Business | Business News
Insurance giant Santam announced earlier on Monday that it would start the process to assess claims for business interruption, but it would still appeal the indemnity period after the recent judgment in the Western Cape High Court that ordered the company to pay the claims from Ma-Afrika Hotels and The Stellenbosch Kitchen.
Santam said in a statement that although it respected the decision of the courts and believed the recent court judgments provided legal certainty about the proximate cause of business interruption losses for similar policies, it also believed there were still valid reasons to appeal the indemnity period.
Santam did not indicate what these reasons were.
ALSO READ: Court orders insurance giants Santam to pay business claims
The Ma-Afrika judgment found that there was cover for business interruption losses caused by Covid-19 itself, as well as generally by the national lockdown and related restrictions, provided that Covid-19 infection happened within the designated radius of the insured premises. This approach was confirmed by the Supreme Court of Appeal (SCA) decision in the Cafe Chameleon court case.
The claims assessment process would specifically apply to policies impacted by the high court judgment, as well as the judgment of the Supreme Court of Appeal (SCA) in the case between Cafe Chameleon and Guardrisk Limited, where Guardrisk was also ordered to pay out claims.
The process will include assessments for the applicable hospitality and leisure division business interruption claims previously rejected after the national lockdown began on 27 March last year.
ALSO READ: Appeal court rules – insurer Guardrisk has to pay Cafe Chameleon’s full claim
Santam said the assessment process required businesses to provide audited financial statements and other documentation to support their claims and it had previously advised brokers of these requirements. The insurer urged clients to work closely with their brokers to ensure that the requirements were met.
Amounts paid as part of the R1-billion relief to insured businesses would be offset against valid claims arising from the assessment process.
According to the statement, Santam had already paid out more than R1 billion in interim relief to nearly 2500 small and medium-sized businesses in the hospitality, leisure and non-essential retail services industries.
Santam said it also committed up to R400 million in Covid-19 funding to provide relief through premium reductions, premium refunds, support to small, medium and micro enterprises (SMMEs), corporate social responsibility and contributing to the Solidarity Fund.
ALSO READ: Santam reacts to appeal court’s Cafe Chameleon-Guardrisk judgment
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