Mombasa Cement has won a Sh4.2 billion insurance claim against Kenindia Assurance over a collapsed silo and lost profits. [Joackim Bwana, Standard]
The High Court has ordered Kenindia Assurance Company to pay Mombasa Cement Sh4,216,836,801 in an insurance claim and accrued interest for its collapsed silo and loss of profits since 2012.
Justice Njoki Mwangi directed the Insurance company to pay the said funds comprising Sh664,767,843 for loss of blending silo and Sh982,434,033.00 for loss of profit, both covered under the Machinery Insurance Policy.
The court agreed that the proximate cause of the collapsed silo consisted of defects in materials, faulty design, faults in erection, poor workmanship and lack of skill, all of which constituted insured perils under the Machinery Insurance Policy.
“In light of the foregoing, this Court is persuaded that the plaintiff (Mombasa Cement) proved its material damage loss in the sum of Sh664,767,843.00 and its loss of profits claim in the sum of Sh982,434,033, making the total recoverable loss Sh1,647,201,876,” said Justice Mwangi.
Mombasa Cement owner, the late billionaire and philanthropist Hasmukh K. Patel, had undertaken a one-year insurance policy worth sh.3 billion with Kenindia Assurance Company, which covered machines and equipment, machinery breakdown, loss of profits and various other insurance covers for its plant in Mombasa.
The said policy covered the plant from December 31 2010 to December 31 2011.
However, when the blending silo collapsed on August 1 2011, Kenindia declined to pay the Sh1,647,201,876 claim for the reconstruction of the silo, arguing it was never covered under the Machinery Insurance Policy.