Santam must cover 18 months of Covid-19 BI claims

South Africa’s Supreme Court of Appeal has ruled that the country’s biggest short-term insurer Santam is liable to cover the impact of Covid-19 restrictions on hotel group Ma-Afrika for 18 months, rejecting the insurer’s request for a shorter timeframe on the claim.

Ma-Afrika had been fighting insurers’ rejection of claims made under their business interruption policies after they were forced to close as the pandemic took hold.

South African insurers said their policies did not cover national lockdowns.

The court had already ruled Santam was liable to pay Ma-Afrika’s claim. Santam accepted the ruling then but appealed the indemnity period, arguing it should only be liable for three months.

In response to the ruling, Santam said it also affects certain policies structured similarly to the one held by Ma-Afrika but that these made up less than a third of the 3,200 such claims it had received.

“Santam will now finalise the claims that are directly impacted by the… judgment,” it said in a statement.

It did not expect any changes to an estimate made in June that claims would cost it ZAR1.7bn ($113.6m), based on those it had already settled and what it could recoup via reinsurance, it added. The insurer has already made ZAR2.1bn in payments related to such claims.