Graphic Business News

Gas explosions everywhere • Where is insurance?

By: Mawuli Zogbenu
Gas explosions have claimed many lives
Gas explosions have claimed many lives

This article was first published in May last year when the Atomic Fire Disaster occured.

Last Saturday’s gas explosion at the Atomic junction near Madina, Accra, is just one of the numerous incidents of gas explosions gutting the country, at least in the past three years. Similarly, the Daily Graphic in its October 6, 2017 issue carried a story about the death of some four persons resulting from a gas explosion in a hotel kitchen in Accra a few days before the Atomic Junction incident.

The GRAPHIC story further catalogued a litany of gas explosions across the country having ‘claimed many lives leaving experts to attribute the phenomenon to the failure by institutions to put in safety measures to prevent such disasters. Mention was made of the death of one person in May this year, with 5 others injured, as a result of a gas explosion at a welding shop at Lamashegu near Tamale in the Northern Region of Ghana. The explosion in June this year, at a fuel p

These and many other incidents of gas explosions keep occurring almost on a daily basis and as to whether we get to know about them or not depends largely on the magnitude and the prominence they receive from the media. The question, I believe many of us ask ourselves is -what is it about gas?

As mentioned in this column before, my aged mother almost cursed me the day I surprised her with a package of a gas cylinder and a 4-gas cooker as a gift. She summoned me to a family gathering and requested me to explain the reason behind my intention to ‘kill’ her with such a dangerous gift. Her fears were genuine as she recounted the many unfortunate incidents of gas explosions she had heard of and keeps hearing of!

Memories of the Peabo-Adoagyiri explosion almost two years ago in the Eastern Region of Ghana might not have faded away completely since the Trade Fair site gas explosion in December 2016 was also quieted by recent related occurrences. The three-year-old gas explosion in Tema, involving a premise used for ‘tye and dye’ business together with the Ashaiman-Tulaku explosion this year, come to mind anytime an incident of gas explosion is reported.

The devastating effects, including injuries, loss of lives and property, to homes and businesses structural defects to buildings in and around explosion sites can be socio-economically worrying. Many people may be left in awe as to how we keep allowing these to happen in spite of profound public education from various stakeholder agencies, including the Ghana National Fire (GNFS).

Our immediate reactions
The thrust is that when these disasters occur, our immediate attention is drawn to the loss of property and lives. We often grimace at the charred images of the deceased or the gory images of the injured, as they are shown on our television sets and on the front pages of our newspapers with social media inundated as such. The next line of attention is to call on government (or its agencies) for some intervention, including compensation to the bereaved families, the injured and call for aid to those who lost their properties.

In all of these, the all-important question of whether the victims had any insurance, from which they could make a claim, is completely lost on many of us. The essence of this article is, therefore, is to draw attention to whom and what could have been covered for an insurance claim and not necessarily the safety measures put in place to prevent these occurrences.

What constitutes an explosion?
An explosion is a very rapid reaction, mostly chemical in nature, but can be electrical (lightning) or thermonuclear. The reaction often produces heat resulting in rapid expansion of gases and / or other particles. The shock waves from explosions are usually responsible for the physical destructions leading to immediate loss of property and lives.

What is Explosion Insurance?
Primarily, lightning, explosion and fire constitute fire insurance. While explosion insurance is often targeted at commercial interests and industries, it can also apply to residential homeowners. Many homeowners’ insurance policies will cover explosions under the category of fire losses.

Explosion, in relation to home insurance, covers domestic gas and / or propane cylinders. This is generally a part of the standard fire insurance, which only covers the damage caused by fire or lightning. On the flip side, however, industrial or unlimited explosion insurance, covers commercial entities that use steam boilers and pressure vessels in their activities.

Explosion in Property Insurance
Property insurance provides protection against most risks that are likely to affect insured property. These are often caused by events such as fire, lightning, explosions and impact. Modern insurance has revolutionised this to include theft and other specialised forms of insurance such as sewage back-up, flood, earthquake, home and boiler insurance packages.

The Analysis

As far as insurance is concerned, these numerous explosions would ordinarily be covered under the basic fire and allied perils cover and due compensation paid to the victims. What remains uncertain is whether the owners of these premises have insurance package that can be extended to provide compensations in any form to victims.

It is worth noting the fact that in such cases, insurance liability could only be borne after investigations have been duly carried out.

Medical treatment costs
The bulk of medical expenses resulting from such explosions under normal circumstances should be covered by the medical insurance where injured victims may not have to pay significant amounts of money from their own pockets for treatment. If for any reason, the victims did not have active health insurance cover, they might have to pay a substantial portion of their treatment cost before getting any benefits from the insurers of such premises, if any.

Thus, the exact source of healthcare payments will depend on the circumstances surrounding the explosion, that is, if an adequate comprehensive policy was in place.

Death claim
For those who might have lost their lives in such explosions, it becomes a liability issue for particularly owners of such premises to provide adequate compensations to the bereaved families be they from their insurance packages or from their own pockets / coffers and not government! That is the reason it is always advisable to protect businesses or homes against some of these unknown future mishaps

using various insurance packages such as public liability and employees liability insurance etc as this is an acceptable risk management mechanism.

The Way forward
The events preceding this write-up should be a wake-up call for individuals, businesses and corporate institutions to apprise themselves of the need to take up insurance for their domestic and commercial properties and premises, in preparedness towards future uncertainties, no matter the amount of safety precautionary measures they might have put in place. Moreover, insurers must constantly engage the public on the need for insurance covers providing them some detailed options, with clarity on the technicalities involved. The engagement must also focus on claim documentation, processes and procedures, as well as, the rights and responsibilities of the insuring public.

Until next week, this is “Insurance from the eyes of my mind”.