City law firm sues Britam for allegedly breaching insurance contract

A city law firm has sued a leading insurance company for allegedly repudiating its undertaking to pay indemnity for professional undertaking that was not actuated within the stipulated time.

The law firm of Musyoki Benson & Associates Advocates is now asking the Commercial Court to penalise Britam General Insurance (K) Limited for repudiating on a claim it lodged, yet it had signed a Sh10 million professional indemnity.

Through its managing partner Mr Benson Musyoki Nzakyo, the lawfirm alleges that Britam declined to honour its undertaking to indemnify him should any claim arise from any litigation.

Mr Musyoki states in the evidence filed in court that Britam abandoned him when he was personally ordered by a court to pay a client Sh1.3 million arising from a conveyancing over the sale of a parcel of land in Kwale County.

Mr Musyoki, who has named Britam as the defendant, is asking the court to “declare that the defendant's repudiation of the plaintiff's (Musyoki's) claim was unlawful, unreasonable, and constitutes a breach of the contract.”

He says in the plaint--marked as a fast-track--that his claim arises from breach of a Professional Indemnity Insurance Contract entered with the defendant commencing 2021.

“That by a professional indemnity policy No580/053/1/001/905/2021/07, the defendant undertook and bound itself to indemnify the plaintiff (Benson Musyoki Nzakyo T/A Musyoki Benson & Associates Advocates) in respect of legal liability arising from acts of professional negligence, error, omission, or breach of duty committed in the ordinary and lawful course of the plaintiff's legal practice,” states Mr Musyoki in the evidence filed in court.

He adds that the policy was issued following the plaintiff's completion of a proposal form and payment of a requisite premium, “which proposal was accepted by Britam without any variation.”

Britam on July 20, 2022, confirmed to Mr Musyoki it had insured him by declaring, “The above insured (Mr Musyoki) having successfully applied to Britam General Insurance Company (Kenya) Limited, for a professional indemnity insurance for Advocates, it is hereby agreed that the benefits of the policy issued are available to him/her.”

The court has been informed in the evidence filed by Mr Musyoki that he was issued with a Certificate of Cover for the year commencing 2021, and all conditions precedent, including payment of the “policy excess of Sh50,000.”

The plaintiff avers that during the course of a conveyancing he issued a professional undertaking for Sh1,300,000 that gave rise to a third party claim which gave rise to a suit where Mr John K Kibet T/A Oruenjo Kibet & Khalid Advocates sued him.

In the case Oruenjo Kibet & Khalid Advocates sought to enforce the professional undertaking dated January 28, 2022, in Milimani ELC No. E049 of 2022 (OS-originating summons) against Mr Musyoki.

Upon being sued, Mr Musyoki informed Britam and requested to be indemnified in accordance with the express terms of the insurance policy.

“Britam accepted the claim and demanded a sum of Sh50,000 as insurance excess which was paid in full by the plaintiff (Mr Musyoki),” the court papers state.

Further, the plaintiff says Britam pursuant to the doctrine of subrogation, accepted the claim and appointed Messrs Ako & Co. Advocates to represent Mr Musyoki in the case.

Ako & Co. Advocates entered appearance for Mr Musyoki, but in a dramatic turn of events on or about June 21, 2023, Britam wrongfully, unlawfully, and without justifiable basis, repudiated liability and instructed the firm of Ako & Co. Advocates to cease acting for the plaintiff (Mr Musyoki).

The court has been told that Britam has failed to identify or cite any clause in the policy document or proposal form which excluded conveyancing practice or professional undertaking, which are routine activities within the plaintiff's profession.

Mr Musyoki says in his bid to honour his professional undertaking, paid a total sum of Sh1.3 million in satisfaction of full payment of the purchase price of the Kwale County land and Sh100,000 being costs of the suit Milimani ELC No. E049 of 2022(OS) John K Kibet T/A Oruenjo Kibet & Khalid Advocates vs Benson M Nzakyo T/A Musyoki Benson & Associates.

Following that payment, the matter was marked as settled and subsequently closed pursuant to a consent agreement dated March 1, 2024, between the parties.

The case stems from sale agreement of a parcel of land between Mr John Matiti Kithendu and Stephen Chebor Kipkemei Kipkebut T/A Baimet Contractors.

Mr Kipkebut sold to Mr Kithendu 0.040 hectares of property known as Title Number Kwale/Diani Complex/377.

Mr Musyoki represented Mr Kithendu and he undertook to pay the balance of the purchase price of Sh1.3 million within 14 days.

The court heard Mr Musyoki assisted Mr Kithendu to transfer the property into his name before payment in full.

Mr Musyoki, who delayed in completing the purchase price, was sued at the Milimani Law Courts for breach of contract.

It is when Mr Musyoki was compelled to pay the purchase price arising from his undertaking before court as Britam repudiated its contract terms with him.

He states the action by Britam was unmerited, unreasonable, and constitutes a fundamental breach of the contract and further offends Section 80 of the Insurance Act, which prohibits misleading or ambiguous policy documents.

As a result of the refusal by Britam to pay the liability, the lawyer was compelled to settle the third-party claim at a personal cost of Sh1.4 million.

“To date, Britam has failed or refused to refund the excess paid or indemnify the plaintiff,” Mr Musyoki avers.

He says that the refusal by Britam to foot the liability is actuated by bad faith, corporate impunity, and an unjustifiable attempt to avoid its lawful obligations under the insurance contract.

He accuses Britam of breaching a valid and enforceable contract of insurance without lawful excuse.

He further accuses the insurer of violating Section 80 of the Insurance Act and withholding Sh50,000 in policy excess despite repudiating liability.

As a result, he asserts that he has suffered loss and general damages which he urges the court to award.

“In view of the unlawful conduct of the defendant (Britam) as enumerated, it is only fair and just that the prayers be granted,” says Mr Musyoki.

He is urging the court to declare the actions of Britam as unlawful, unreasonable and constitute a breach of the contract.

He prays the insurer be ordered to pay him Sh1.4 million and Sh50,000 being policy excess.

He further prays that Britam be compelled to pay him interest for the sum of Sh1,450,000 with effect from April 17, 2024, until payment in full.

The case has been listed for hearing on September 24, 2025.