JOHANNESBURG - Specialist public loss adjuster Insurance Claims Africa has slammed insurer Santam’s decision to limit settlement offers relating to Covid-19-linked business claims to just three months, pending the outcome of its appeal at the Supreme Court over the indemnity period.
In a statement dated Tuesday, ICA said after almost seven months of legal wrangling over Santam’s refusal to pay its customers business interruption claims linked to the pandemic, Santam had conceded it was liable and would begin assessing claims.
“However, Santam has said it will offer its hospitality & leisure customers a full and final settlement of only three months of losses, despite many policyholders having indemnity periods of six, 12 and 18 months in their contracts with the insurer,” ICA said.
The indemnity period is the time for which policyholders can claim for losses.
ICA chief executive officer Ryan Woolley noted that Santam had a judgment against it whereby it was ordered to pay hotel group Ma-Afrika for the full indemnity period of 18 months. Santam said in November it would apply for leave to appeal the judgment of the Western Cape High Court at the Supreme Court of Appeal (SCA).
In Tuesday’s statement, Woolley said the only way for Santam to treat its clients fairly “is to offer an interim payment of three months, and leave the balance to be dealt with after the SCA appeal”.
““By offering three months in full and final settlement, and forcing their customers to sue them for the balance is grossly unfair and unconscionable. These actions suggest that it is no longer legal certainty that Santam seeks, but that it is in fact trying to take advantage of vulnerable clients who are desperate for funding.”
Santam and other insurers have argued that a government lockdown imposed in response to Covid-19, rather than the virus itself, has caused losses for businesses.
The courts have however found that the two were linked, pointing out that a lockdown would never have occurred without Covid-19.
Woolley said the insurance industry had turned its back on thousands of businesses which had bought interruption policies including cover for infectious, contagious and notifiable diseases.
He said the tourism and hospitality sector, which employs 1.5 million people and contributes 8.6 percent to the South African economy, had all but collapsed as the country continued to buckle under the strain of the coronavirus pandemic.
Thousands of jobs had been lost, families destroyed and businesses forced to close their doors, a consequence that could have been avoided if insurers had met their legal obligations to their customers, he argued.
African News Agency