FILE PHOTO: Old Mutual offices in Cape Town.
FILE PHOTO: Old Mutual offices in Cape Town.

Old Mutual Insure set to provide business interruption support

Time of article published Jul 30, 2020

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By Philippa Larkin

JOHANNESBURG - Old Mutual Insure said yesterday that it would provide business interruption (BI) support to its small and medium enterprise (SME) customers across all industries.

“These SMEs have been hard-hit by the lockdown and are less likely to have the financial resources to survive the lockdown.

"We will make commercial settlements to compensate our customers, with an annual sum insured of R5million or below, for their BI losses based on specific criteria to enable them to continue operating during this difficult time,” it said. The insurer said the settlement applied to all its qualifying SME customers who had the infectious disease extension at the time of loss.

The announcement comes after some of the country's biggest insurers this month reached an agreement with the Financial Sector Conduct Authority, the Prudential Authority and some major insurers on interim relief for business interruption claimants.

Santam at the weekend set aside a R1billion relief fund for potential business interruption claims from its policy holders.

Old Mutual Insure estimated that these financial settlements, combined with already submitted BI claims, would amount to more than R650m and provide settlement for half the customers with the infectious disease extension.

However, it added the caveat that Old Mutual Insure was “still of the view that a suspicion or the general widespread occurrence of Covid-19 in the area or any steps taken by the government, as an example, to limit the spread of Covid-19 nationally, will not constitute an interruption or interference of the business under the infectious disease extension.”

The group was awaiting legal certainty.

“With regards to customers that do not qualify for the commercial settlement, our dedicated team of BI claims specialists continues to carefully consider their BI claims on a case-by-case basis,” it said.

BUSINESS REPORT

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