Santam loses appeal in coronavirus case with hotelier

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(Reuters) – 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 to ‘a shorter time limit for the claim, Santam said Thursday.

Globally, companies like Ma-Afrika are fighting against insurers’ rejection of claims made under their business interruption policies after being forced to close as the pandemic set in. In South Africa, insurers have said their policies do not cover national lockdowns.

The court had already ruled that Santam was required to pay Ma-Afrika’s claim. Santam accepted the decision but appealed the compensation period, arguing that she should only be responsible for three months.

Santam said Thursday’s ruling also affected some policies structured similarly to the one owned by Ma-Afrika, but noted that they represented less than a third of the 3,200 such claims she had received.

“Santam will now finalize the claims which are directly impacted by the (…) judgment,” said the insurer.

He did not expect any change from an estimate made in June that claims would cost him 1.7 billion rand ($ 114 million), based on what he had already paid and what ‘he could recover through reinsurance.

The insurer has already made 2.1 billion rand payments related to such claims.

Insurance Claims Africa, 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 ruling in this case is crucial for thousands of Santam policyholders (…) for business interruption,” said Ryan Wooley, CEO of the ICA.

The case has been closely watched by relevant companies and insurers across the industry and is seen to provide great clarity on the obligations of insurers in this matter in South Africa.


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