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After a R2bn victory against big insurers, more business owners are lining up to join the fight against Santam, Guardrisk and other big companies – including global insurers – to pay up for business interruption. Businesses in the hospitality and leisure sectors have been hit hard by Covid-19 containment measures and have been battling short-term insurers who have refused to cover claims for the loss of revenue as a result of government-enforced closures. After a lengthy legal battle, three insurers are paying up, with Santam issuing a statement on the Johannesburg Stock Exchange news service this week that it will do so in order to comply with recent court rulings. Ryan Woolley of Specialist public loss adjuster, Insurance Claims Africa (ICA), has been at the front of the battle against short-term insurers on behalf of smaller companies. He speaks about the latest developments – and what they mean for the many businesses that have lost income because they have been forced to close their doors to help stop the spread of Covid-19. – Jackie Cameron
Business interruption victory – and what’s next for SA insurers
- Courts have ruled that insurers are liable for business interruption. Guardrisk, Hollard and Santam have said they will start to pay up.
- Other insurers are in the sights of ICA – including multinationals that have refused to cover Covid-19 business interruption claims.
- The judgment was precedent-setting at the Supreme Court of Appeal, with the regulator – the Financial Sector Conduct Authority – in support of payouts so that insurers can restore credibility in their industry.
- Many businesses – in particular restaurants and hotels – have had to close; some can re-open but others that have not survived and will unfortunately not be eligible for payouts.
- Many businesses have had to survive for 10 months without income.
- The ruling has saved the majority of ICA’s 750 tourism and hospitality clients who have fought the goliaths of the insurance sector. For every one employee at these companies, 10 lives are impacted, says ICA.
- An estimated R2bn will be paid back to small companies in this first leg of the battle, though more company bosses from other sectors have stepped forward to push for pay-outs.
- ICA CEO Ryan Woolley asks: Where are the consequences for lawyers who have ‘tortured’ small business owners on behalf of insurers?
- ICA still has a dispute with Santam in connection with the period that that the pay-out should cover. Santam only wants to cover 3 months of business interruption, while ICA says the period is up to 18 months, for some clients.
- Businesses in other sectors have come forward, demanding money from insurers – including Johannesburg-listed Santam and other publicly listed companies.
* Santam bosses declined a request for an interview on the business interruption insurance matter.
For more on the business interruption insurance battle:
- Santam begins processing rejected business interruption claims, will appeal Ma-Afrika ruling
- Explosive case against Santam: Here’s why it MUST pay for Covid-19 business claims
- Business interruption insurance expert Ryan Woolley on Covid-19 court victory
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