The Guyana Fire and General Insurance Company (GuyFlag) recently settled a court case with the Avinash branch stores, which won a $43.7M court judgment against it in the High Court earlier this year, over a flood claim they had refused to pay out.

GuyFlag, according to legal sources, paid a sum lower than the figure awarded by Justice of Appeal B.S Roy when the matter was heard in the High Court. Following the court judgment, the company had appealed the decision but later withdrew the appeal after the parties reached a settlement.

In April this year the Avinash branch stores approached the court claiming for damages suffered during the 2005 Great Flood and Justice Roy granted judgment in their favour 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.

Avinash, in the statement of claim filed in the High Court, 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 damage and destruction to their property at various locations which were insured. They filed a claim on February 28, 2005 with GuyFlag setting out their losses. The insurance company did not respond to Avinash’s correspondence.

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.

Avinash’s 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.