By Jarita Kassen for EWN SANTAM PAYS OVER R500M IN BUSINESS INTERRUPTION INSURANCE PAYMENTS
More business interruption insurance clients have now received some form of relief.
The country’s largest short-term insurer, Santam, has finally paid out over R500 million in relief payments months after claims were lodged by policyholders hard hit by the COVID-19 lockdown.
The business interruption claims were initially rejected with Santam and other insurers reluctant to honour the policies because in their view the damage was caused by government’s lockdown and not the actual pandemic.
Following an agreement with regulators in July, Santam committed to paying out up to R1 billion in relief to some business interruption clients.
The financial services company had so far made relief payments to over 1,300 policyholders who had contingent business interruption cover.
Many of these policyholders were small and medium businesses operating in the tourism and hospitality sectors severely affected by the pandemic.
Santam said the average time between receiving the necessary documentation and payment was less than five days.
These relief payments were set at a minimum of R25,000 and a maximum of R1.5 million.
“Relief payments are set at a minimum of R25,000 and a maximum of R1.5m for individual contingent business interruption (CBI) policyholders. Santam has made it clear that it will not make the process of claiming the relief too onerous for its qualifying clients and will rather focus on swift payment of the relief to the most impacted industries,” Santam CEO Lizé Lambrechts said in a statement.
It is an interim measure, while insurers sought legal certainty in court.
Another insurer, Guardrisk, took a different route and was settling valid business interruption claims as a result of the coronavirus pandemic.