Inside the looming court case that could force insurers to pay Covid-19 claims

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Are insurers liable to pay for business interruption caused by the lockdown?
Are insurers liable to pay for business interruption caused by the lockdown?
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A precedent-setting court case is about to hit the Western Cape High Court. Two Santam clients want to force the short-term insurer's hand to pay Covid-19 related claims for their hotels and restaurants.

A company which owns hotels and guest houses in Cape Town and Stellenbosch, and another one which owns several restaurants, plan to submit an urgent application to the High Court on Monday as Santam has rejected four of their business interruption claims.

Business interruption cover is a kind of insurance product that compensates businesses when they are not able to trade, mostly due to damage to their premises or assets. However, some insurers, including Santam, also promise to cover their clients for notifiable infectious diseases and the cover is largely sold to the hospitality sector.

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