Issuance of post-dated cheques does not amount to advance payment of an Insurance Premium - Businessday NG

PRESTIGE ASSURANCE PLC & ANOR v. SARA PRODUCT LTD & ANOR

(LAGOS DIVISION)

(BOLA; KWAHAR; ONWOSI: JJ.CA)

Prestige Assurance Plc (the 1st Appellant) issued a Fire Insurance Policy to Sara Product Limited (the 1st Respondent) in respect of its business premises. Upon the expiration of the initial policy, the parties renewed the insurance cover for the period of 1 September 2008 to 1 September 2009. The premium of ₦5,787,799 was payable by eight monthly post-dated cheques.

While the policy remained in force and before four of the post-dated cheques matured, a fire occurred on 23 January 2009 at the 1st Respondent’s insured premises situated at No. 184/185 Happy Home Avenue, Kirikiri Industrial Estate, Lagos. Following the incident, the 1st Appellant appointed Benevolent Loss Adjusters Ltd. to investigate the cause of the fire and assess the extent of the loss. In its report dated 20 July 2009, the Loss Adjusters concluded that the 1st Respondent had breached certain warranties under the policy and was responsible for the fire incident and accordingly advised the 1st Appellant to repudiate the claim.