pompey’s treasures are irreplaceable.
“It’s so unfortunate with the artifacts,” Bodie said. “It’s a major loss for us.”
Property insurers have had a difficult 2011. Their bottom lines will be pressured by claims from the St. Valentines Day fire on Bay St. that destroyed Kelly’s Dock; damage resulting from Hurricane Irene; and other notable fires, including the blaze that destroyed the Automotive Industrial Distributors Ltd. (AID) building in New Providence and the recent fire in Freeport at the Cost Right building.
“It’s not a good year to be an insurer in The Bahamas,” said Timothy Ingraham, president of Summit Insurance, adding that many insurers are dealing with fire claims this year.