The Western Cape Excessive Courtroom has dominated in favour of Ma-Afrika Resorts and Stellenbosch Kitchen within the high-profile COVID-19 enterprise interruption (BI) claims battle towards South Africa’s largest non-life insurer Santam.
The 2 entities have joined with loss-adjusting firm Insurance coverage Claims Africa (ICA) in litigation towards Santam which had refused to settle their BI insurance coverage claims despite the fact that their insurance policies included cowl for infectious or notifiable ailments.
In a 42-page judgement handed down on 17 November, the courtroom discovered that Santam was liable to pay for BI losses associated to the pandemic lockdown. The judgement ordered the insurer to pay Ma-Afrika for the impression over the coverage interval of 18 months, with out limitations. It additionally ordered that Santam ought to pay Ma-Afrika’s authorized prices.
In keeping with the judgement, the mixed complete of BI cowl for lack of income beneath 4 insurance policies held by Ma-Afrika Resorts, and one other coverage held by the restaurant, amounted to ZAR122.43m ($7.9m).
Whereas Santam is more likely to observe its business friends akin to Guardrisk in interesting the same ruling by taking its case to the Supreme Courtroom of Attraction (SCA), this newest judgement represents one more blow to short-term insurers not eager to pay out such claims.
In the previous few months there have been a variety of authorized and regulatory actions which have offered extra certainty that insurers are accountable for BI cowl, the place it contains insurance coverage towards infectious and notifiable ailments, stated media experiences. For instance, in July, the Western Cape Excessive Courtroom, within the matter of Cafe Chameleon v Guardrisk, rejected the insurers’ argument that the losses suffered by the claimant was because of the lockdown. Guardrisk’s attraction of this matter shall be heard within the SCA on 23 November. ICA has partnered with Cafe Chameleon on this matter.
ICA CEO Ryan Woolley stated, “The Ma-Afrika judgement has arrived in time to supply the SCA with additional steering from revered Cape excessive courtroom judges. This can be a matter of nationwide significance and the judgement reiterates the necessity to defend the patron from insurers attempting to alter the phrases of the contract publish loss.”