Toyota's insurers lodge R6.5 billion claim against KZN govt, Transnet over 2022 flood damage
Transnet, the KwaZulu-Natal Department of Transport, and the eThekwini Municipality have been cited as the defendants in the case.
Archive image of flood damage at Toyota plant in 2022 - MISA on Facebook
The Money Show's Stephen Grootes is joined by political analyst Khaya Sithole.
The insurers and reinsurers of Toyota SA have lodged a R6,5 billion lawsuit against the KwaZulu-Natal Department of Transport, the eThekwini Municipality and Transnet over flood damage to the motor company's Durban plant in 2022.
The papers have been filed with the Durban High Court.
The amount is made up of over R4 billion for the repair and reinstatement of the Prospecton factory and around R2 billion for business interruption.
According to court papers, reports News24, the three parties failed to maintain critical infrastructure that should have prevented damage caused by the overflow of the Mlazi River, which in turn caused extensive damage to the plant on 12 April 2022.
It eventually reopened in August 2022
The key issue here is where the liability or responsibility lies for better management of occurrences like these, says political analyst Khaya Sithole.
"In the way that this case has been structured, it seems that insurers have said there was indeed an insured event and we did pay out, but we believe those responsible for managing the underlying environment could have done a better job... so they're then seeking compensation from those entities which includes Transnet given it owns some of the affected infrastructure."
Khaya Sithole, Political Analyst
It's understandable that any company that has had to carry a R6.5 billion claim would try to see how much they can recover in an instance like this, Sithole says.
"Obviously at the time when they first agreed to insure they would have looked at the infastructure conditions and assessed the risk accordingly and on an ongoing basis there would have had to be a revised assessment with premiums commensurate with that risk."
Khaya Sithole , Political Analyst
"We'll only see what the insurant contract entails during the court process but what has become very clear is that these insurers feel that perhaps the maintenance of that infrastructure was not at the level that was assessed with the risk that they signed up for, so they need to find someone who's going to cover their losses."
Khaya Sithole , Political Analyst
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