Hundreds of importers are facing severe financial losses following the devastating fire at the Cargo Village of Hazrat Shahjalal International Airport. Investigations reveal that the majority of importers did not have “Air All Risk” insurance, leaving them ineligible for any compensation. Report by Sushanta k singha

According to the terms of a Letter of Credit (LC), insurance coverage must extend from the exporter’s warehouse to the importer’s warehouse. However, in practice, many importers tried to reduce costs by opting for limited “Air Only” insurance policies, which provide coverage only while goods are in flight. Once the cargo is unloaded and stored — as in the case of the Cargo Village fire — such policies offer no protection.

Syed Shahriar Ahsan, Chief Executive Officer of Pioneer Insurance, explained:

“Most importers do not have Air All Risk insurance. Some even purchased insurance but excluded fire-risk coverage. As a result, they have no way to recover their losses from this disaster.”

Bank officials responsible for handling LC documentation are also being criticized for failing to verify whether proper insurance coverage was secured. Insiders allege that commission-sharing arrangements between certain bank, insurance, and import company officials have allowed these shortcut policies to persist, putting Bangladesh’s trade sector at risk.

Arif Hossain Khan, spokesperson for the Bangladesh Bank, stated:

“We have instructed all commercial banks to strictly ensure that LC-related insurance policies comply with the required conditions.”

Meanwhile, the Civil Aviation Authority of Bangladesh (CAAB) reportedly insured the entire Cargo Village for only Tk 20 lakh, a move that experts have called highly irresponsible and inadequate. Analysts say this limited coverage is a serious violation of industry norms and regulations.

Expressing grave concern, Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said:

“The non-cooperation of insurance companies and the lack of adequate coverage have pushed many businesses into crisis. The government and regulators must intervene immediately to ensure fair compensation and accountability.”

Insurance experts have also suggested that affected importers consider filing compensation lawsuits against the Cargo Village authorities for negligence and insufficient insurance coverage.