Santam to apply to appeal against Covid-19 business interruption judgment against it

20th November 2020 By: Rebecca Campbell - Creamer Media Senior Deputy Editor

Insurance group Santam announced on Friday that it was going to seek leave to appeal the recent judgment handed down against it by a full bench of the Western Cape High Court. The Court ruled that the insurance group must 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.

“Santam believes that the high court erred in its judgment regarding causation and the insured peril, the trends clause and the indemnity period, and it is therefore important to take the matter to the Supreme Court of Appeal,” said the insurer in its statement. “The significance of the [business interruption] matter to the insurance industry and the precedents at stake necessitate continuing to the next stage in the process of obtaining legal finality.”

The group reiterated 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. 

“We will continue to communicate regularly through our intermediaries to update our clients on the status of individual claims, especially those impacted by this court case,” stated Santam. “We pursuing an expedited appeal process to ensure that we bring this matter to finality as soon as possible.”