South Africa: Nation's Largest Business Insurance Companies Promise Over R1 Billion in Relief Payments

analysis

Whether pushed, cajoled or of their own volition, South Africa's big insurers have come to the table on the subject of business interruption insurance for the restaurant and hospitality industry.

South Africa's largest business insurance companies including Santam and Hollard have agreed to provide interim relief to clients with business interruption insurance that includes cover for contagious diseases.

This brings hope to the thousands of restaurant and hotel owners who face financial ruin following the lockdown of their industry as a result of the Covid-19 pandemic.

"This is good news. The insurance companies have turned around and realised that we are partners," says Dumasi Mfugale, owner of The Foundry Restaurant and Bar in Parktown North.

"What they are offering may not be sufficient, but at least it's a start."

Restaurants, hotels and lodges have been locked in an intractable dispute with their insurers over the validity of their business interruption claims, which have largely been rejected by the industry.

While several court cases are in the works, the first out of the blocks saw Cape Town restaurant Cafe Chameleon challenge its insurer, Guardrisk, over the latter's refusal to pay out based on its interpretation of the cover. The court found...

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