Westgate Mall owners paid Sh5 billion for terror attack damage
Owners of Westgate, the Nairobi mall that suffered a spectacular terrorist attack about five years ago, and their tenants were paid Sh5 billion ($50 million) insurance compensation, making it one of the largest underwriting claims ever in Kenya.
African Trade Insurance Agency (ATI) said nearly 86 per cent of the money or Sh4.3 billion was paid to Sony Holdings Limited, the owners of the building that was heavily damaged in the September 2013 attack.
The remaining Sh700 million went to compensating small businesses that were located at the mall and individuals who suffered material loss as a result of being in the building at the time of the attack.
‘BIG CHUNK’
“Kenya has so far been very good to us, the only major claim we paid was the Westgate Mall where we spent a big chunk of close to $50 million,” said ATI chief executive George Otieno on Monday.
Suspected Al-Shabaab terrorists attacked the shopping mall on September 21, 2013, killing more than 70 people, and injuring hundreds of others.
Millions of shillings worth of property was also destroyed.
The shopping mall was insured by Lloyd’s of London, ATI and the Kenindia Insurance.
Westgate Mall hosted more than 50 businesses, including Nakumatt Supermarkets, the anchor tenant, several banks including Barclays , DTB and CFC , restaurants, and clothes and jewellery shops.
ATI paid the massive amount of money to different insurance companies for onward payment to their clients.
Mr Otieno said about 30 small businesses and 15 vehicle owners benefited from the payout.
‘TERRORISM COVER’
“The few number of motorists compensated was due to the fact that most had not extended their cover to terrorism,” said ATI’s head of claims and recoveries, Lucy Machel Ondiek.
That means all vehicles that were insured against theft or fire but not terrorism were not paid for even if they were burnt at the ill-fated shopping mall.
Underwriters had warned that most of the victims, especially car owners, risked bearing the loss for not having been insured against terrorism acts.
Ms Ondiek said Westgate Mall owners have since renewed their cover but declined to disclose the amount.
In late 2013, a report by the sector regulator, the Insurance Regulatory Authority (IRA), indicated that Westgate Mall was insured for Sh6.7 billion, covering property damage and business interruption.
However, claims from individual tenants, who had lost stock and shoppers’ personal property including motor vehicles, were expected to increase the total payout.