News Africa18 Jan 2021

South Africa:Biggest insurer to appeal COVID-19 indemnity period

18 Jan 2021

South Africa's largest general insurer Santam says that it appeal the COVID-19 insurance indemnity period to the Supreme Court of Appeal (SCA).

The company has said that it will offer its hospitality and leisure customers a “full and final” settlement to cover three months of losses that arose as a result of the COVID-19 pandemic, reported African News Agency. This is despite the fact that many policyholders have cover than runs for six, 12 or 18 months.

In November, the Western Cape High Court ordered the insurer to pay plaintiffs Ma-Afrika Hotels and Stellenbosch Kitchen for the impact of COVID-19 over the entire policy period of 18 months, without limitations.

Santam said on 4 January that it “respects the decision of the courts and believes that the recent judgments are sufficient to provide legal certainty” of the cause of business interruption losses. But it added that there are “valid reasons to appeal the judgment of the Western Cape High Court in the Ma-Afrika case with respect to the indemnity period.

The case is being watched closely because the tourism and hospitality sector employs over 740,000 people directly in South Africa and a further 1.5m jobs indirectly.

Insurers, which had opposed making compensation for business interruption losses suffered by policyholders, had argued in vain that it was the government-imposed lockdown, and not COVID-19, that caused the losses. The courts found that the two events are linked: a lockdown would never have occurred without COVID-19.

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