Monday, 27 July 2020 19:32

 

Photo Credit:Moneyweb.

SA’s largest short-term insurer, Santam, pledged R1bn in relief for small and medium-sized leisure, hospitality and nonessential retail businesses as the insurance industry pushes back against paying out claims related to Covid-19 business disruptions.

In a statement issued on Sunday, Santam CEO, Lizé Lambrechts said the insurer's relief will focus mainly on small and medium sized commercial policyholders policyholders in the hospitality, leisure and non-essential retail services industry. Large corporate clients are excluded.

Policyholders will have to register a claim in order to qualify for the relief. Their policies must still be in force and Santam will start making payments from the first week of August 2020.  

"After careful consideration of the situation, especially the unforeseen length of the lockdown and the ongoing restrictions that are impacting businesses, we decided to assist with a substantial payment commitment to help sustain our policyholders in the most impacted industries,” said Lambrechts.  

The R1 billion will cover a portion of about two months’ worth of cover the affected clients had with Santam. The insurer capped it at two months because this is the period where most businesses were impacted by the restrictions imposed under the Level 4 and 5 lockdowns, it said.

But this will not affect the September 1 court case, said Santam.

Santam is embroiled in a legal battle with Western Cape-based hotel group Ma-Afrika Hotels, which is claiming payments for business interruptions due to the lockdown. Earlier in July, Santam opposed an application brought against it in the high court in Cape Town, with a court case set for September 1.