Insurers, claimants await legal certainty on business interruption claims
Business interruption claims were initially rejected, with Santam and other insurers reluctant to honour the policies because in their view the damage was caused by government’s lockdown and not the actual pandemic.
CAPE TOWN - Insurers and claimants are hoping to soon receive legal certainty on business interruption insurance claims after waiting for several months.
The court case brought by two Santam clients is expected to be heard in the court on Tuesday.
In the meantime, Santam has almost paid out a large section of the R1 billion relief it offered to business interruption policyholders.
Following an agreement with regulators in July, Santam committed to paying out up to R1 billion in relief while waiting for court cases to play out.
These business interruption claims were initially rejected, with Santam and other insurers reluctant to honour the policies because in their view the damage was caused by government’s lockdown and not the actual pandemic.
But Santam has now paid out over R850 million in relief payments to over 2,000 policyholders that are small and medium businesses operating in sectors severely affected by the COVID-19 pandemic.
It is an interim measure while insurers seek legal certainty in court.
The court case, brought by Ma-Afrika Hotels and The Stellenbosch Kitchen, will be heard by a full bench in the Western Cape High Court, which includes three senior judges, tomorrow.
According to Insurance Claims Africa, this means that the decision in this matter will be precedent-setting.