Business Interruption Insurance Update: Insurers Respond


FEDHASA, the leading voice of hospitality in South Africa, understands that Guardrisk and Hollard have both acknowledged and accepted the Supreme Court of Appeal precedent-setting ruling on 17 December, which ordered Guardrisk to settle Café Chameleon’s full claim and legal costs.

Insurance Claims Africa, which represents over 740 BI claimants in the tourism, hospitality and leisure space, has issued a statement confirming that both have agreed to start processing claims with the same terms as that in the SCA ruling.

FEDHASA urges both Guardrisk and Hollard to be honourable in expediting the settling of these claims urgently, and not to prolong the agony of their claimants, some of whom are struggling to stay afloat due to the ramifications of the current COVID outbreak.

We are disappointed, however, that other Insurers like Santam have taken the decision to continue to ignore their responsibility to settle valid claims, citing that additional legal certainty is required – an excuse that Santam has used several times.

Santam claims that its case against Ma-Afrika is materially different, which is in direct contradiction to its earlier position when it wrote to the SCA asking to join the Ma-Afrika appeal stating at the time: “while there are small differences in the policy wording in both matters, the issues being dealt with are very similar”.

It is also noteworthy that, at Santam’s AGM on 7 July, the Insurer’s board reassured shareholders that, should it be required to pay out on COVID-related claims, its balance sheet would be fine.  The same cannot be said for the many hundreds of claimants desperately waiting for Santam to make good on the court’s ruling ordering them to pay out on Business Interruption cover.

It is difficult to reconcile these actions with the commitment from the Insurer’s CEO Lize Lamprechts when she affirmed that Santam is “absolutely committed” to playing its part to “help alleviate some of the devastating impacts of this virus”.

FEDHASA calls on Santam to go beyond lip-service and play its part in alleviating some of the devastating impacts of the virus by simply complying with the SCA’s precedent-setting ruling.

Our industry will not easily forget how Santam has responded to its loyal hospitality customers during the pandemic. For many months, it has used the excuse of requiring legal certainty to justify its decision not to pay what is due to clients which are have had to endure incredible hardship during the COVID lockdown and had duly paid their premiums for this very situation.

Now that legal certainty has been obtained, tested in the SCA and resulted in a precedent-setting ruling, FEDHASA asks of the Insurer: When will Santam acknowledge that sufficient legal certainty has been provided to settle its claims?

Santam and other Insurers which doggedly maintain their position of seeking additional legal certainty when such has clearly been provided have only a limited window of opportunity to ensure their reputations are not further damaged. Trust is not something a future marketing campaign or special offer can restore.

FEDHASA has been outspoken in the press on behalf of its members regarding the Business Interruption insurance issue and will continue to lobby on your behalf as the leading voice of hospitality in South Africa.

We will advise as more news unfolds, but in the interim, you can review FEDHASA’s view on the Business Interruption Issue in the Media here:

Press Release: FEDHASA calls on Insurers to ‘do the right thing’ with legal certainty provided

Cape Argus: 10k signatures collected in petition against insurers over business claims

Cape Talk: Delays in business interruption claims payouts – FEDHASA responds

Cape Talk: Stop stalling on COVID payouts FEDHASA tells insurance firms

Fin24: Could lockdown insurance saga leave some hospitality and tourism claimants insolvent?

Lockdown claims are capped and won’t cripple insurers, say claimants

City Press: Insurance firms must pay up now

Fin24: Is the lockdown claims saga a body blow to the insurance sector’s credibility?


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