Insurance payment for Lapindo will reach only $25 million

A consortium of five insurance companies will only pay insurance payment of up to US$25 million for the losses suffered by Lapindo Brantas from the leakage in its well in the company's exploration areas in Porong, Sidoardjo, East Java, Koran Tempo reported Tuesday.

Syahrir Hamzah, the president director of PT Asuransi Tugu Pratama Indonesia, one of insurance companies in the consortium, said in Jakarta Monday that the consortium would pay the claim in accordance with the insurance coverage contract signed with Lapindo.

Aside from Asuransi Tugu Pratama, the consortium's members are PT Jasa Asuransi Indonesia, PT Wahana Tata, PT Central Asia and PT Astra Buana.

"At present Tugu Pratama and loss adjuster are assessing to the total losses," he said.

As earlier reported, the leakage in Lapindo Brantas's Banjar Panji-1 well has caused massive floods of muds affecting rice fields, residential areas and industrial sites located several kilometers from the well.

Based Tempo's estimate, the losses caused by the leakage could reach about US$200 million or about Rp 1.9 trilion. (*)