In this Zambian judgment of Mattaniah Investments Limited and Zambia State Insurance Corporation Limited,  the Zambian High Court considered the meaning of “accident” in a policy which indemnified the insured for loss of broiler chickens due to “accident, disease and illness”. The court accepted that an “accident” is simply something unusual, unforeseen or an unexpected occurrence that causes injury, loss or death.  And what happened to the insured fits squarely in the definition of “accident”. The failure of electricity supply to the insured’s chicken houses was an unexpected event not designed nor intended by the insured.

The insured lost a large number of broiler chickens due to the failure of electricity supply to its farm. The chickens were kept in fully enclosed computerised and environmentally controlled houses in which all the needs of the chickens were automatically controlled.  The system relied on the regular supply of electricity from the national supplier to keep the farm operational. And it had an alternative backup system by way of a standby-generator which was regularly maintained.

There was a sudden failure in electricity supply which affected the farm.  For an unexplained reason the generator also failed to start and supply electricity for a period of some two hours was interrupted until it was repaired.

Due to the failure of the electricity supply the ventilation system failed leading to an increase in temperature in the chicken houses and the deaths.

The evidence was that it was not foreseen by the insured that the standby-generator would fail.

The insured argued that the loss was an “accident” as there was no mistake, negligence or misconduct attributable to the insured.

Following a review of English and Zambian law authorities and the meaning of “accident” and the rules of policy interpretation the court held that the event was an indemnifiable accident.

The insurer argued that the generator failed to operate due to an airlock which was a mechanical problem requiring fixing and was not an accident as contemplated by the policy.  And that while the loss of the chickens was unintended the loss of power by the national supplier was anticipated to the extent that the insured had a standby-generator and that the generator’s failure to operate in the circumstances was a natural consequence thereof and that the cause of the loss was therefore not an accident.

The failure of the generator to operate could not have reasonably been anticipated by the insured.

Accordingly the policy was required to respond.

The outcome would have been no different in South African law. The judgment demonstrates how wide wording can bring perhaps unintended risks into the ambit of a policy.