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One of the many innocent victims of Covid-19 is the South African restaurant and hospitality industry. Virus containment measures have taken a massive toll on small businesses, and for several months now business owners have been having it out with short-term insurers over business interruption payouts. Santam, Guardrisk and other big companies – including global insurers – have been refusing to cover claims for the loss of revenue caused by government-enforced closures.
After a lengthy legal battle and a R2bn victory, three insurers – including Santam – are finally paying up. However, Santam has only offered to pay up to three months of business interruption cover, which is not what was agreed when many of its clients signed up for insurance.
In a recent BizNews interview, small business owner Meg Fargher of Budmarsh Country Lodge in Magaliesberg, explained how Santam has ducked and dived on paying out for business interruption cover. It’s taking a huge toll on her business as she has to carry on paying her business interruption cover to Santam – without a steady income – or she will automatically lose the right to claim the insurance.
“We had business interruption insurance and one of the extensions was specifically for contagious disease, within a 50km radius of your premises. Well, thank goodness. We’ve got this very specific contagious disease cover. We phoned our broker who said, ‘we’re so relieved you’ve actually got this extension, you guys are going to be fine’. We spoke to someone at Santam who said, ‘just give us the weekend, we’ll have it all sorted’.
We actually felt quite safe. So after the Easter weekend, they came back and said ‘no, we’re not going to pay you out’. The gist of the email was, ‘if you don’t like our decisions, sue us in a court of law’.
I hope that South Africans don’t forget that Santam has not risen to the occasion. It’s been a seven-month runaround. We are still waiting for Santam to honour the business interruption claim and of course, they’re waiting for more and more of us to fall. Then they don’t have to pay out.”
BizNews readers are furious, calling for Santam to honour its side of the contract and for South Africans to boycott the insurer.
“No umbrella for SANTAM policy holders. It’s a hoax. Umbrella for sunshine days and no umbrella or cover for rainy days. Pending the court outcome perhaps SA consumers and business should consider boycotting SANTAM and move to competitors,” comments
South Africans need to stand together and put Santam out of business. They won’t support their paying customers in their most hectic time of need, then we cannot support them. If anyone has a Santam policy of any sort they should cancel it and find another provider. Teach them a lesson that no other insurance company will ever forget.”
I was a Santam client for [email protected] and vehicle insurance for 25 years!
Cancelled it on 5 January as i cannot do business with a company doing what Santam is doing ito Business interruption insurance! No moral standard and NOT doing what is RIGHT!
— Taxpayer (@Taxscheme101) January 12, 2021
You pay for this risk cover for years and when the time comes to pay it’s disputed..the real issue Mr Hogg that needs addressing, should co’s make provisions/reserve in their B/sheet for business interruption and get a tax write off as it would reduce impact on state.comments
— dotherighthing (@Dothrrighthing1) January 13, 2021
had the following to say:
SANTAM: ‘Insurance good and proper.’
Andrewa: ‘Yeah, Right.’
When it comes to insurance, if you fool me once, shame on you. But if you think you are going to fool anyone with even two functioning brain cells, twice, you are an idiot. Small claims court worked for me, thank goodness, so ‘see you in court’ didn’t work out so well for the big legal guns as they aren’t allowed as it wasn’t a large claim. So never again, Santam!
Easy answer. Boycott SANTAM’s sorry ass. There are plenty alternatives out there
— Mac Mac (@dallasmcfarlan4) January 12, 2021
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