Law Firm sues NEM, Custodian Investment, Cornerstone, Tangering, Consolidated Hallmark Insurance Companies For Alleged Service Dishonesty
OpenLife Nigeria reports that a Lagos law firm, A.O.S.Practise, alongside a property development Company, Aribisala Properties Limited, has slammed N486,502,000 on five Insurance companies and National Insurance Commission over alleged breach of contract.
The Insurance companies are National Insurance Commission, NEM Insurance Plc, Custodian Investment Plc, Cornerstone Insurance Plc, Tangering General Insurance Plc And Consolidated Hallmark Insurance Plc.
In a statement of claim filed before a Lagos Federal High Court against the insurance companies, the plaintiffs 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 the 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 the NEM Insurance quotation for a most suitable policy to ensure that the Plaintiffs’ assets were well protected.
Following provision of the NEM Insurance’s Policy to the plaintiffs which will provide suitable protection for their assets, the Plaintiffs purchased and paid the Insurance Premium provided by the NEM Insurance and the other four insurance companies as Co- underwriters.
For six years, they held the policy and consistently paid the premium charged by NEM insurance for a renewal of the policy on an annual basis. For the six years up until 2021, they paid the premium due to the insurance companies without any incident warranting a claim.
However, there was an unfortunate fire incident which occurred on 4th November, 2021, resulting to some damages in the office.
Accordingly, there was a prompt notice to the insurance companies, after which NEM insurance appointed loss adjuster
The loss adjuster visited the building on 5th of November,2021 confirmed the damaged portion of the insured assets.
The loss adjuster accepted that renovation should immediately commence while the insurance is running so as not to truncate A.O.S practice’s business.
Grange construction Limited which built the property and has been contracted to maintain the building since it’s construction, was assigned to commence the renovation exercise.
However, the Loss Adjuster and the Co-Insurers failed to treat the insurance claim and in a letter of demand dated 18th July, 2022, the complainant demanded to be reimbursed immediately, in the sum of N186.502.030.00 representing the total claim submitted by the plaintiffs being monies spent in the restoration of 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.
They also informed the NEM Insurance that they will claim consequential damages in the sum of N250Million for the losses which the firm has suffered due to the NEM Insurance’s inexcusable delay in the settlement of the claims.
In response to the letter of demand dated 18th July 2022 the insurance companies’ solicitor, Messrs Shola Abidakun & Co issued a correspondence dated 12th August 2022 to the plaintiffs wherein it was averred that it’s client is not opposed to amicable settlement in the interest of mutual business relationship if the complainant’s demand can come down to a more reasonable and affordable sum payable by Nem insurance company.
In the process, they also issued demand letters dated 8th August,2022 to the co-Insurers; Custodian & Allied Insurance Plc, Cornerstone Insurance Plc, Tangerine General Insurance Plc, and Consolidated Hallmark Insurance Plc.
They emphasized that the five Insurance companies shirked their duty as insurance institutions to treat the Plaintiffs fairly as required by regulatory guidelines when they failed to act competently, carefully, and diligently in treating the claim of which they were duly notified.
Consequently, the Plaintiffs claims against the defendants jointly and severally are as follows:
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: who 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 Obligation 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 who 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 16th May, 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 their 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 before the court on behalf of the five Insurance companies by a Lagos lawyer, Barrister Olushola Abidakun, the Insurance companies specifically deny nearly all the allegations.
Barrister Olushola Abidakun stated that the whole submission about the fire incident of the Plaintiffs’ office at No. 142, Bamgbose Street, Lagos on the 4th of November,2021Lagos Island was blown out of proportion.
He stated that the cause of the fire incident was a Daikin Standing Air Conditioner in the library which burst into flames”.
Barrister Abidakun explained that the cause of the fire incident contract was already envisaged, as a result of which in the Policy No. NIAR/100925/IKJ, 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 of the books in the library; and not a single book or anything got burnt as a result of the fire incident.
Barrister Abidakun maintained that having discovered that the claims are outside the scope of the perils covered by the Insurance Policy, Nem insurance call the plaintiffs attention to the General Exclusion to the perils as clearly and boldly stated in big capital letters on page 9 of the policy.
Barrister Abidakun therefore urge 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, the presiding Judge, Chukwujekwu Aneke, has adjourned till Monday,5th of June,2023 for hearing.