A court has ordered ICEA Lion Insurance to pay policyholder Lawrence Mutiga Sh6.6 million as damages following loss of business occasioned by delayed compensation after his vehicle was involved in an accident more than 12 years ago.
According to Justice Josephine Mong’are, the underwriter will pay the businessman an extra Sh2.6 million, which is the balance of the payment made to Mutiga after the 2011 accident.
“I therefore find and hold that the plaintiff is entitled to damages for loss of business assessed at Sh6,625,000 for the period that the defendant took to pay the insurance claim by the plaintiff.” Justice Mong’are ruled.
Mutiga told the court that he bought the lorry in September 2010 for Sh4.5 million upon which he took a comprehensive cover for Sh361,000 from the underwriter.
Six months later, the trader explained the court, the truck, which he used to transport sand and building stones from Kajiado to clients in different parts of the country, was involved in an accident which he reported to the nearest police.
Upon notification of the accident, the insurance firm allegedly offered to settle the claim as per the policy document for Sh3.4 million since the vehicle had been insured comprehensively.
Mutiga said the insurance firm would later pay Sh1.88 million only to decline to settle the balance, which made him incur losses to his business.
He further accused the insurer of failing to notify him to collect the salvage of the vehicle, saying it would have been sold to cover the difference of the sum insured.
Denying claims that Mutiga reported the accident in time as required under policy, the insurer claimed it initiated investigations and allegedly discovered that the vehicle was not involved in any accident, but developed a mechanical breakdown, which made it decline to settle the claim.
However, the insurance firm said it changed its mind later after engaging the plaintiff’s agent on ex gratia terms.