Insurance Firms Waive Rules to Help Plasco Businesses, Workers

The head of Social Security Organization said on Sunday that payment of unemployment insurance will begin immediately for workers at the Plasco commercial building that collapsed on January 19, by waiving administrative formalities.

“Workers insured prior to the incident can visit the SSO, file unemployment insurance forms and they will be paid as soon as possible,” Seyyed Taqi Nourbakhsh was quoted by IRNA as saying.

The 17-storey building turned into rubble last Thursday after a blaze for more than three hours on the upper floors saw the building crumble, burying a number of firefighters and business owners.

Until Monday, nearly 400 workers had visited Department No. 26 at the western branch of the SSO, to claim unemployment benefits.

Plasco housed 600 plus retail shops and clothing workshops filled with stacks of mostly locally produced apparel. The retailers were almost fully stocked in the run-up to the Iranian New Year Norouz, which falls on March 21.

Due to the 1962 structure’s lack of safety, and negligence on the part of the building owner, only 25% (or 160) of the stores were insured.

  Lack of Insurance

“A large number of businesses refuse to buy insurance policy and risk losing their assets in an incident such as this one,” said Abdolnasser Hemmati, CEO of Bimeh Markazi (Central Insurance company of Iran) and head of the High Council of Insurance.

“Even those who purchased insurance policies normally refrained from announcing the real information about their assets in order to pay less premium,” he said, noting that the claims ceiling of most policies is not sufficient to compensate all the loss.

According to state news broadcaster IRIB, most units at Plasco were insured at 400 million rials ($10,000), while the apparel in each shop is believed to have been worth 2-5 billion rials ($50,000-$125,000). Each shop was valued at 20 billion rials ($500,000) on average.

Other insurance companies such as Asia, Iran, Eghtesad Novin, and Parsian have also expressed readiness to provide immediate relief to the Plasco shopkeepers.

On Sunday, Iran Insurance Company was quoted by eh state broadcaster as saying that it would compensate its clientele with an amount much more than the premium they had paid, to help them jumpstart their business. 

“A total of 316 billion rials ($8 million) will be paid in compensation, whereas the total premiums amount to 594 million rials ($15,000), said Mohammad Heydari, technical deputy at the insurance firm, which had insured nearly 125 commercial units in the building.

All insurance organizations said they would follow up on the payment process to Plasco survivors by bypassing bureaucratic procedures and the normal assessment and evaluation procedures.

  Pensions to Families

Three days after the building’s deadly collapse, the government pledged to provide support for families who either lost their loved ones or their jobs and money in the incident. 

Pensions would be paid to the families of the deceased without any legal formalities, said Labor Minister Ali Rabiei, adding that those who had lost their businesses will receive low-interest loans worth one billion rials ($25,000) each to start anew.

“Any business owner who employs the former workers of Plasco will also be eligible for the loan,” the minister said.

Tehran’s governorate said it would temporarily allocate a place to the clothing workshops to carry on their business. Alborz Insurance Company said on Sunday that nearly 1,000 new business owners had visited the company since the incident to file for insurance.