A Lagos-based law firm, A.O.S. Practise alongside a property development company, Aribisala Properties Limited, have slammed N486,502,000 (Four Hundred and Eighty-Six Million, Five Hundred and Two Thousand Naira Only) on five Insurance Companies, including the National Insurance Commission, over alleged breach of contracts.
In the suit filed before a Federal High Court, sitting in Lagos, the first to sixth defendants are: National Insurance Commission, Nem Insurance Plc, Custodian Investment Plc, Cornerstone Insurance Plc, Tangering General Insurance Plc and Consolidated Hallmark Insurance Plc.
The plaintiffs, in a statement of claim filed before the Court against the defendants by the Principal Partner of A.O.S. Practice, Chief Ajibola Aribisala, SAN, stated that they retained the services of an insurance broker, Hogg Robinson Nigeria Limited, as their Insurance Broker to source for the best insurance policy to suit their needs.
Sometime in March 2015, the Insurance Broker informed the plaintiffs that Nem Insurance had approached it with the desire of being the plaintiffs’ Insurer.
The Insurance broker, noting the continual renewal of the license of the insurance companies as insurers by the National Insurance Commission held out the five Insurance companies, as suitable underwriters to the plaintiffs
Subsequently, the Insurance Broker provided the Plaintiffs with Nem Insurance quotation for a most suitable policy to ensure that the Plaintiffs’ assets were well protected.
Following the provision of Nem Insurance’s Policy, which provides suitable protection for Plaintiffs’ assets, the Plaintiffs purchased and paid the Insurance Premium provided by Nem Insurance and the other four insurance companies, as Co-underwriters.
The Plaintiffs subsequently held the policy for six years, and consistently paid the premium charged by Nem Insurance for renewal of the policy on an annual basis, for the six years up until 2021.
The Plaintiffs equally paid the premium due to the insurance companies without any incident warranting a claim.
But on November 4th, 2021, at about 8pm an unfortunate fire incident occurred at the Plaintiffs’ insured premises and burnt the 3hp Daikin Standing Air Conditioner in the library (5th floor) to ashes.
The 3hp Daikin Standing Air Conditioner in the library, which was purchased as brand new from Daikin, and had been regularly serviced and maintained by the in-house A/C technicians, had bursted into flames.
The librarian of the law firm one, Chinedu Nzerim, immediately grabbed the fire extinguisher stationed by the main entrance of the library and sought to extinguish the fire.
However, instead of the diminishing, there was a further outburst of the fire, which forced the librarian to run away from the immediate environs.
The Federal Fire Services Department arrived at about 9.30pm, and tried thier best to put off the fire. But despite the fact that the flame had been put off, the effect of the fire lingered as smoke continue to billow off the building.
The Plaintiffs subsequently gave prompt notice to the insurance companies, after which Nem insurance appointed loss adjuster, who later visited the building on November 5th, 2021 to confirm the damaged portion of the insured Assets.
In the loss adjuster’s assessment and confirmation, during his visit, he agreed that renovation should be commenced immediately, while the insurance continues to run so as not to truncate A.O.S Practice’s business.
The Plaintiffs contacted Grange Construction Limited, the company that built the property and has been maintaining the building since its construction, to commence the renovation exercise.
The Plaintiffs averred that in light of the Loss Adjuster and the Co-Insurers continued failure to treat its insurance claim, the Plaintiffs vide a letter dated July 18th, 2022, demanded to be reimbursed immediately with the sum of N186.502.030.00, representing the total claim submitted by the Plaintiffs as monies spent in restoring the infrastructure, fixtures, fittings and funds required to purchase new books to restore the library to what it used to be before the fire incident.
The Plaintiffs also informed Nem Insurance that they will also claim consequential damages in the sum of N250million for losses which the firm suffered due to Nem Insurance’s inexcusable delay in the settlement of the Plaintiffs claim.
In response to the Plaintiffs’ letter of demand, the insurance companies’ solicitor, Messrs Shola Abidakun & Co issued a correspondence dated August 12th, 2022 to the Plaintiffs wherein it averred that his client is not oppose to amicable settlement in the interest of mutual business relationship, if the Plaintiffs demand can come down to a more reasonable and affordable sum payable by Nem insurance company.
Fire incidents are peculiar in nature and there cannot be a like circumstance of fire incidents.The damages occasioned by a fire incident vary from incident to incident.
Demand letters were also issued by the Plaintiffs on August 8th, 2022 to the Co-Insurers: Custodian & Allied Insurance Plc, Cornerstone Insurance Plc, Tangerine General Insurance Plc, and Consolidated Hallmark Insurance Plc.
The Plaintiffs averred that the five Insurance companies shirked their duties as insurance institutions to treat the plaintiff fairly as required by regulatory guidelines when they failed to: act competently, carefully, and diligently in treating its claim of which they were duly notified; hence it was apparent the insurance companies sought to frustrate the Plaintiffs to enable them bargain the claimed amount.
The Plaintiffs also averred that in spite of the letters of demand sent to the insurance companies, they neglected and/or refused to settle the claims arising from the policy upon which all premiums charged were duly paid, without any explanation whatsoever till date, even after being informed of the Claim of the Policy Holders vide the letter of the claim dated February 2nd, 2022.
Consequently, the Plaintiffs claims against the defendants are as follow:
– A declaration that in view of Sections 31 and 40 of the National Insurance Commission Act, the National insurance Commission owe the Plaintiffs a statutory duty to protect them from unsound insurers such as the five insurance companies, which are being allowed to operate freely in the insurance market as underwriters.
