Santam to assess rejected Covid-19 insurance claims

Santam says that it will begin assessing some rejected coronavirus-related claims after a recent court ruling ordered South African insurers to pay for businesses interruption losses..

The ‘Ma-Afrika’ judgment held that there is cover for business interruption losses caused by Covid-19 itself and generally by the national lockdown and related restrictions imposed by government in response to the pandemic, provided that there was an occurrence of Covid-19 within the designated radius of the insured premises.

The judgement, which was handed down in November 2020, aligns with the approach of the UK Financial Conduct Authority in settling business-interruption claims 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 in terms of the proximate cause of business interruption losses for policies with the same conditions, characteristics and circumstances to the Ma-Afrika and Café Chameleon judgments,” it said in a shareholder statement on Monday (4 January).

“The company will however continue with its application for leave to appeal the Ma-Afrika judgment at the Supreme Court of Appeal specifically regarding the indemnity period,” it said.

While many local property and casualty insurers rejected claims, saying a global pandemic is not an insurable event, some companies offered relief to clients and others have entered settlement agreements.

Insurance Claims Africa, the specialist claims-preparing company that worked with Ma-Afrika Hotels and Stellenbosch Kitchen, has called on other insurers still blocking claims to pay out customers.

“We all know that this was a test case, not just for Santam but for all insurers refusing to pay these claims,” Ryan Woolley, ICA chief executive officer, said in an emailed statement.

“By settling valid claims expeditiously, they have the opportunity to contribute to the survival of businesses 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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Santam to assess rejected Covid-19 insurance claims