Hire school buses at your own risk judge

Scene of an accident where a crane swerved and hit three vehicles among them a school bus and two private cars at Sachang'wan blackspot on August 5, 2024. [Ken Gachuhi, Standard]

In a landmark decision that could reshape practices surrounding school transportation, Justice Roselyn Aburili of the High Court has issued a stern warning to educational institutions and the public regarding the use of school buses for private events.

Her decision, delivered in a case involving a school bus accident, emphasizes the significant legal and financial risks associated with hiring out school buses for weddings, funerals and other non-educational activities in case of an accident.

The case at the heart of the court decision involves a school bus which was insured under a policy specifically designed for educational use.

The incident took place on April 23, 2023, when the school bus was hired out to transport church members to a religious event.

In her Judgement, Justice Aburili emphasized a common yet risky practice where schools, after buying and insuring buses for educational purposes, hire them out for various private functions.

Justice Aburili said that poses significant risk because the activities often fall outside the scope of the insurance policy.

She emphasized that schools frequently breach the terms of their insurance policies by using their vehicles for commercial purposes.

According to Justice Aburili, when accidents happen under these circumstances, the insurance policy may be voided. 

“This voiding of coverage leaves injured passengers or their families without compensation, as the schools involved may struggle to meet the financial demands of legal claims,” she remarked.

The plaintiff, Old Mutual General Insurance Kenya Limited, filed the suit seeking to avoid liability, citing a breach of the policy terms by the defendant, Oder Boys Boarding Special School.

The key issues revolved around whether the insurance company should be liable for claims arising from an accident involving unauthorised passengers.

Old Mutual argued the insurance policy explicitly excluded coverage for passengers who were not part of the school’s staff or student body.

On the day of the accident, the bus was involved in a collision along the Kakamega-Kisumu road, injuring several church members. 

Old Mutual contended that the insurance coverage was voided because the bus was used in a manner contrary to the policy’s limitations.

The insurer’s case was clear-cut: the insurance policy was intended to cover only school-related activities. The policy’s exclusions were specific, indicating the insurer would not cover liabilities arising from the use of the bus for purposes other than those stipulated in the policy.

The head teacher admitted that on the day of the accident, the bus was being used to transport church members, not students or staff.

He argued that while the insurance policy was valid at the time, it only covered the vehicle under conditions related to school activities.

Therefore, the school had inadvertently exposed itself to financial risk by allowing the bus to be used for a purpose not covered by the insurance.

Justice Aburili ruled in favour of Old Mutual General Insurance, declaring that the insurer was not liable to make any payments for claims arising from the accident involving unauthorized passengers. The court emphasized that the policy’s terms clearly excluded coverage for unauthorized passengers.

Her decision emphasized that compelling an insurance company to cover claims not contemplated by the policy or the law would undermine the contractual agreement and impose undue burdens on the insurer.

“The insured often assumes the risks and mostly, is out of ignorance. The unauthorized passengers, on the other hand, are oblivious of the risks,” she noted.

She added that schools must strictly adhere to their insurance policies and avoid using their buses for unauthorized purposes.

“This includes refraining from renting out buses for private events without securing appropriate insurance coverage,” Justice Aburili stated.

“Before hiring such vehicles, it is crucial to confirm whether the insurance policy covers passengers who are not affiliated with the school,” she added.