South Africa's biggest short-term insurer, Santam, says it may be liable for as much as R250 million in business interruption claims if the Western Cape High Court, which heard its business interruption claims case on Tuesday, agrees with its stand that its product was only meant to cover local events.
CEO, Lizé Lambrecht, said during the presentation of the company's interim results to end-June that Santam's contingent business interruption policies were intended for localised events and never for government responses to events such as the Covid-19 pandemic such as travel bans.
The Western Cape High Court is set to decide in mid-November whether Santam was right to reject lockdown-related business interruption claims or if it should pay up. The company has set aside R1.3 billion in the six months to end-June for the business interruption claims. This includes the R1 billion it gave as relief to some of its customers, R950 million of which has already been paid out.