Insurance regulator probing BI policies after some insurers refuse to payout
Business interruption (BI) insurance is meant to cover a policyholder affected by events like a notifiable disease outbreak.
CAPE TOWN - An insurance regulator is studying various business interruption insurance polices after several companies have apparently reneged on payouts.
The tourism and hospitality industry has been hard hit by the COVID-19 pandemic.
Many of these firms pay business interruption insurance to cover costs for when an event like a global pandemic hits but now some insurers are not coming through.
Business interruption insurance is meant to cover a policyholder affected by events like a notifiable disease outbreak.
In this case, the insurer typically steps in to pay some of the client's running costs.
But Insurance Claims Africa's Ryan Woolley said that about 500 businesses had appealed for help after their claims were rejected
"These insurers have turned around and said that it's not the outbreak of COVID-19 that's causing their loss. It's the government regulation."
Woolley said that these businesses should still qualify for assistance.
The insurance industry regulator, the Financial Sector Conduct Authority, is now looking into the issue as the regulator's Makgompi Raphasha explains: "We have engaged with insurance companies and we have requested policy wordings on BI policies and we have analysed those wordings."
The two bodies have met to discuss the matter and work on a resolution.