Business owners entitled to compensation after warehouse fire, says legal expert

Question 1:

A reader asks:
I own an auto parts company and signed an all-risk insurance policy covering my business and its associated properties. Three months ago, a fire broke out in one of my company’s warehouses, causing extensive damage to the building, structure, furniture, documents, and stored auto parts. When I submitted a claim, the insurance company refused to compensate me. What legal action can I take, and am I entitled to compensation?

Answer:

Yes, you are entitled to compensation and may take legal action against the insurance company.

You can file a complaint before the Insurance Disputes Settlement and Resolution Committee, seeking compensation for the damage sustained. Since you signed an all-risk insurance policy, the insurance company is contractually obligated to compensate you in accordance with the policy terms.

Under Articles 1026, 1027, 1037, 1038, and 1040 of the Civil Transactions Law, fire insurance is compensatory in nature. Its purpose is to cover losses resulting directly from fire, up to the value of the actual damage incurred by the insured. This coverage does not typically extend to third-party damages unless the policy explicitly includes liability insurance.

Additionally, Article 246 of Federal Law No. 30 of 2020 requires that all contracts be executed in good faith and in line with the obligations agreed upon by the parties. Furthermore, Article 282 of the same law states that any party causing harm—even unintentionally—is liable to repair the damage. Compensation must reflect both the actual loss and any potential profit lost due to the incident.

In summary, based on the law and your insurance policy, you have strong legal grounds to pursue compensation through the appropriate legal channels.