Toyota’s Insurer sues government for R6.5 Billion over 2022 flood damage
by Kelebogile Matlou
image: Business Tech
Toyota’s insurer, Tokio Marine & Nichido Fire Insurance, is taking legal action against several government bodies, claiming they failed to protect the Prospecton Industrial Area from the devastating April 2022 floods. The insurer is suing for R6.5 billion, covering R4.5 billion for repair work and R2 billion for business losses.
Toyota South Africa Motors (TSAM) is listed as the plaintiff in the court case, the insurer is the party pursuing the claim.Legal expert Craig Woolley from Norton Rose Fulbright said that toyota suffered the loss and the insurers are claiming by virtue of subrogation, which allows the insurer to step into the shoes of the insured for the purposes of a recovery action.
“Tokio Marine are the insurers of TSAM, to whom the company submitted its claim in respect of the flood. The litigation proceedings are not being facilitated and/or funded by TSAM. Accordingly, TSAM will not benefit in any way from the subrogated recovery action against these entities,” said TSAM.
image: Japan Tour
The court papers filed in the Durban High Court name Transnet, the KZN Department of Transport, and the eThekwini Municipality as responsible for the failure to maintain infrastructure that could have prevented the flood. According to the documents, the Umlaas Canal and nearby diversion berm which are key parts of the area’s flood control were not maintained, leading to stormwater overflowing into Toyota’s facility. The insurer argues that:
- Transnet owns and is responsible for the Umlaas Canal.
- The Department of Transport failed to ensure the diversion berm functioned properly.
- The Municipality neglected the broader stormwater system.
The lack of maintenance and repair of past damage allegedly caused the floodwaters to breach the plant. The resulting damage included:
- Structural destruction
- Broken electrical, plumbing, and air conditioning systems
- Damaged equipment, vehicles, and office content
- A complete halt in operations
In total, 4,300 vehicles about 88% of those on site had to be scrapped. “Toyota had to order just over 100,000 new equipment parts to replace the damaged ones,” Toyota noted. A senior disaster management official called it the worst damage any Toyota plant has ever faced globally.
Despite the severity, Toyota’s global and local teams acted fast. It took over three months of repairs before production restarted in August 2022. However, the delay led to the loss of thousands more vehicles that would have been made during the shutdown.
TSAM has since invested R236 million into flood prevention:
- R108 million went into external improvements like an early-warning weather system, new perimeter canals, and upgraded stormwater drains.
- R128 million was used internally to create 835 improvements, such as raising doorways and building bund walls around essential equipment.
Toyota’s insurer claims the government’s failure directly caused the disaster and that all three defendants should be held jointly and severally liable for the losses.
