ICA appeals to insurers to include larger tourism businesses in relief payments
These claims are still the subject of court matters after insurers were reluctant to honour the policies because in their view, the damage was caused by government’s lockdown and not the actual COVID-19 pandemic.
CAPE TOWN - A body that helps with insurance claims wants interim relief payments to extend to larger tourism businesses.
Following an agreement with industry regulators, more insurers have started making these pay-outs to clients with business interruption insurance.
These claims are still the subject of court matters after insurers were reluctant to honour the policies because, in their view, the damage was caused by government’s lockdown and not the actual COVID-19 pandemic.
Even though more policyholders have now received some relief, these measures were aimed at small and medium-sized enterprises (SMEs).
The insurers offering relief have different annual turnover thresholds for qualifying businesses ranging from R5 million to R50 million.
It is an interim measure, while insurers seek legal certainty in court.
Insurance Claims Africa (ICA) is representing over 700 tourism businesses in their fight to get insurers to pay out their business interruption claims.
CEO Ryan Woolley said that at least 200 of those companies were considered to be large businesses, with annual turnover above R50 million and were therefore excluded from relief measures.
“Insurers are now targeting such small businesses that aren’t the mass employers in this industry, so we are calling on the insurers to lift those thresholds,” Woolley said.
Woolley explained why those bigger businesses also needed help.
“The insurers tried to say...’ah yes’ they have access to funding. The problem is that comes at a huge cost and they’ve got no option but to reduce costs and the easiest one is the salary and wages bill,” he said.