Construction Company in N$10m Insurance Dispute

Chinese construction company, China Railway Seventh Group, has dragged three insurance companies, for refusing to pay out N$10 million in damages, to court.

The company claims that Hollard Insurance Company of Namibia, Quanta Insurance Limited, and Momentum Insurance Limited have refused to pay out an insurance claim pertaining to damages incurred during the ongoing construction of phase one of the dual carriageway to the Hosea Kutako International Airport.

According to the agreement, the insurance companies would be co-insurers for the N$10 million with Hollard covering 30%, Quanta providing 40% and the remaining 30% will be covered by Momentum. The company claims that in 2020, it received four complaints about alleged damage to private property in proximity to the project.

This includes three homes on Daan Bekker Street, Olympia and a flat unit in Mountainview complex on the same street. The complaints were of alleged damage to the private properties allegedly caused by vibrations and/or noise from the work carried out by the company on the project in proximity to the properties.

Despite the company not admitting to having caused damage to the properties, it submitted the claims. It also employed Sasol to carry out an assessment. The assessment concluded that the vibration and noise did not exceed the maximum limit.

"The plaintiff (China Railway) maintains that the complaints are claims as envisaged by the policy and are claims under the policy that the first and third defendants are required to indemnify the plaintiff for, whether existing or future claims or contingent claims," says China Railway.

Adding, although the owners of the properties have not yet instituted claims for the damages, "the possibility of future quantified claims for alleged damages against the plaintiff cannot be excluded".

In the correspondence, the insurance companies noted that the claims do not fall part of what is insured. "We regret to advise that we cannot entertain these claims inter alia as the event is not covered in terms of the contractors insurance policy wording," says the insurance companies.

They further stated China Railway has failed to disclose the Sasol report and also failed to disclose material information of risk pertaining to the nature of their work.

The insurance companies have indicated their intent to oppose the application. The case which is before High Court Judge Herman Oosthuizen will be in court on 15 August for a status hearing.