With legal processes likely to take some time, Hollard has decided to pay clients covered for contagious diseases under the terms of their business-interruption policies, according to a statement Saturday.
“We remain of the view that nationwide government closures or lockdowns are not insurable risks and we believe that legal certainty regarding lockdown-related claims is urgently required,” said Willie Lategan, chief executive officer of Hollard’s property and casualty insurance unit. “We’re concerned that many smaller businesses will be unable to survive until legal certainty is established.”
South Africa’s government allowed only essential services to operate under a lockdown imposed late March. While rules have since been relaxed, insurers have rejected business-interruption claims, saying payouts can only result from physical events such as an infection at a company’s premises.
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