ICA sent out the following communication to update their clients on the business interruption insurance claims matters in early December 2021. For those who did not receive it please read on:
As we inch closer to the end of 2021, it’s opportune to take stock of what has been achieved in the past year and how things are evolving.
Of course, the most noteworthy news coming out of 2021 was in January when the majority of South African Insurers conceded liability for your BI Claims. Tomorrow marks a year to the day when ICA, in partnership with Café Chameleon, obtained an SCA judgment on 22 December 2020.
ICA following this and international judgments has worked relentlessly during 2021 to resolve your claims. We applaud those Insurers who got on with settling these claims trying to repair damaged relationships.
Another major highlight came in October 2021 when the Supreme Court of Appeal ruled in favour of Ma-Afrika Hotels and Stellenbosch Kitchen. It was a critical point in the lengthy battle to hold Santam liable for COVID-19 Business Interruption claims for the full indemnity period versus a limitation of 3 months. This was a welcome boost for all affected clients and gave us strong impetus to progress matters towards settlement in the final weeks of the year.
Since then, we have started to see glimpses of the Santam of old, with both interim payments and settlements flow in, albeit slowly. It must be said that loss adjusters are overwhelmed, but they are working through claims methodically and we have seen good progress with our clients’ claims.
Our clients experience with Factory & Industrial continues to be a frustrating one, where we had gone through an adjustment process with their appointed Loss Adjusters, only for them to be replaced once Factory & Industrial had received their reports. We are now going through round 2 with a small local loss adjusting practice and we are concerned that the adjustments that are being made are not in line with what we have seen from other insurers. We will continue to place pressure on behalf of our clients and keep those affected informed about the progress but Factory & Industrial conduct merits further scrutiny.
Meanwhile, we have reached an impasse with Hollard Namibia, with the company still refusing to recognise the legal certainty established in South Africa and across the world. Litigation appears to be the only path as not even Hollard South Africa can convince their Namibian colleagues.
We are disappointed with the behaviour of Hollard Namibia and what appears to be a strategy of ‘deep-pocket litigation’ in an attempt to drag out the matter to force a desperate client to settle or run out of steam.
This is not at all what we have experienced when dealing with Hollard South Africa, which conceded liability for BI claims soon after the SCA judgment, and we are deeply disappointed with Hollard Namibia’s shareholders (Hollard International / Eindhoven Family), who continue to allow Hollard Namibia to pursue this Stalingrad approach to litigation.
It is also noteworthy that Hollard Namibia has highlighted it has settled a large majority of its claims. However these have been settled without Hollard Namibia recognising any legal certainty and without following international judgments, which disappointingly points to a likelihood that the settled claims were done so under duress, with desperate clients accepting any offer on the table.
Further good news came last week with the UK announcing it would remove South Africa from its red list. We hope this will be extended in other source markets as swiftly as it was imposed and that our tourism and hospitality industry can begin to recoup some of the losses they have experienced over the festive season.
The unnecessary devastation caused by a knee-jerk reaction from global governments in response to the discovery of new variants is not only ineffective, it’s unsustainable. The tourism and hospitality industry in South Africa lost almost R1bn within 48 hours after the announcement of South Africa’s reinstatement on the UK’s red list, with predictions that, had the ban continued through the four-month peak season, 205 000 jobs would have been lost.
Amidst the uncertainty we continue to face with each new variant and wave, we know our role is to secure the full and final settlement for those clients who have yet to receive what is rightfully theirs. We will continue to fight on your behalf so that 2022 begins on the right note.
As we head into the festive season, after a very hard-fought 2021, I would like to take the opportunity to wish you and your loved ones a safe summer break.
Should you have any questions or need assistance, please contact our claims team, or me directly, on firstname.lastname@example.org.
We thank you for putting your trust in us.