Trident Insurance company will pay Saham Assurance Company Sh33.4 million with interest for failing to play its part in compensating Tuskys Supermarkets over fire in 2015.
Saham had insured Tuskys for the period between March 1, 2015 and March 1, 2016 and Trident agreed to reinsurer the risk up to 40 per cent.
However, the court heard that Trident did not honour claims payment when one of Tuskys branches caught fire in May 2015.
The supermarket suffered a loss of Sh72.7 million from the incident.
Trident then failed to put any defence in court as to why it breached the contract.
“The plaintiff has made several demands of settlement of the amount due but the defendant has failed to settle the same. It is on that basis the plaintiff prays for judgment for Sh33,427,695.61 as at August 16, 2017 together with interest and costs,” the judge said.
“Since there is no defence to the plaintiff’s (Saham) claim and because the plaintiff’s claim is supported by document, I find the plaintiff’s claim is merited.”
Trident will, therefore, be expected to pay the sum plus interest at court rate from the date of filing suit in 2017 until payment in full. The prevailing court interest rate is 12 per cent per year, calculated on simple interest basis.
When Tuskys informed the insurers about the fire, it had made a claim of Sh67.51 million but when a claim adjuster was appointed, he reviewed it upwards, to factor in the profit lost for the lack of sales.
Trident was supposed to pay Sh29.45 million, being 40 per cent of the claim but instead only made partial payment, according to Saham.
Delayed settlement of claims continues to be a challenge in the insurance sector. Of the 2,233 complaints made to Insurance Regulatory Authority last year, more than half (1,304 cases) relates to delayed compensation.