The Avinash branch stores recently won a $43.7M judgement against the Guyana Fire Life and General Insurance Company (GuyFlag) stemming from a claim for damage suffered during the 2005 Great Flood.
Justice of Appeal, B.S. Roy awarded the $43.7M payout to Avinash after finding that the losses suffered by the various stores had been covered by the terms of the policy.
He ruled that this was the issue and not whether the policy was an excess of loss policy, as was stated by GuyFlag in its defence.
In the statement of claim filed by attorney-at-law Edward Luckhoo in association with Robert Ramcharran, Avinash said an insurance policy was taken out with Guyflag in respect of buildings and stock at various locations. Under the policy NO. FM 900 00153 GuyFlag agreed to insure the property against the perils described in the policy.
In 2004 in consideration of the payment of additional pro rata premium of $1, 023266 GuyFlag increased the coverage for the commercial and dwelling properties and a year later, the policy was renewed.
The plaintiffs said that the policy of insurance specifically covered flood damage under the special perils extension.
Following the January 2005 floods while the policy was in full force Avinash suffered damages and destruction to their property at various locations which were insured. They filed a claim on February 28th 2005 with GuyFlag setting out their losses. The insurance company did not respond to Avinash’s correspondence.
Meanwhile, the insurance adjuster retained by the various insurance companies with which the plaintiffs had taken out insurance adjusted the plaintiffs’ loss to $130.7M from the original figure of $157M.
Avinash stated in the documents filed that GuyFlag later issued to them a copy of the insurance policy which policy had not been received before, purporting to constitute an ‘excess of loss policy’ securing coverage above any current or existing insurance coverage.
GuyFlag set out in the policy among other things that the insurances stated in the schedule of the policy would only be paid after full payment has been made by the other insurers inclusive of the said insurance and relevant claims discharges made by the insured.
Avinash stated that at the time of the loss it was also insured with Guyana and Trinidad Mutual Fire Insurance Company Ltd; Demerara Mutal Fire Insurance Company Ltd and Guyana Cooperative Insurance Services Inc, and that the companies all paid to them amounts due and payable under the coverage of their respective policies.
It was then argued that GuyFlag was liable in respect of coverage based on its rate of proportion which when calculated amounted to $43.7M.
The plaintiffs notified the defendant on February 28, 2005 and filed the necessary claims forms. On September 21, 2005, Director Harry Panday received correspondence from GuyFlag President Anthony Soares which said that the policy was an excess of loss policy which benefits are payable only after full payments of the total sum insured carried by other insurers inclusive of self-insurance have been made.
The plaintiffs then made a demand by letter of October 5, 2005 for the amount owing but no response was received. In their statement of claim, the defendants said that repeated requests had been made of the defendants for payment to no avail.
GuyFlag had denied the majority of statements made in the claim by Avinash stating that it raised the excess of loss policy as its defence. The insurance company had argued that the cover they provided was in excess of loss on sums insured with the other insurance companies, adding that it was when that loss was determined and found to be over the cover provided by the other insurance companies then it was that excess which they would be liable for.
The claimed sum was in relation to damage suffered at the Kent Garment factory (Plaisance), the Lama Bond (Lama Avenue), Avishkar’s (Regent Street), Avinash New Bond (Water Street), Avinash (La Penitence) for stock loss and building damage.
The plaintiffs in the case were Malcolm Panday, Harry Panday, Savitri Persaud, Hydriu Sewhdat and Private Resource International and the said plaintiffs trading under the name and style of Avinash Complex and other branch stores FTRRI.
