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Santam says it will begin evaluating some rejected claims related to the coronavirus after a recent court ruling ordered South African insurers to pay for business interruption losses.
The ‘Ma-Afrika’ ruling held that there is coverage for business interruption losses caused by Covid-19 itself and, in general, by the national shutdown and related restrictions imposed by the government in response to the pandemic, provided that Covid-19 has occurred. within the designated radius of the insured premises.
The ruling, which was issued in November 2020, aligns with the approach of the UK Financial Conduct Authority to resolve claims of business interruption as a result of Covid-19 restrictions.
“Santam respects the decision of the courts and believes that the recent judgments are sufficient to provide legal certainty as to the immediate cause of the business interruption losses for policies with the same conditions, characteristics and circumstances as the Ma-Afrika and Café Chameleon, ”he said in a shareholders statement on Monday (January 4).
“However, the company will continue with its request for authorization to appeal Ma-Afrika’s ruling in the Supreme Court of Appeals specifically in relation to the period of compensation,” he said.
While many local P&C insurers rejected the claims, saying that a global pandemic is not an insurable event, some companies have offered relief to clients and others have signed settlement agreements.
Insurance Claims Africa, the specialty claims preparation company that worked with Ma-Afrika Hotels and Stellenbosch Kitchen, has asked other insurers that are still blocking claims to pay customers.
“We all know this was a test case, not just for Santam but for all the insurers that refused to pay these claims,” said Ryan Woolley, ICA’s chief executive, in an emailed statement.
“By resolving valid claims expeditiously, they have the opportunity to contribute to the survival of companies in this critical sector and to the preservation of thousands of jobs.”
Read: South African Companies Win Covid-19 Case Against Insurers
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