High Court rules schools liable for misusing buses in private events

Schools across the country may face significant financial risks if they hire out their buses for private activities that are not covered under their insurance policies.

This follows a precedent-setting decision by the High Court, in a ruling delivered on August 8, 2024, in Kisumu.

Justice Roselyn Aburili noted that insurance companies cannot be compelled to cover claims that arise from activities not specified in the insurance contract.

“It would be wrong to compel an insurance company to settle claims that arise from liability not contemplated by the legislature and even then, which is not the subject of an insurance policy between the parties involved,” Justice Aburili said.

The ruling came in a case involving Old Mutual General Insurance Kenya Limited and Oder Boys Boarding Special School in Kisumu. The case arose after members of the Seventh Day Adventist (SDA) Church, who sponsor the school, hired the school's bus on April 23, 2023, to attend a church function in Kakamega County.

Unfortunately, the bus was involved in an accident on the Kisumu-Kakamega Road, leading to several injuries among the passengers.

The injured passengers then filed claims for compensation in the Small Claims Court. However, Old Mutual opposed the claims, arguing that the bus was not being used for the purpose it was insured for at the time of the accident.

The insurance policy specifically stated that the company would not be liable for any accidents, losses, or damages that occurred while the bus was being used for purposes other than those covered by the policy.

On the other hand, the school defended its actions, arguing that the bus was registered in the school's name and, as the SDA was the school's sponsor, they were authorised to use the bus for church-related activities. The church had also fueled the bus and paid the driver a daily stipend for the trip.

Private events

Justice Aburili highlighted that this practice of using school buses for private events, such as religious gatherings, is common in Kenya.

“It is common, especially during crusades and other religious gatherings in the country's major cities, to see all school vehicles lined up from all parts of the nation in their beautiful yellow colours, scaling heights and going down the valleys, leading to those crusades, carrying believers or worshippers,” the judge observed.

However, Justice Aburili warned that such practices are fraught with legal risks, as the insurance policies taken out by schools typically exclude unauthorized passengers—those not covered under the terms of the insurance contract.

When accidents occur under these circumstances, the insurance policy may be voided, leaving injured passengers or their families without compensation and placing a financial burden on the schools.

Justice Aburili stressed that school management boards need to thoroughly review and understand their insurance policies before allowing their buses to be used for purposes not covered by the insurance.

“I do trust and hope that this brief judgment will be circulated to all schools in the country through the county directors of education to alert school management boards, of the dangers associated with the practice, which danger only comes to the fore when there is an accident upon suits being filed by those affected,” she said.

The judge also criticised the practice of writing insurance contracts in very small print, which often discourages proper understanding of the risks involved.

“Those contracts are written in very small prints to discourage readership. The insured often assumes the risks and mostly, is out of ignorance. The unauthorised passengers, on the other hand, are oblivious to the risks. The insurance companies assume no risk and rightly, legally, which risks are not covered by the contract of insurance,” she added.

She emphasised that the ruling serves as a stern reminder to schools to adhere strictly to the terms of their insurance contracts and avoid using their buses for activities that fall outside the scope of the insurance coverage.