RI fire cover the world's priciest

RI fire cover the world's priciest

JAKARTA (JP): Fire insurance coverage in Indonesia is higher than in any other country due to the inadequate fire safety systems in most buildings.

The president director of New Zealand Insurance Indonesia, Ian W. Harland, said yesterday that fire insurance premiums in Indonesia are three times higher than anywhere else because the risk is higher.

He said most of buildings in Indonesia are not equipped with appropriate fire safety devices and that water supplies are generally insufficient. Internal hydrant systems and water sprinklers also do not function properly.

"These are the aspects often found in most of the buildings in Indonesia. As a result the fire brigades fail to put out fires swiftly," Harland said after paying an insurance claim filed by the Hero Group for its Bogor Internusa outlet, which was razed by fire on Feb. 29. Fire fighters needed 10 fire engines and more than 12 hours to put out the fire.

Police believe the fire was caused by an electrical short circuit in one of the shops. Material losses inflicted by the fire have been estimated at Rp 10 billion (US$4.5 million).

Neither New Zealand Insurance or Hero would reveal the amount of the insurance claim.

A failure to enforce regulations is responsible for the lack of fire safety devices, Harland said.

"There is a law which stipulates that a building should provide the facilities but it is not effectively enforced," he said.

Harland added that electrical wiring in most shopping centers is not properly installed.

"This is a serious problem because fire is not only dangerous to human life but also economic activity," he said, adding that the material losses suffered by Hero could have been invested in a new outlet.

Harland urged tenants to consider safety aspects when choosing a building and to consult experts if necessary.

Hero Group director Anton Lukmanto said that his company usually equips its outlets with fire safety systems and trains its personnel to use them.

"We always check the building systems and add other devices in places like stock rooms. But fires can happen at any time," he said.

When asked why retail companies keep renting unsafe buildings, Harland said that they do not have a choice because the buildings are located in strategic areas.

Anton said location is the most important thing for the group, which has 62 outlets in Indonesia.

"We always put location first when deciding on a new outlet location," he said. (yns)