Last month, The Peninsula All-Suite Hotel in Sea Point received their settlement agreement from Hollard, following a legal process around their Business Interruption (hospitality clause/infectious diseases) claim.
The Peninsula’s General Manager, Chris Godenir, described the process (which finally resulted in a pay out in February) as not being for the fainthearted.
“It wasn’t easy,” says Godenir, “But we had a positive outcome. So many others are still waiting, and have now gone into liquidation. These claims will now become a fight between the liquidators and insurers. It’s incredibly stressful for those effected and still waiting.”
Godenir, who is both thrilled and relieved at their positive outcome, shared the following learnings for those tackling a CBI claim:
Trust the process
The Peninsula Hotel were represented by Savage, Jooste and Adams Attorneys in Pretoria on a joint application on behalf of SATIB’s Hollard clients – and others with a similar clause – as Savage, Jooste and Adams believed they had a strong claim.
For Godenir, it was still a leap of faith. “Due to there being such a strong case, Markus Haasbroek of Savage, Jooste and Adams was confident, but we could still be liable for insurer’s costs if courts ruled against us. He believed that we would reach a settlement without having to go to court. If you don’t put the hook in the water, you’re not going to catch the fish,” says Godenir. “So, we started the process legally and they filed against.”
And according to Godenir, it wasn’t a quick process. Hollard appointed their own attorneys, the parties sat down together, and there was plenty of back-and-forth negotiation.
Whether you go the legal route, or process your claim through your broker, you need to hang in there.
“There is nothing simple if you go the legal route. BI claims are treated on a case-by-case basis,” says Godenir, “Each examined on their own merit. The wording and clauses are analysed deeply – and in the meantime there are legal cases happening internationally, with Insurers waiting for the outcome of local and global law cases. It takes time.”
Build relationships
Godenir believes that the success of their claim was largely due to the commitment and open communication of all parties involved.
“This entire process was done in conjunction with SATIB, with them working alongside us every step of the way,” says Godenir. “I honestly say that SATIB were fantastic throughout the whole process. Dewald – and his team – supported us through the process.”
But Godenir credits all the relationships developed over the past year:
“We were dealing with SATIB and Dewald and his team. We were dealing with Savage, Jooste and Adams and their team of attorneys, including Suzanne Booyens who worked tirelessly to bring the matter to fruition. And although we didn’t deal directly with Hollard, Hollard were involved as well with us. And then there were the other parties that Savage, Jooste and Adams were liaising with. There was a relationship with a number of parties. But nobody gave up, and SATIB never gave up trying on behalf of their client.”
Interestingly, Godenir says his team resolved never to get angry. “We understood where the shortcomings were in the insurance. We were not threatening. We were always open to negotiation and we built on our relationships as best as we could.”
Whether you decide to pursue a legal claim or a BI claim through your insurer, involve your broker from the outset and keep the lines of communication open.
Read and understand the wording in your policies
Going forward, the best piece of advice is to take the time to really understand your cover. How many of us actually go through the small print?
Work with broker to understand the wording in your clauses, and as Godenir says, “You need to dig deeper and look harder. Make sure you understand every line of your policies – and what it is you’re accountable for.”
Do the groundwork and have your financials in place
Godenir estimates that they had nothing short of 30 Zoom calls while resolving their claim:
“It’s hard work, right? We had a lot of interaction, had to resubmit claims and paperwork – but you have to do the groundwork. You can’t just put your head in the sand and hope like hell it will happen.”
Fortunately, the team at The Peninsula had their financial ducks in a row and for Godenir this was key:
“I think that as we had good financials in place, we could prove what our budget was, and we could prove what we did previous year. We had five-year projections in place. We could pretty much say penny for penny exactly how much we lost due to the three months of lockdown. And it was far in excess of the actual million rand for our infectious diseases clause. Our insurers settled for the cancellation clause as well, so we settled on two agreements. One on business interruption and the other on cancellations (but only on those where we had received a deposit, capped at a maximum of twenty-thousand rand per booking).
In other words, work with your accountant and/or auditor and make sure you have up-to-date financials in place – it can only strengthen your claim.
Keep calm, but keep pushing
Going the legal route was a daunting prospect for the Peninsula team. Especially the reality that a loss could equal significant costs. “What was really scary,” says Godenir, “If we were to go legal, go to court for two years and then lose, we could have been liable for Hollard’s costs.”
Despite this, the Board decided that their odds were good and Godenir says that The Peninsula team pursued their claim “like a dog with a bone”.
“You’ve got to be the hungriest. We pushed and pushed – we never stopped. We regularly engaged with SATIB, so I would say keep the pressure on your broker, even though you keep the relationship friendly. I hold SATIB in the highest esteem because I know that they’re battling with another insurer, but you keep going.”
Ultimately, believes Godenir, you need to remain optimistic:
“I want to emphasise that – at every level – it was not easy. But I think everything we do at the Peninsula; we don’t do it half-heartedly. We go in there, we think out of the box, we don’t give up and we keep persevering,” says Godenir. “Keep it positive and stay optimistic. You really have to believe that you are going to be successful
