Lusaka High Court Judge Mwaba Chanda has ordered Diamond General Insurance Company to compensate Downtown Shopping Complex Limited for damages caused to the building when a hailstorm ripped part of the roof in January 2016.
Judge Chanda says Diamond General Insurance Company should compensate Downtown Shopping Complex for the cost of repairs to the damaged building as agreed in the insurance policy dated April 24, 2015.
In this matter, Downtown was claiming K67,500,000 from the Insurance company for failure to compensate it (Downtown) for damages caused by a hail storm in January 2016.
And during hearing on September 21, 2017, Downtown Shopping Complex Director of Finance and Administration Chitungu Maluba told the court that the complex’s insurance cover was against fire, alarms and other perils for the period between April 24, 2015 and April 23, 2016.
He testified that when a hailstorm damaged their roof on January 8, 2016, the insurance policy was running as 50 percent of the total sum, for the insurance cover had been liquidated.
Maluba stated that when the Downtown made a claim against policy, it was advised to get three quotations for the cost of repairing the building, but added that Diamond General Insurance subsequently refused to pay for the repair.
He stated that Diamond General Insurance’s refusal resulted in loss of business for the company as it raised its own resources and paid Speed Dragon K1,000,000 to repair the roof.
But in its defence, Diamond General Insurance through it’s chief executive officer Edna Kalenga explained to the court that an insurance policy could only come into force if the consideration was fully paid.
She said Downtown’s insurance policy was renewed for 2015 to 2016, adding that since the policy was a renewal, the premium was due immediately upon renewal.
The insurance company denied being liable to compensate the shopping complex because at the time of the incident, Downtown had not settled it’s premium due under the policy in full and it neglected to do so despite several reminders, therefore breaching the policy of the insurance.
Kalenga further contended that after the accident, Downtown raised resources in a bid to settle the outstanding premium when it it had earlier claimed that it did not have finances.
The defendant added that it refused to accept money offered by Downtown in which it requested that the insurance company accepts the claim as it was against the insurance cover.
But in a judgement dated May 2, 2019, High Court Judge Mwaba Chanda compelled Diamond General Insurance Company to compensate Downtown Shopping Complex Limited as agreed in the insurance policy dated April 24, 2015.
She stated that the failure to pay the balance owing on the premium did not invalidate the policy but only entitled the insurance company to bring an action for its payment.
“In light of the foregoing, it is my holding that the defendant is obliged to indemnify the plaintiff as per the agreed insurance policy dated April 24, 2015,” judge Chanda ruled.
She however observed that Downtown Shopping Complex did not furnish any documentary evidence to show the actual amount spent on the repairs to the damaged building.
Judge Chanda therefore referred the matter to the deputy registrar for assessment of the actual cost of the repair works done.
She also found that the damages for loss of business that was being claimed by Downtown was not the initial claim and cannot be forced on the defendant because it (Downtown) was claiming for breach of contract from the defendant.
“In sum the plaintiff is allowed to be indemnified the cost of repairs by the defendant to be assessed by the Deputy Registrar and costs,” ordered justice Chanda.
She also granted the parties leave to appeal the judgement.