BUSINESS MAVERICK: Santam finally concedes defeat in business interruption insurance battle

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After four losses in the high court and one appeal at the Supreme Court, Santam has finally conceded its liability for contingent business interruption claims. It has taken 10 months for SA’s biggest short-term insurer to buckle under pressure from the courts and the public.

On Monday, 4 January, Santam announced that it would process and pay all valid business interruption claims in line with recent court rulings – including claims it had previously rejected.

Hollard, too, said it would abide by the ruling and start processing the claims, but Santam remained obstinate, saying matters involving contingent business interruption were “complex in nature and require careful consideration”.

“The Ma-Afrika judgment resolved 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 Supreme Court of Appeal decision in the Café Chameleon court case confirmed that approach,” the statement read.

Santam has already paid out more than R1-billion in interim relief to nearly 2,500 small and medium-sized hospitality, leisure and non-essential retail services industry businesses with contingent business interruption cover in their policies. Santam said it respected the decision of the courts and believed the recent judgments provide legal certainty in terms of the proximate cause of business interruption losses for policies “with the same conditions, characteristics and circumstances” as the Ma-Afrika and Café Chameleon judgments.“We’ve geared up for this by assigning additional loss adjusters and other staff with the necessary skills to keep the process as efficient as possible.

“We’re concerned about the indemnity period. We hope they will make payments in full, pending legal certainty.”

 

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Santam, taken kicking and screaming, by the Regulator FSCA_ZA and Courts to pay, shameful. NotSoGoodAndProperAfterAll InsurersFailTourism SantamInsurance

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