Virus-related claims from just over 500 small South African firms battling insurers who have rejected them are worth up to 4 billion rand ($232 million), the firm representing the businesses has calculated.
Loss adjustment firm Insurance Claims Africa (ICA) is pushing a host of big South African insurers including Santam , Old Mutual, Hollard and HIC Underwriting Managers to make payouts under business interruption policies sold to its clients.They are firms in the hospitality and tourism industry now on the cusp of closure after virus restrictions brought their businesses to a standstill.
Faced with national lockdowns, unprecedented during peacetime, small businesses around the world have turned to their insurers hoping such business interruption policies will cover losses and help them survive the crisis.
But in countries including Britain and the United States some of these claims have been rejected, prompting lawsuits or forcing regulators to step in to the fray.
Ryan Woolley, ICA CEO, told journalists on Wednesday that its calculations showed the claims by the firms ICA is representing amounted to between 3.5 billion rand and 4 billion rand, though it had offered the relevant insurers reduced amounts to settle the matter.
“We will continue to discuss it with all the insurers,” he continued, though he said ICA would launch legal action against Santam and HIC and could do the same against several others.
Santam and Old Mutual said that even where a client has taken out protection against contagious or infectious diseases, these do not cover the impact of national lockdowns.
The insurers added that they cannot consider a settlement for a select group of clients that would not equally apply to all impacted policyholders.
“It is important that we obtain legal certainty as quickly as possible on the policy interpretation applied by Santam and other insurers,” Santam added.
Guardrisk, a subsidiary of Momentum Metropolitan that underwrites HIC’s insurance business, also said it could only consider claims on a case-by-case basis and that it was in the process of arranging a meeting with ICA.
Hollard did not immediately respond to emails requesting comment.