Repudiated Covid-19 Insurance Claims under spotlight

In a recent Judgment by the Western Cape High Court, the High Court declared that the insurer is obliged to indemnify the insured against losses sustained as a result of the Covid-19 Lockdown.

This is a big win for the many businesses who hold such insurance, and who have been faced with their claims being rejected by their insurers.

The main purpose of Business Interruption Insurance, is to indemnify you against your loss as a result of the interruption of your business, due to circumstances beyond your control. The Covid-19 Lockdown is one such circumstance, but due to the national impact thereof, several insurers sought a way to escape these types of claims, by “crafty” interpretations of the policy wording.

The High Court extensively interpreted the policy wording of the insurance policy, to find the true meaning and purpose of the policy. On the other hand, insurers apply a “narrow interpretation” to escape liability, but their interpretation was found to be incorrect and unfair.

You can read the full judgment of Judge Le Grange here.

If you find yourself in the same predicament as Cafe Chameleon, where your business was interrupted as a result of the Covid-19 Lockdown, and your insurer rejected your claim in terms of your Business Interruption Insurance Policy, we are available to fight the good fight for you.

One of the hurdles to overcome however, is the fact that the standard clause in Insurance Policies of this nature, determine that a Covid-19 case must have occurred within a 50km radius of your business. This might sound like a difficult hurdle to overcome, but in actual fact, it is not.

Johannesburg, the largest city in South Africa, is 2400 square metres. The square root of 2400 square metres is 49.98 metres. The latest breakdown of Covid-19 cases in the suburbs of Gauteng (here) is a clear indication that Covid-19 cased are so widespread that it will be quite easy to establish that a Covid-19 case has been reported within 50km from your business.

When you pay your premiums, you are your insurer’s best customer, but when you call on them to deliver what you pay them for, they start backtracking. Never trust your insurer to interpret your policy wording for you, rather speak to us to give you a “true interpretation” of your policy wording.