The Chief Executive Officer of Africa Sureties and Insurance Advisory Company (ASIAC), Mr. Solomon Lartey, has said that “meeting its obligations following the Apiatse disaster should not be difficult for Maxam, especially in the wake of the claim that the company is not in breach of any of its safety obligations in Ghana. If this is the case, then Maxam should be able to claim from its insurers”.
Mr. Lartey said the possibility for Maxam to claim from insurers depends on a number of factors: such as whether they have the right kind of insurance policy in place (both locally and internationally) with rated reinsurance support, and whether they are not in breach of any terms, conditions or warranties under such policies. The scope of cover for such policies as well as cover limits will also determine whether they can claim at all; and by how much if their policies attach.
Mr. Lartey said a couple of possibilities may be available to the company so far as insurance is concerned. First is a possible claim under their motor insurance policy. The standard commercial motor insurance policy may exclude the transportation of dangerous goods, unless such transportation is in compliance with the Ghanaian Code for the Transport of Dangerous Goods by Road or Rail.
Globally, there are various codes governing the transportation of dangerous goods by sea, air, road, rail and inland water-bodies covering areas such as: terminology, packaging, labelling, placarding, markings, storage, segregation, handling and emergency response etc.
If we hold the assumption that Maxam by virtue of their stature had been compliant, then they may make a possible claim under their motor policy. I am sure the third-party liability limit under such a policy may not exceed GH¢50,000 – possibly plus an umbrella liability limit of GH¢1,000,000 or possibly GH¢2,000,000.
Again, if the accident was caused by a third party, say a motor rider, I bet the liability limit under that third party cover (if at all insured would not be more than GH¢10,000).
“Please bear in mind that I have not seen the actual policy issued, I am only giving you an insurance perspective for a possible claim following the Apiatse disaster,” Mr. Lartey disclaimed.
He however added that, considering the stature of Maxam globally, ASIAC experts believe the company may have a more appropriate insurance cover to protect itself against occurrences such as the Apiatse disaster.
The ASIAC boss said Maxam may have as part of its Global Insurance or risk management programme an Explosives Transportation Insurance (ETI), a Commercial Explosives Insurance (CEI) or an Explosives Transportation Liability Insurance (ETLI) cover, either as a stand-alone policy or as part of its global insurance or risk management programme. These policies, he added, are designed to provide protection for explosives manufacturers, distributors and transporters, as well as drilling and blasting contractors.
The ASIAC Insurance boss said some requirements of such polices include drivers who are especially trained to handle the transportation of dangerous goods; packaging requirements; on-loading and off-loading; and the nature of vehicles used in transporting such goods. In some jurisdictions, the driver must be specifically licenced or approved for such an activity.
An ETI, CEI or ETLI policy would usually provide protection for the liabilities of insureds against:
- personal injury, death, property damage and other damage (other than consequential economic loss) arising out of a relevant event
- costs incurred by or for a federal or state government authority in a clean-up resulting from a relevant event.
A ‘relevant event’ means a fire, explosion, leakage or spillage of an explosive at the site, in or on a vehicle or any packaging transported in or on the vehicle or at the site.
He said although these policies may not be available locally, his outfit – ASIAC – is well positioned to arrange such covers for entities in Ghana. When asked about local content and retention, Mr. Lartey said the primary focus of insurance is to ‘transfer your risk away from you’ and ‘ensure that you or your business is positioned in the same place as it was prior to an incident’. We call this the principle of indemnity.
The National Insurance Commission, together with the new insurance Act 2021 (Act 1061), seeks to deepen insurance penetration and retention in Ghana. We intend to work with the NIC in this direction he added.
He said part of ASIAC’s role is to systematically introduce such needed insurance solutions into the Ghanaian market, and gradually get local insurers to build both technical and financial capacity for them.
The ASIAC boss said: “We are open to provide these and many other solutions to the mining, quarry and construction industry in Ghana”.
Mr. Lartey said a strong brand like Maxam is most likely to have this cover as part of its General Global Liability Insurance Programme, or may have a stand-alone ETI or ETLI cover for its operations that would take care of any such liabilities like Apiatse.