A case of the greatest importance for the hospitality and tourism sector, on the one hand, and the insurance sector, on the other, is to be heard by a full bench of the Western Cape High Court on Tuesday. The case is Ma-Afrika Hotels and the Stellenbosch Kitchen restaurant versus insurance group Santam. Ma-Afrika and Stellenboch Kitchen are supported by public loss adjustment company Insurance Claims Africa (ICA).
The cause of the case is the refusal of Santam to pay out business interruption claims to Ma-Afrika and the restaurant for the interruptions to their businesses caused by the Covid-19 pandemic. Santam and most (but not all) other insurers have been claiming that the business interruption was caused by the government-imposed national lockdown, and not by the pandemic. ICA is representing more than 700 hospitality and tourism businesses attempting to get their insurers to pay out their claims.
“We believe this is a watershed test case in which the judgment will have far-reaching implications across the entire insurance industry,” affirmed ICA CEO Ryan Woolley. “It’s also a critical case for all claimants in the tourism and hospitality sector, for whom the failure of their insurers to pay their legitimate claims has had a devastating impact on their businesses and their employees. It has impacted people’s lives in the most profound and destructive way.”
“The truth is that Santam and other large insurers in South Africa have lost their moral compass, their credibility and their decency,” charged Ma-Afrika Hotels COO Elna du Toit, whose company employed 210 people. “It’s a travesty that we are having to go to court to fight what is due to us. If there’s one thing that Covid-19 has shown the tourism and hospitality sector, it’s that when it comes to insurers, they will promise you the Earth to get your premiums, but will let you down when you need them most.”
“It’s not only Santam in the dock tomorrow but also a rogue’s gallery of insurance companies, which includes Old Mutual Insurance, Hollard, GuardRisk, Bryte, Thatch, F&I, TRA, Lombard, AIG, CHUBB, and Monitor,” asserted Woolley. “Like Santam, all these companies have rejected these claims and are waiting to see what the court decides.”
ICA pointed out that the country’s hospitality and tourism sector provided more than 740 000 direct and 1.5-million indirect jobs. It was a sector “vital” to the economy. “ICA believes that the decision taken by the courts will be precedent setting and will reverberate through the insurance industry for years to come,” he stated.