Dear Client,
Taking three steps forward and two steps backward has been the rather awkward dance we’ve all experienced with Insurers this past year; none more so than our current engagements with Bryte who have suddenly done an about turn and are revisiting the liability aspect for all their corporate claims.
We are again having to argue that positive cases of COVID within the radius trigger the policy and that the government regulations that followed caused the loss. This is despite the legal certainty which has been established through the courts, and that insurers have recognised that their customers COVID-19 claims are valid.
Bryte’s backward shift appears to be steered by Daniel Le Roux from Clyde & Co, the attorney who led the charge on behalf of Insurers in the class action lawsuit brought by listeriosis victims in 2019.
It is encouraging, however, that steps in the right direction are being taken with many of the other insurers, which now includes Old Mutual Insure and Factory & Industrial with whom we now have a call every fortnight to ensure that claims are moving along. While we have differences of opinion on certain aspects, we are working together constructively to find resolution.
It must be said that we remain frustrated by the general lack of urgency by the majority of insurers, it is the cynical tactics being used by some of them to limit the quantum of claims which is most concerning. We are still having to drag insurers to the cash register.
Among the following tactics still being employed by insurers to reduce quantum and delay payments:
- Deliberately trying to lower the turnover trend by incorporating March 2020 turnover in the trend calculation, despite the fact that March was negatively affected by early Covid-19 business reduction. This has a substantial negative impact on the value of a claim and cannot be justified in any manner whatsoever.
- Refusing to reimburse employees for any pay cuts, because business owners did not have funds to pay them during lockdown. Had the insurers accepted liability for these claims at the outset, these pay cuts would not have been necessary.
- Most businesses negotiated provisional or permanent rental rebates from landlords and insurers are deducting these rebates from claims, and at the same time are refusing to reimburse landlords in their claims. In other words, insurers are getting the benefit of the rebate under a claim and at the same time denying the landlord their claims for the rebated rental
- Business Interruption policies cover any reduction of the rate of gross profit when a business returned to partial business, but insurers are trying to ignore this portion of the claim. Many businesses will have returned to partial business during the insured indemnity period, but for various reasons will be suffering a reduction in the gross profit earned on their reduced turnover.
These are the major issues we are having to deal with, and each claim is being argued at granular level, which takes time and effort.
The delays are being exacerbated by the fact that insurers only began instructing their loss adjusters to validate claims in February 2021, which means that they are currently inundated with claims.
Santam vs Ma-Afrika
Those of you who have been waiting patiently for the Supreme Court of Appeal case between Santam and Ma-Afrika Hotels appealing the 18-month period of insurance handed down by the High Court will be disappointed to hear that it is likely it will only be heard in August.
Santam are arguing there’s no ambiguity in their contracts and that the three judges of the High Court got it wrong in December 2020. At the very least, we believe the issue is ambiguous. That being the case, the issue in contention should be interpreted against Santam in favour of the claimants. We remain confident going into the next round, and once again have put the full weight of our legal team behind this fight at the Supreme Court of Appeal.
For your interest, we are sharing the heads of argument since these were prepared with a view to the case being heard in May.
Santam Heads of Argument
Ma-Afrika Heads of Argument
We will continue to keep you appraised of developments.
TTA webinar
Finally, we will be hosting a webinar with Tshwane Tourism Authority on Wednesday 19 May at 11am to provide an update on the campaign and answer questions. Click here to register.
Media, advocacy, and stakeholder engagement
We continue to work closely with our friends in the media to update them on where we are on legal matters, and also to share your stories. You would have seen numerous articles in print, and also on radio and TV over the past few months.
Should any of you wish to share your stories, please reach out to our media team at dani@prologconsulting.co.za or sandra@prologconsulting.co.za.
Don’t lose hope. We will not be intimidated or deterred by insurers reluctance to deal with claims fairly and efficiently. We will continue to update you on our progress and thank you for putting your trust in us.
Kind regards,
Ryan Woolley
Insurance Claims Africa – CEO
