Santam to face flood of litigation in court due to business interruption

Santam faces a litany of urgent court applications for flaunting the regulatory board’s warning and  refusing to pay out valid Covid-19 claims.

Media release

A flood gate of final demands have been issued on Friday and on Saturday  against insurance giant Santam in respect to ‘”Business Interruption”’ claims from insured  business owners and respondents across South Africa that Santam refuse to pay out despite the insurance regulatory authority’s direction to do so.  All business owners that served Santam with final demands  are prepared to take the insurer to court on an urgent basis should the insurer not asses sand pay out their claims the FSCA have deemed valid in the next seven days.

This also comes in the wake of the recent of Santam’s fellow insurer Guardrisk’s loss against a Cape town restaurant in the Western Cape High court whose claim was repudiated  based on the same principle that Santam is using not to honour its obligations to its clients.

Owner of Bellezar Restaurant, in Umhlanga, Duncan Heafield has said that Santam’s lack of empathy and disingenuous play on words in order repudiate his and over 2,000 other Santam claimants across country wide is basically like holding  a barrel of the gun against heads of those hospitality establishments trying in the current climate to purely survive.

“We have also already seen the mass effects of the carnage in the hospitality industry due to the current government regulations and Santam might as well convert our current policies into those of  funeral cover as their repudiations has tantamount to putting the final nails into the coffins for  already ailing and dying hospitality businesses’’. “’We have already seen actual suicides and closures of business take place ( not to mention mass unemployment that has ensued, and all as a direct cause of the many of the insurers dragging their feet and not treating  insured fairly by paying out their rightful claims during the midst of this pandemic.

Durban Law Firm RMB Attorneys who have taken on the mammoth task to fight the 5 main insurers has confirmed that they are currently representing approx 300 claimants on a contingency basis against insurance giants that include Santam, Old Mutual, Hollard, Bryte and Guardrisk.

They also confirmed that he is currently in discussions with other institutions who represent another 200 claimants  to combine their legal efforts against the insurers into one massive class action suit.

RMB’s principal Ryan Botisis, added that the attitude and stance of the insurers is totally unsympathetic and unconscionable to the needs of their customers that have for years supported them unconditionally. ‘’Now that their clients need their cover, the insures are doing everything in their power to renege on their obligations’’ ‘’Our mandated clients range from fast food franchises, luxury game lodges to big restaurant and hotel groups, all who have seen their insurer let them down diabolically  in their time of need” he added.

The FSCA who is the regulatory body of the insurance industry has made it was very clear in their directive issued last week that insurance companies must stop coming up with lame excuses to not pay its claimants with valid claims.

To date only OUTsurance has been proactive and paid out its Business Interruption Claims setting aside R220m to settle these claims.

On Friday the Prudential Authority issued a statement reiterating the FSCA’s stance that the Covid-19 pandemic and the claims arising from it pose little systematic risk to the local insurance industry further bolstering the FSCA’s warning that the insurance industry must stop broadly rejecting claims from businesses related to the lockdown.