CIC General Insurance Limited v Ndolo (Civil Suit E4057 of 2025) [2026] KEMC 164 (KLR)
The bottom line
#A Kenyan court ruled that using a privately insured car for hire releases the insurer from paying accident claims, even those by accident victims.
What this practically means
#Executive summary
#Key legal issues
#Breach of the limitation as to use clause
The Defendant breached the limitation as to use clause by operating the privately insured vehicle as a car-hire/commercial vehicle.
The policy was issued as a private motor vehicle policy expressly excluding carriage of passengers for hire or reward, taxi and PSV use. Unchallenged investigation evidence showed the vehicle had been hired out to a third party for consideration and was used commercially at the material time. With no defence filed, the credible uncontroverted evidence was accepted, establishing breach of the limitation as to use clause.
Breach of utmost good faith
The Defendant breached the principle of utmost good faith by failing to disclose the commercial use of the vehicle.
Insurance contracts are uberrimae fidei; the insured must disclose material facts influencing the prudent insurer's assessment of risk or premium. The vehicle was insured on the basis of private use, but its subsequent use as a car-hire vehicle fundamentally altered the risk assumed. The commercial use was a material fact that ought to have been disclosed, and non-disclosure breached utmost good faith.
Insurer's entitlement to avoid liability under Section 10(4)
The Plaintiff established sufficient grounds to avoid liability under the policy pursuant to Section 10(4) of the Act.
Section 10(1) obligates insurers to satisfy judgments against insured persons, but Section 10(4) permits an insurer to bring declaratory proceedings to avoid liability on grounds of material non-disclosure, misrepresentation or breach of policy conditions. Having found breach of the limitation as to use clause and of utmost good faith, and following the cited authorities, the court found sufficient grounds for avoidance of liability.
Entitlement to reliefs, including costs of the related Molo suit
The declaratory orders were granted, but the prayer for costs incurred in Molo CMCC E109 of 2025 was refused for lack of proof.
The Plaintiff's cogent, credible and wholly uncontroverted evidence proved the case on a balance of probabilities, entitling it to the declaratory orders. However, on the specific prayer for costs allegedly incurred in the Molo third-party suit, no evidence showed the quantum of those costs or that they had crystallized into a recoverable liability, so that prayer was declined.
Legal principles established
#- Where evidence remains uncontroverted and is credible, the court is entitled to rely upon it.
- Insurance contracts are contracts of utmost good faith; material non-disclosure entitles an insurer to avoid the policy.
- A material fact is one which would influence the judgment of a prudent insurer in assessing risk or fixing the premium.
- An insurer is entitled to repudiate liability where an insured vehicle is used contrary to the express terms of the insurance policy, and may seek declaratory relief under Section 10(4).
Court orders
#- 1.A declaration that the Defendant breached the fundamental warranties, terms and conditions of Insurance Policy Number 01/070/1/011337/2023/09 issued by the Plaintiff in relation to Motor Vehicle Registration Number KCQ 651G.
- 2.A declaration that the Plaintiff is not liable to make any payment under Insurance Policy Number 01/070/1/011337/2023/09 in respect of any claims against the Defendant arising from the injuries sustained as a result of the accident that occurred on 5th August 2024 involving Motor Vehicle Registration Number KCQ 651G.
- 3.A declaration that the Plaintiff is not liable to satisfy any judgment, decree, claim, costs, interest or other liability arising from the accident involving Motor Vehicle Registration Number KCQ 651G which occurred on 5th August 2024, including any claim arising therefrom in Molo CMCC E109 of 2025, Salome Amboye & Dennis Ouma Oluoch (suing as the Legal Administrators of the Estate of the Late Peter Dina Oluoch) v Radha Motors Limited & Peter Kioko Silu Ndolo & Dennis Khisa Khaemba.
- 4.The Plaintiff shall have the costs of this suit.
- 5.Interest on the costs awarded shall accrue at court rates from the date of assessment of such costs until payment in full.
- Jurisdiction invoked
- Section 10(4) of the Insurance (Motor Vehicles Third Party Risks) Act, Cap 405 Laws of Kenya (declaratory jurisdiction of insurer)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "CIC General Insurance Limited v Ndolo (Civil Suit E4057 of 2025) [2026] KEMC 164 (KLR)", Case Analysis (2026). Civil Suit No E4057 of 2025. Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2026/164/eng@2026-06-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.