Plea from restaurant industry to insurers: stop the nightmare before Christmas

Representatives of the restaurant industry are pleading with insurers to do the right thing and pay out their business interruption claims before Christmas and in doing so also save the industry. One of the insurers, Santam, has already been ordered to pay these claims by a full bench of the Western Cape High Court, but Santam is appealing the decision.

ALSO READ: Court orders insurance giants Santam to pay business claims

“Put your money where your mouth is, Santam,” Rosemary Anderson, MD of Stonehaven and national chairperson of Fedhasa, said during a webinar discussing the battle between restaurants and insurers who refuse to pay business interruption insurance claims.

Anderson pointed out that while restaurants can do without insurers, insurers cannot do without customers and warned that this matter could damage the reputation of insurance companies. Only Outsurance has thus far paid out a claim for business interruption.

She says people must remember that entrepreneurs borrowed against their homes and other assets to start up a coffee shop, restaurant or guest house. They are now losing their houses and other assets because they do not have an income.

“This damages the whole insurance industry. Santam took away the yellow umbrella of protection,” she says.

ALSO READ: UK ruling positive development for SA claimants

Everything is not better yet

She said that it is not a case of everyone doing better now that the country is on lockdown level 1. “Many big hotels are still closed and those that are open have only 20% occupancy.” Establishments still need the money they claimed to enable them to continue doing business.

Robert More, from More Family Collection echoed this, saying only his company’s lodges are open, while its hotels are still closed, which means that the company only operates at 40% capacity. He says he is hoping for more regional measures to contain the pandemic.

“Most of our customers are international visitors and we have only had a trickle of them. Our lodges have started getting full with about 50% international guests, but on the weekend we have noticed hesitancy among people who want to book.”

More says there is also a problem now that establishments catering for international visitors are shifting their focus to domestic tourism, taking away from those that focus on local visitors only.

Anderson echoed this, saying that international travelers are concerned that they could end up being stuck in South Africa. “However, people also have pandemic fatigue, which is why self-catering establishments along the coast are so busy. There are also many specials to get business coming in.”

Impact on staff

Staff in the industry has also been affected. More says frequent communication is key because when staff is informed about what is happening they have less stress. “The road ahead looks better, but there is still a difficult and long road ahead. People have survived this far on their reserves they built up over the years, but they have depleted it now.”

He says the industry must brace itself for a difficult first six months of 2021. “Having our claims paid out will send the runway a bit.”

ALSO READ: Jury still out on insurers’ liability for business interruption claims

Anderson agrees that regular communication is important to ensure that staff knows you have not forgotten about them. “Insurers have such an opportunity now to make a difference in the lives of others as opposed to how it is now. We are asking them just do the basics, because it is the moral thing to do.”

He points out that insurers should have been able by now, after six months, to have done the math and to see that paying out will not jeopardise their business.

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