Santam relents and agrees to pay out Covid-19 business interruption claims

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In November, a full bench of the Western Cape High Court found in favour of Ma-Afrika Hotels and Stellenbosch Kitchen against Santam after the insurance giant rejected their business interruption claims.

Santam announced on morning Monday that it would now settle valid claims for all commercial policies with contingent business interruption extensions, in addition to those covered by its hospitality and leisure division that it agreed to settle earlier in January, that had been specifically affected by court judgments.

The court ordered Santam to pay the full business interruption losses, including the impact of the government’s response to Covid-19 over the entire policy period of 18 months, without limitations, as well as Ma-Afrika’s legal costs.Ma-Afrika Hotels and Stellenbosch Kitchen approached the court for two declaratory orders:

However, the court concluded that Covid-19 and government’s response to it were inseparably part of the same insured peril. In the court’s view, the losses Ma-Afrika hotels and Stellenbosch Kitchen suffered were exactly what they had insured themselves against and had to be put in the position that they would have been in had the insured peril not occurred.

 

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