Lusaka High Court orders Diamond General Insurance to pay Downtown Shopping Complex

THE Lusaka High Court has ordered Diamond General Insurance to compensate Downtown Shopping Complex limited for damage caused to the building when a hailstorm ripped part of the roof in January 2016. In a judgment dated May 2, 2019, High Court judge Mwamba Chanda compelled Diamond General Insurance to compensate Downtown Shopping Complex limited as agreed in the insurance policy dated April 24, 2015.

“Failure by the plaintiff to pay the outstanding balance of the premium policy did not invalidate the policy but entitled the defendant to bring an action for its payment,” she said.

This is in a matter where Downtown was claiming a sum of K67,500,000 from the Insurance company for failure to compensate it (Downtown) for damages caused by a hailstorm in January 2016. When the matter came up for hearing, Chitungu Maluba, a director of finance and administration at Downtown, had told judge Chanda that Downtown Shopping Complex limited entered into a lease with the Insurance company for an insurance policy to cover the whole building.

The duration of the  policy cover was from 24th April 2015 to April 23, 2016. According to the premium paid, Diamond General Insurance was to insure Downtown against loss or damage caused by fire, storms and allied perils. Maluba had submitted that whilst the policy was still in force, the shopping complex suffered damage on 8th January when a hailstorm ripped off part of the roof.

The administration director had stated that following the damage to the property, Downtown notified the insurance company on January 22nd  and filed a general loss claim as a requirement for repair of the building. Downtown told the court that it used its resources to repair the damage caused by the hailstorm when Diamond General Insurance failed to meet its obligation. Maluba had stated that following failure by the insurance company to meet its obligation, it raised funds and engaged Speed Dragon to repair the building at a sum of K1 million and 90 per cent of the damage was repaired.

However, in its defense, Diamond General Insurance, through its chief executive officer Edna Kalenga, denied being liable to compensate the shopping complex because at the time of the incident, Downtown had not settled its premium due under the policy in full and it neglected to do so despite several reminders, therefore, breaching the policy of the insurance.


The insurance company argued that the plaintiff had only paid a sum of K100,000 and had an outstanding balance of K148,547.40 for all the policies. Diamond General Insurance said Downtown had agreed to liquidate the outstanding premium by December 15, 2015 but it failed to do so. Diamond general contended that according to the insurance Act, premiums were expected to be paid within a period of one month from the date of signing the agreement policy. Kalenga further contended that after the accident, downtown raised resources in a bid to settle the outstanding premium when it had earlier claimed that it did not have finances. The defendant added that it refused to accept the money offered by Downtown which requested that the insurance company accepts the claim as it was against the insurance cover.

But according to her fact-findings, justice Chanda found that no premium was paid on the date of effecting the insurance cover, and the insurance company accepted the down payment of the premium made by the plaintiff. By implication, the defendant accepted to treat the plaintiff as a credit customer without losing the benefits of the insurance cover, therefore the insurer was liable to pay in case of a loss before payment.

“There was no condition set out in the policy to release the insurance company from liability in the event that Downtown failed to complete payment of the premium as the part payment received by the defendant on the premium was within the agreed terms and placed the plaintiff under cover,” justice Chanda said.

She also found that the damages for loss of business that was being claimed by Downtown was not the initial claim and could not be forced on the defendant because it (Downtown) was claiming for breach of contract from the defendant.

“In sum, the plaintiff is allowed to be indemnified the cost of repairs by the defendant to be assessed by the Deputy Registrar and costs,” ordered justice Chanda before granting the parties leave to appeal the judgment.

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