Sector regulators get insurers to agree to interim relief for Covid-19 business interruption

Engineering News reports that public loss adjustment company Insurance Claims Africa (ICA), which is representing more than 600 tourism and hospitality businesses, has welcomed an agreement reached between, on the one hand, the Financial Services Conduct Authority (FSCA) and the Prudential Authority (PA), and, on the other, major insurance companies. In terms of the agreement, the insurance companies will pay interim relief to some policyholders for business interruption caused by the Covid-19 pandemic. Hitherto, most of the major insurance companies (in a previous press releases, ICA named them as Bryte, Hollard, Momentum – with its subsidiaries HIC and Guardrisk – Old Mutual, Santam and Thatch) have been refusing to pay out business interruption insurance to hospitality and tourism companies which had taken out contagious and infectious disease cover with them.

These insurers have been claiming that the business interruption from which the hospitality and tourism sector has been suffering has been caused by the government-ordered national lockdown, and not by the pandemic. The interim relief will take the form of a once-off payment to the policyholders. They will not have to repay it, whatever the results of legal processes are. The interim payment will also not affect the total amount of the claims being made. Should the courts rule for the policyholders, the amount of the interim payment will be deducted from the total payment due to the policyholders. The FSCA and PA have made it clear that the interim relief did not preclude any of the insurance companies from offering full and final settlements to their policyholders, instead of pursuing legal actions.

by Rebecca Campbell

Releated

UIF will continue to process new claims

Engineering News writes that the Department of Employment and Labour together with the National Economic Development and Labour Council social partners have announced that the Unemployment Insurance Fund (UIF) will continue processing new claims for April and May until a cut-off date is announced. A 14-day notice window will be given to employers and employees before […]