Straco Corporation, the operator of the Singapore Flyer observation wheel, has said that its insurance claim for repair costs and business interruption resulting from the ride’s breakdown has been denied.
This was revealed by the company, which operates the attraction through its Straco leisure unit, in a filing to the Singapore Exchange, The Business Times reported. The Singapore Flyer stopped operating on January 25 due to a technical issue, but no-one was reported injured and all 61 passengers were evacuated safely. It remained closed until April 01.
Despite Straco having an industrial all-risks insurance policy covering property damage and business interruption, the reasons behind the ride’s breakdown led to the denial of the claim.
The policy did not cover “gradually developing flaws, damages for which certain third parties are responsible, and damages attributable to enforcement of laws being excluded under the policy,” the filing said.
Straco is consulting with its insurance broker and legal team regarding the next actions that it should take. Partial or full denial of the claim means that the company will not be able to recover all or part of the costs of repairs and/or loss of profit caused by the wheel’s breakdown.
The breakdown had a huge effect on Straco’s bottom-line, as its first-quarter net profit dropped by 60.1% year-on-year to SG$3.6 million.
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