Most businesses affected by the devastating fire at the cargo village of Hazrat Shahjalal International Airport in Dhaka will not receive insurance compensation. The reason lies in the type of insurance policy they purchased—many had opted for coverage that applies only when goods are in flight, known as the “Air Risk Only” policy. By contrast, a smaller number of importers held “Air All Risk” policies, which cover goods for the entire period of transit, from warehouse to warehouse. According to industry sources, insurance companies in Bangladesh currently issue two types of policies for air cargo—“Air All Risk” and “Air Risk Only.” The first is internationally recognized and provides coverage from the seller’s warehouse to the buyer’s warehouse. The latter, however, only covers goods while they are physically onboard the aircraft, from loading to unloading. As a result, importers holding “Air Risk Only” policies will not be eligible for compensation for losses caused by the cargo village fire.
The world-renowned insurance and reinsurance market Lloyd’s of London has confirmed that it has not approved any “Air Risk Only” policy of this type. However, Bangladesh’s Sadharan Bima Corporation (SBC) maintains that these policies are legitimate under the directives of the Insurance Development and Regulatory Authority (IDRA) and are issued in full compliance with domestic regulations.
Those who purchased “Air All Risk” policies will be compensated, while holders of “Air Risk Only” policies are likely to be left out.
According to data obtained by Jago News, more than 100 insurance claims have been filed following the fire, the majority of which involve “Air Risk Only” policies.
The fire broke out at the airport’s import cargo village on the afternoon of October 18. It took about nine hours to bring the blaze under control and 27 hours to extinguish it completely. The Exporters Association of Bangladesh (EAB) estimates that the losses could reach Tk 12,000 crore, while the Bangladesh Computer Society (BCS) reported losses of around Tk 35 crore among its members.
The exact amount of damage is yet to be determined. Sheikh Bashiruddin, Adviser to the Civil Aviation and Tourism Ministry, stated that the investigation is ongoing and that the government will release the report soon.
Among the affected businesses is Uniglory Paper and Packaging Ltd of Tangail. Managing Director Kaiser said all their imported goods from Taiwan were destroyed in the fire. Although they have submitted an insurance claim, no payment has been received yet. When asked why they chose the “Air Risk Only” policy, he replied, “Insurance was mandatory for importing goods, so we took it. The company never said that we wouldn’t get compensation under this policy.”
Similarly, M/S Mohubar Rahman Particle Mills Ltd of Rangpur also lost their imported materials. Their insurance cover note specifies “Air Risk Only,” meaning they too will receive no compensation.
The Bangladesh General Insurance Company (BGIC) has received the highest number of claims—79 in total, of which 49 are “Air Risk Only” policies. Ahmed Saifuddin Chowdhury, CEO of BGIC, said, “There’s no scope for compensation under Air Risk Only policies. However, if the cargo section of Biman Bangladesh Airlines has separate fire insurance coverage, some claims might still be considered.”
He added that the “Air Risk Only” policy is fully legal, explaining, “Customers are free to choose the policy they prefer. The Air Risk Only policy has a lower premium, so many businesses opt for it to save costs.”
Shah Alam, General Manager of the Sadharan Bima Corporation, said, “Both ‘All Risk’ and ‘Air Risk Only’ policies are defined in IDRA regulations. Even if Lloyd’s doesn’t approve such a policy, it remains valid under our national law.”
He clarified further: “The Air All Risk policy covers warehouse-to-warehouse transportation, while the Air Risk Only policy covers only the period when goods are on the aircraft—from loading to unloading. Therefore, losses at the cargo village fall outside the scope of the Air Risk Only policy.”
Questions were also raised about BRAC Bank’s role, as it facilitated import transactions where such limited insurance was used. The bank explained that the importer in question had conducted trade under the Free on Board (FOB) term, which transfers responsibility to the buyer once goods are loaded onto the vessel. Thus, the choice of an “Air Risk Only” policy was made by the importer, not the bank.
BRAC Bank also clarified that it did not issue any Letter of Credit (LC) in this case. The import was contract-based, conducted under the Uniform Rules for Collections (URC 522) established by the International Chamber of Commerce (ICC), which does not hold banks responsible for insurance or warehousing arrangements.
In the end, many of the businesses affected by the Shahjalal Airport fire may receive no compensation at all—simply because they chose the wrong type of insurance policy.