The March 26 bomb blast that ripped through the Sid el Bouchrieh industrial district destroyed at least six furniture manufacturers and reduced an already struggling business zone to a row of burnt out shells and rubble. By mid-April, one of the main thoroughfares was still blocked, as soldiers in yellow plastic helmets erected scaffolding to begin the rebuilding of the area.
In and around Beirut, three other blasts occurred, that, while small by comparison to the explosion that killed former prime minister Rafic Hariri, hit both small businesses and individuals hard, causing damage worth an estimated $10 million.
The explosions highlighted not only the fact that war and terrorism related damage generally fall outside insurance coverage, but also shows that while Lebanese business owners generally have health and accident insurances, many are reluctant to buy fire and property packages. According to expert estimates some 50% of Lebanese businesses, especially those small and medium-sized, are insured.
Part of the municipality of New Jdeideh, the Sid el Bouchrieh industrial zone covers some 8 km2 and is home to dozens of car mechanics, garages, metal and wood workers. Most companies are small family businesses that employ three to ten people, yet there are a few larger companies, most notably the Gemayel and Arab Printing Presses, each employing more than 25 staff.
Sami Debs, owner of Sim Kitchens, situated on the top floor of the building adjacent to the explosion in Sid el Bouchrieh held up a clock. “Look,” he said, pointing to the hands frozen at 9.20. “This is the time the bomb exploded. The fire didn’t reach the third floor. Most of my damage is from the shock of the blast, smoke and flooding.”
Sim Kitchens has no windows, the iron door has been blown off its hinges and his machines are warped by the blast. Debs estimates his damage to be around $50,000.
On the first and second floors of the building the situation is worse. Arguably hardest hit was Massoud Furniture. It is a world painted pitch black. Material, furniture and machines have been burnt to the ground. To make matters worse, George Massoud had just finished an order awaiting shipment. It was all burnt and Massoud estimates total damages to be at least $300,000. On the second floor, Sauma Furniture lost a significant quantity of material as well as most of the machines, with damage totaling some $250,000.
Both Massoud and Sauma were insured against fire but were ineligible for compensation as the damage fell under the war and terrorism category. In fact, the Phoenicia InterContinental Hotel was probably the only Lebanese business to have an insurance policy that covered a terror attack.
Debs was only able to afford personal accident insurance for his business but is aware that even if he could have afforded the extra cover, it would not have saved him. “I have two types of insurance against accidents, for which I pay some $900 a year. I don’t have theft insurance, because there’s simply nothing to steal and I don’t have a fire insurance, because it’s too expensive as I would have to pay an annual 2% of total value of my assets.”
Debs and his brother, who founded the company in 1982, are no strangers to violence. By the end 1980s it had already been bombed in the Aoun-Geagea war. Today, despite a bullish period in the 90s, the business is struggling once again. “If I make as a chair for $40, the Syrians do it for $20. Their labor is cheaper and they use Russian instead of Italian wood.”
The total cost to the area has been estimated at roughly $3 million. Saudi Prince Waleed bin Talal has already pledged $2.5 million while Blom Bank has donated $1 million. (see page ?) Even though this should cover the damage with some to spare, many remain unconvinced about the transparency of any disbursement. “We’ll see what we get and if no one fills his pockets,” said one owner.
A week earlier, on March 19, New Jdeideh, located a few kilometers north from Sid el Bouchrieh, suffered the first in the spate of bomb attacks. Hidden under a parked car, the bomb ripped through the area’s main shopping street, damaging an apartment block and dozens of cars. Eleven people were injured.
Owner, civil engineer Joseph Najm, is currently restoring the apartment block. He too was insured but not covered for terror outrages. “The municipality promised to pay $25,000 to help repair the concrete structure,” he said. “However, the total damage is will come to $150,000, which I will have to pay, as the people in the building are my tenants.”
Maroun Latouf, owner of a car rental company situated on the parking lot where the bomb was planted, is also out of pocket, also to the tune of $150,000. As in the case of Sid el Bouchrieh, it was the army that estimated damages and collected claims, and, according to Najm, the government has promised to reimburse part of the losses, based on the data collected. In an attempt to unravel the bureaucratic paper trail and ascertain why the army was handling claims, EXECUTIVE contact the Ministry of Defense but no one was available for comment
While Najm and Latouf suffered the biggest losses in the area, a large number of inhabitants and shopkeepers were hit with smaller bills. “We had to pay some $600 just to replace the window,” said the Tony G, owner of a men’s fashion store, who recalled the night of the blast
“We live above the shop,” he said. “Me and my wife woke up under kilos of glass, as the bed was in front of the window. Fortunately we suffered only minor injuries, but of course the windows had to be replaced, the bed was broken and we have a huge crack in the wall. All in all I paid some $4,000 and neither municipality nor the insurance is paying for that.”
Again, Tony G’s “regular” insurance did not cover these extraordinary attacks but a week after the attack however, an insurance broker went from door to door in New Jdeideh’s high street asking if retailers would be interested in an insurance covering bomb attacks in future.
“But that was very expensive,” Tony G said. “You had too insure everything separately. So, if you have the glass insured, the glass would be covered, but nothing that got damaged by falling glass. Only for the clothes we had to pay 2% a year over the total value of the collection. So, if you’d insure everything you end up paying some $10,000 a year, just in case a bomb may explode. We cannot pay that kind of money.”
The situation is similar in Kaslik and Broumana. On March 23, a bomb explosion hit the up market Altavista shopping center in the heart of Kaslik killing 3 immigrant workers, damaging shops, a bank and insurance company. The center itself is currently being refurbished. Total damages in and around the center amount to an estimated $1,5 million. The municipality has promised to pay for the clear-up operation, while the army once again moved in to estimate damages and collect claims.
One of the most severely damaged shops is Ets Nahkle fashion for men. “I had just expanded by taking over the shop next door,” said storeowner Hani Dagher. “I invested some $300,000 in the new interior, an estimated 70% of which is gone.” Dagher also lost a storage room inside the center. “I was insured,” said Dagher who also has stores in Hamra, downtown Beirut and Broumana, “but I didn’t even bother to hand in a claim. I know they wouldn’t pay this time.”
