Santam has offered to pay up to three months of business interruption cover but that’s not the deal that was agreed when many of its clients signed up for the insurance. Meg Fargher, co-owner of 18-room five-star boutique hotel and fine dining establishment Budmarsh, in the Magaliesburg, has been fighting to preserve the jobs of more than two-dozen staff after Covid-19 disruption hammered the business. In this interview, she tells the story of how Santam has ducked, dived on paying out for business interruption cover. To add insult to injury, and also stress levels, while she tries to keep the place running with no income, she has to keep paying her business interruption cover to Santam – or she will automatically lose the right to claim the insurance. This is a story that is playing out across South Africa as small businesses struggle to survive the pandemic. – Jackie Cameron
Santam to start processing business interruption claims in wake of court rulings
6 January 2021 8:31 PM
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Santam finally accepts it s liable for contingent business interruption claims. Wendy Knowler on the pandemic s insurance sagas.
Insurance companies refusal to pay business interruption claims related to the Covid-19 pandemic has seen a slew of cases taken to court.
According to the argument put forward by some insurers it s the lockdown and not the pandemic itself that led to clients business interruption.
The only short-term insurer which initially paid out claims with no quibble. was OUTsurance. They admittedly did have a very small slice of that particular pie, but they got a lot of kudos for doing that.
Stop stalling on Covid payouts Fedhasa tells insurance firms
22 December 2020 3:08 PM
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Last week the High court ruled that Santam should pay its client s business interruption claims.
There cannot be a more urgent time for insurers to pay out businesses for losses due to the Covid-19 lockdown.
That from the chairperson of the Federated Hospitality Association of South Africa (Fedhasa) on Tuesday.
Last week the High Court ruled that Santam should pay its clients Ma-Afrika Hotels and The Stellenbosch Kitchenâs business interruption claims.
Despite the significance of the ruling Anderson says there have still been delays to the payouts of business interruption cover.
Santam reacts to appeal court’s Cafe Chameleon-Guardrisk judgment Ina Opperman The insurer said while there were similarities between the Cafe Chameleon case and the Santam case, there were also material differences.
Insurer Santam has responded to the Supreme Court of Appeal judgment in favour of Cafe Chameleon, after restaurant took its insurer, Guardrisk, to court for failing to pay out its business interruption insurance.
Santam said in a statement that it had taken note of the judgment.
The insurance giant explained in its statement that matters involving contingent business interruption (CBI) were complex in nature and required careful consideration.
The lockdown – and not government action – resulted in business closures and losses, which means short-term insurers will now have to pay their clients. On Thursday 17 December the Supreme Court of Appeal (SCA) ruled in favour of Cape Town restaurant Café Chameleon in its case against insurer Guardrisk.
The ruling, made with a costs order, was welcomed as precedent-setting because it could close the door on the controversy around the business interruption (BI) insurance claims. But for insurers, it’s a potentially ruinous lesson about shoddy underwriting as it will set them back billions of rand – and could open the floodgates for further claims.