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JAKARTA, Indonesia-Businesses in southeast Asia will file few insurance claims as a result of widespread smoke haze caused by forest fires, insurers in Indonesia say.

Few Indonesian business carry business interruption coverage, and even those that do would not be able to make claims, because the haze is not an insured event, insurance sources said.

Insurers expect the only major claims to result from the Garuda Indonesia airlines crash near Medan and the collision of a merchant ship and a tanker offshore from Indonesia last month (BI, Oct. 6).

Smoke from forest fires that have raged for the last four months in Kalimantan, Sumatra and other areas of Indonesia has enveloped Indonesia, Singapore, Malaysia, southern Thailand, Brunei and the Philippines.

Indonesia President Suharto has apologized to neighboring countries. Plantation owners and forestry companies that use slash-and-burn methods to clear the land are thought to be responsible for the fires. The fires are intentionally set every year, but due to drought conditions they burned out of control this year.

Last month, President Suharto banned the use of fire to clear land.

Indonesia's Environmental Impact Control Agency has been gathering samples to link forestry companies to pollution and other environmental damage.

Forestry officials said 110 of 176 forestry companies denied using fire to clear land, and 65 had provided audited evidence to show they were not responsible.

Airline companies have been hit hard by the fires. A Singapore Airlines spokesman said the airline would not be able to recoup its loss because it does not have insurance for losses from delayed and canceled flights.

The spokesman said that between Sept. 14 and Oct. 8, the airline has canceled eight flights and delayed eight departures to destinations in Malaysia and Brunei. He would not give a figure on the total cost to the airline but said some governments were advising tourists to stay away from the region.

"It is too early to give our financial loss at this stage, but we have to take into account not only the flights canceled, but individual bookings lost," he said.

Malaysia Airlines has canceled some flights, including those to the resort island Langkawi, because of poor visibility, a spokesman said.

Malaysia Airlines alone canceled more than 600 flights in the last two weeks of September.

Still, Scott Pickering, president and director of Jakarta-based CIGNA Indonesia PT Asuransi, said insurers would see few claims arising directly from the haze.

"CIGNA has not seen claims specifically attributed to haze," he said.

Chin Siew Chi, ASEAN region underwriter for GIO Insurance Ltd., based in Kuala Lumpur, said she was unaware of any claims. She said business interruption policies would not be triggered, as no insured event had occurred.

Insurers say most claims in southeast Asia will be for medical compensation, and Mr. Pickering said they would most likely originate from Singapore, where chest and respiratory complaints had increased.

Areas in Indonesia where the haze was at its worst are remote, and few people have personal medical insurance, so few claims will result, he said.

Mr. Pickering said workers compensation claims will increase over the next one to five years as a result of the haze, and "the (Indonesian) government would have to look at that."

Indonesia's workers compensation system is an employer contribution plan. Claims would be "a regional issue" depending on how heavy the haze was in certain areas, he said.

Businesses in a high-haze area might make prevention-of-access claims, but those claims would have to be triggered under a property damage policy, he noted.

Insurers said few businesses in Indonesia had property damage policies, let alone business interruption coverage.

Peter Meyers, president director of Jakarta-based AIU Indonesia PT Asuransi, said business interruption policies would not be triggered unless governments in southeast Asia ordered people to stay home.

Mr. Pickering said few businesses in Indonesia have business interruption cover, and larger corporations usually have high deductibles, meaning claims are unlikely.

"Although the haze is a very real problem, the insurance industry has seen no great consequences," Mr. Meyers said.

"Indonesia is a place where insurance awareness is not vast and indigenous business, if insured, would only be covered for fire."

Mr. Pickering said the only other claims that might arise from the haze are automobile claims if drivers have accidents due to poor visibility.

Two deadly accidents have been at least partly blamed on the haze.

On Sept. 26, the Indian cargo ship MV ICL Vikraman collided with the tanker MV Mount 1, about 7 miles off Port Dickinson.

Only five of the 34 on board survived.

A spokesman for the Malaysian Maritime Rescue and Coordination Center said poor visibility because of the haze caused the accident, which sank the ICL Vikraman and left the Mount I slightly damaged. Insurance for those vessels was placed in local markets.

The Garuda Airlines plane crash 870 miles northwest of Jakarta, near Medan, killed 234 people.

Garuda places its hull and liability coverage with Jasa Indonesia Asuransi P.T. in Jakarta.

Poor visibility has been suggested as a cause of the accident, but that has not been proven, said CIGNA's Mr. Pickering.

He said the company already had received seven accident and loss-of-life claims from the Garuda Indonesia crash.

Mr. Pickering would not say how much CIGNA was likely to pay in claims but said the company was "acting quickly.'