Insurer Santam has responded to the Supreme Court of Appeal judgment in favour of Cafe Chameleon, after restaurant took its insurer, Guardrisk, to court for failing to pay out its business interruption insurance.
Santam said in a statement that it had taken note of the judgment.
The insurance giant explained in its statement that matters involving contingent business interruption (CBI) were complex in nature and required careful consideration.
“Santam will consider this judgment in assessing its potential impact on our own appeal involving Ma-Afrika Hotels and Stellenbosch Kitchen and also discuss the implications of the judgment with our reinsurers.”
Santam said while there were similarities between the Cafe Chameleon case and the Santam case, there were also material differences in the initial judgments handed down by the Western Cape High Court.
“Santam’s application for leave to appeal the Ma-Afrika judgment was scheduled to go before the Western Cape High Court on 8 December. However, the hearing did not go ahead, because the Ma-Afrika and Stellenbosch Kitchen legal team was not available to argue then or any other time this year. Santam is seeking an expedited date to argue the application early in the new year.”
According to the statement, the decision to appeal suspends implementation of the High Court judgment in favour of the policyholders.
“Due to the global nature and scale of CBI litigation and judgments, we will also consider the outcome of the appeal ruling anticipated early in the new year in the matter in the UK between the Financial Conduct Authority and Arch Insurance Ltd and others, which has been cited in various judgments by the South African courts.”
Santam maintained its commitment to achieving legal finality as soon as possible. In the meantime, Santam said it had paid out more than R1-billion in interim relief to assist nearly 2500 small- and medium-sized businesses in the hospitality, leisure and non-essential retail services that have CBI cover in their policies. These would be considered as advance payments against any finally determined claims if applicable.
The company said it had to date also committed up to R400-million in Covid-19 funding to provide relief through premium reductions, premium refunds, support to small, medium and micro enterprises in the industry, corporate social responsibility and government’s Solidarity Fund.