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.
SCA rules against insurer in Covid-19 claim case Updated
Anastasi Mokgobu
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The Supreme Court of Appeal (SCA) has on Thursday dismissed Guardrisk’s appeal in its battle against the Cape Town restaurant ‘Cape Chameleon’.
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This comes after Guardrisk appealed the decision of the Western Cape High Court that it must pay Café Chameleon’s Covid-19 claim.
The SCA has now dismissed the appeal and ordered Guardrisk to settle Café Chameleon’s full claim and legal costs.
The central question was whether the government’s imposition of a lockdown in response to Covid-19, throughout the country and in Cape Town, where Café Chameleon’s operates its business, was covered by the infectious diseases clause.