Insurance group Santam has stated that it “has taken note” of the ruling by the Western Cape High Court that the insurance group pay in full the business interruption claims of Ma-Afrika Hotels and Stellenbosch Kitchen, and also pay all of the claimants’ legal costs. The business interruption had been caused by the Covid-19 pandemic and the consequent government-imposed national lockdown. Despite the claimants having infectious and notifiable disease coverage in their policies, Santam had refused to pay out their claims.

“The detailed and complex nature of the judgment, as well as its broader implications, means that it needs to be carefully considered,” said Santam in its statement. “It will also be important for Santam to discuss the implications of the judgment with all our stakeholders, including reinsurers, in order to arrive at a comprehensive response.”

The company stated that it had paid more than R1-billion to nearly 2 500 of its small and medium-sized business clients in the hospitality, leisure and non-essential retail sectors. This was interim relief to support them while the legal processes were under way. 

Further, as a response to Covid-19, it had committed up to R400-million in various relief programmes. These comprised reductions in, and refunds of, premiums, and direct support for its business partners in the insurance industry, as well as funding for corporate social responsibility and government initiatives. 

“The issues pertaining to [business interruption] are global in nature and are also subject to appeal court proceedings in various countries,” stated Santam. “The response of the global reinsurers, which are in effect insurers to the insurer, is important in helping us to reach finality on this matter. We do understand that all parties need finality as a matter of urgency and therefore remain committed to doing our utmost to ensure that we achieve that as quickly as possible.”