JOHANNESBURG – South Africa’s Supreme Court of Appeal has ruled that Santam is likely to cover the impact of COVID-19 restrictions on the Ma-Afrika hotel group for 18 months, denying the insurer’s claim for a shorter time frame for the claim, Santam said Thursday.
Globally, companies like Ma-Afrika have fought insurers’ rejection of claims under their business interruption policies after being forced to shut down as the pandemic took hold. In South Africa, insurers have said their policies do not cover national closures.
The court had already decided that Santam was required to pay the debt of Ma-Afrika. Santam has accepted the decision but has appealed the compensation period, arguing that it should be responsible only for three months.
Santam took note of Thursday’s ruling, adding that it also affects some policies structured in a similar fashion to the one owned by Ma-Afrika, but that these accounted for less than a third of the 3,200 such claims it has made. she had received.
“Santam will now finalize the claims which are directly impacted by the… judgment,” he continued.
He did not expect any change from an estimate made in June that claims would cost him R 1.7 billion, based on how much he had already paid and what he could recoup through reinsurance. , he added.
The insurer has already made 2.1 billion rand in payments related to such claims.
Insurance Claims Africa (ICA), a claims adjuster representing Ma-Afrika and other companies in dispute with their insurers over the matter, said in a statement that Ma-Afrika won the “last part of the battle” with Santam .
“The court’s decision in this case is critical for thousands of Santam business interruption insurance policyholders,” said Ryan Wooley, CEO of CIA.
The case has been closely watched by relevant companies and insurers across the industry and is seen as providing great clarity on the obligations of insurers in this matter in South Africa.
($ 1 = R14.9143) (Reporting by Emma Rumney edited by Mark Potter and Steve Orlofsky)
Photograph: Empty streets during the coronavirus lockdown in Cape Town, South Africa, April 6, 2020.
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