UK ruling positive development for SA claimants

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The UK High Court’s recent clarification, that the Covid-19 pandemic and the government lockdown and public response were a single cause of the covered loss, is a positive development for South African claimants.

According to the UK’s Financial Conduct Authority (FCA), the court found in favour of the policyholders regarding most of the key issues. The FCA asked the High Court for a ruling on how a representative sample of business interruption policy wordings respond to Covid-19 related losses.

The FCA says the test case has removed the need for policyholders to resolve many key issues of contractual uncertainty and causation individually with their insurers. It is not clear if the insurers will lodge an appeal.

“The UK case was based on business interruption policy wording that is very similar to the policy wording used in South African insurance policies, that it includes cover for notifiable infectious and contagious diseases,” says Ryan Woolley, CEO of Insurance Claims Africa (ICA).

ICA is the public loss adjustment company representing over 700 businesses in the SA tourism and hospitality sector to get large insurers to pay out.

“Although the UK decision does not set legal precedent in South Africa, it is a strong and positive new guide in favour of South African claimants.”

Woolley says ICA’s message to South African insurers remains the same: come and talk to us about reaching a swift sensible settlement for the affected businesses.

“The South African insurers have consistently said they require legal certainty in order to honour their customers’ claims. In July they were instructed to pay by the Financial Services Regulatory Authority (FSCA) and in the same month the Western Cape High Court rejected the insurers’ argument that the losses suffered was due to the lockdown and not the Covid-19 pandemic.

“The question is, are the South African insurers, which include Old Mutual, Guardrisk, Santam, Bryte, Hollard, F&I, Chubb, TRA, Lombard, AIG and Monitor, looking for certainty or a way out of their obligations towards their customers?”

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