– A declaration that in line with the provisions of Sections 31 and 40 of the National Insurance Commission Act, the five Insurance companies are unsound insurance companies, as they can no longer honour their financial obligations to insured parties, the plaintiffs inclusive.
– A declaration that the National Insurance Company, as a Chief Regulator is empowered by Section 35 of the National Insurance Commission Act, to undertake special inspections, impose fines, withdraw licenses and issue suspension(s) to the insurance companies and any other Insurance companies that are in violation of the National Insurance Commission’s Guidelines issued to sanitize the insurance industry and protect policy holders.
– An order awarding special damages against the National Insurance Commission and the five insurance companies in the sum of N186,502,030 being the sum due on the Plaintiffs’ claim.
– An order that interest on the sum of N186,502,030 due to the Plaintiffs’ from the five insurance companies calculated at the rate of 21% per annum from the May 16th, 2022 being the day immediately after the 90 days allowable period for settlement of claims, until judgement is delivered, and thereafter at the rate of 10% per annum until the final liquidation of the judgment debt by the five insurance companies.
– An order awarding general damages of N250,000,000 in favour of the Plaintiffs and against the Defendants on account of the economic loss suffered by the Plaintiffs owing to the tardy handling of its claims by the five insurance companies
– Cost of instituting this suit in the sum of N50,000,000.
However, in a statement of defence filed on behalf of the five Insurance companies before the Court by a Lagos-based lawyer, Barrister Olushola Abidakun, the Insurance Companies deny nearly all the allegations contained in the Claimants’ Statement of Claim.
They averred that the whole allegations and pleadings about the fire incident of the Plaintiffs’ office at No. 142, Bamgbose Street, Lagos, on November 4th, 2021 was blown out of proportion.
They averred that, the truth as to the cause of the fire incident, as pleaded in the Plaintiffs’ Statement of Claim is, “the Daikin Standing Air Conditioner in the library, which burst into flames”.
The insurance companies averred that the cause of the fire incident contract, was already envisaged, as a result of which in the Policy No. NIAR/100925/IKJ, at page 10, paragraph 1(c) under the general exclusion clause, that the policy does not cover damage to any electrical machine apparatus or any portion of the electrical and consequential loss or damage installation as it is the case in the instant paragraph 36 of the Statement of Claim, where “the 3HP Daikin Standing Air Conditioner in the library, burst into flames” and consequently, caused some soot dust to cover the walls and few books in the library; and not a single book or anything got burnt as a result of the fire incident.
Having discovered that the claim of the Plaintiff was outside the scope of the perils covered by the Insurance Policy, Nem Insurance called the Plaintiffs attention to the General Exclusion to the perils as clearly and boldly stated in big capital letters at page 9 of the policy.
The Counsel, representing the insurance companies, wrote a letter dated August 12th, 2022 specifically calling the Plaintiffs’ attention to the Insurance Policy, that their claims are not in any way covered by the Insurance Policy.
The Plaintiffs erroneously misinterpreted the good gesture of the the insurance companies in their communications and particularly in the said letter dated August 12th, 2022, as acceptance of their claims; when it is very obvious to both parties, that the claims are not covered by the Insurance Policy, as clearly stated in the clause under the “GENERAL EXCLUSION TO THE PERILS”.
The Plaintiffs are duly aware that their claims are not covered by the Insurance Policy, as a result of which they are trying to take advantage of the good gesture
The insurance companies averred that asides the non coverage of the Plaintiffs claims by the Insurance Policy, there is a blatant breach of the agreement by the Plaintiffs, of the insurance policy, which demands that notice of the alleged fire incident be given in writing to the insurer by the insured.
The Plaintiffs pleaded that the fire incident occurred on November 4th, 2021 at about 8:00pm at their office located at No. 142, Bamgbose Street, Lagos Island, Lagos.
By virtue of the agreement of the parties at page 22 of the Insurance Policy, the Plaintiffs are to NOTIFY Nem Insurance Company and four other insurance companies in writing within 30 days of the occurrence of the fire incident.
There is neither a paragraph whatsoever, out of the 203 paragraphs of the Plaintiffs’ Statement of Claim, nor any Written Notification whatsoever, among the 29 documents in the list of documents to be relied upon at the trial, that reflects any written notification of the fire incidents dated November, 2021 which is the month within which a Notification in writing along with the Statement of Claim ought to have been received by the insurer.
The failure of the Plaintiffs to send a written notification of the fire incident to the insurance companies as agreed by the parties has further compounded the claim of the Plaintiffs, which are not covered by the policy.
The Insurance companies as parties to this suit have no business to be before this Court, in respect of the subject matter of this suit as the appropriate venue to resolve whatever differences or disputes between the parties in this suit is through arbitration and not litigation.
They averred that, page 14, paragraph 8 which is the last paragraph of the page in the Insurance Policy, explains clearly where any dispute or differences between the parties herein should be referred and amicably settled and not to be referred to this honourable court.
The insurance companies averred that the only option available for this suit of the plaintiffs, is for the suit to be struck out, so as to assist the Plaintiffs to go and do the right thing, by going through the proper channel to ventilate whatever grievances they have against the Defendants in this suit,
They urged the Court to dismiss all the claims of the Plaintiffs in their entirety with substantial cost awarded in favour of the insurance companies for filing this suits against the Insurance companies.
Meanwhile, Presiding Judge, Justice Chukwujekwu Aneke, has adjourned till Monday, June 5th, 2023 for hearing.