Cape Town – Insurance giant Santam has been told by the Western Cape High Court that it is liable for the losses of their its clients during the nationwide lockdown.
The court dismissed Santam’s argument that it should not be held liable for the effects of the global pandemic.
The judgment ordered the insurer to pay Ma-Afrika for the impact over the entire policy period of 18 months, without limitations. The court also ordered that Santam pay Ma-Afrika’s legal costs.
Ma-Afrika Hotel Group chief executive André Pieterse said: “We are grateful for the court’s decision in our favour. We are thankful to our legal team, led by advocate Jeremy Gauntlett QC SC, and the support from Ryan Woolley and the clients represented by Insurance Claims Africa (ICA).
This outcome will greatly assist in allowing ourselves and others in the tourism and hospitality sector to weather the ongoing Covid-19 storm.
“We are also grateful to Santam for the interim relief payments received in August 2020, which allowed us to retain our entire staff complement of 210 loyal people with more than 1 000 direct dependants.
“We are hopeful that this decision by the court will terminate the litigation, thereby bringing an end to the insecurity and suffering of many.”
ICA joined forces with hospitality group Ma-Afrika Hotels in its litigation against Santam, who had refused to settle their valid business interruption claims – even though they included cover for infectious or notifiable diseases.
Public loss adjustment company ICA is representing over 750 businesses in the tourism and hospitality sector in their battle to get large insurers to pay out on these claims.
ICA chief executive Woolley said: “Santam has consistently said that it requires legal certainty in order to honour their customers’ claims, and most other insurers have followed suit.
“In our view, today’s judgment from a full Western Cape High Court Bench provides the legal certainty required to finalise all claims relating to business interruption caused by the pandemic.
“We believe it is now time for the insurance sector to step up and display the ethical leadership that has been missing from their response to this crisis thus far,” said Woolley.
Ma-Afrika and Stellenbosch Kitchen were seeking about R122.4m through five policies.
The tourism and hospitality sector sustains over 740 000 direct and 1.5 million indirect jobs, and contributes 8.6% to the South African economy.
Since March, when the Covid-19 outbreak occurred, and the subsequent national lockdown, tourism and hospitality businesses suffered tremendous losses, with many forced to close, putting thousands of jobs at risk.
In a statement, Santam said it would discuss the implications of the judgment with its stakeholders, including reinsurers, in order to arrive at a comprehensive response.