After more than eight months of legal wrangling, Santam clients received a glimmer of hope as the insurer announced it would start processing business interruption insurance claims. However, as brokers received letters outlining the claims process, and the requirements to validate claims, it became clear there was a catch.
From the beginning, it seemed insurers were playing a waiting game by delaying the claims process to exert financial pressure on desperate tourism businesses and get them to accept lower settlements. Play this strategy out long enough, and many businesses could fail altogether, defaulting on premiums or liquidating, negating any possible payouts.
How the insurance industry has dealt with clients during the pandemic has thrown a spotlight on fairness and trust. Santam's public statement that it would start assessing the contingent business interruption (CBI) claims of its clients comes with two important caveats.
The first is that it requires evidence of Covid-19 cases within the specified radius as stipulated in the policy. No problem, one would think, as cases of Covid-19 are to be found across the country.
According to Santam's letter, "such evidence is required as at 27 March 2020, the date of the national lockdown". Why is Santam still insisting on proof of a case within the specified radius, on the date of the start of lockdown, when it has stated in its letter that "the lockdown is part of the insured peril rather than a consequence of it"?
If the lockdown, imposed to limit the spread of the disease, resulted in successfully preventing cases in our area, how can this be used as an argument to negate or limit our business interruption claim?
Tourism businesses had to shut their doors on March 27 2020 irrespective of whether there were local cases or not. Surely Santam's insistence on proof of a local case is a circular argument that doesn't hold water?
The second is that Santam still intends to go ahead with its appeal on the ruling, by the Western Cape High Court, that it must cover the full indemnity period (18 months in the Ma Afrika case). It says the indemnity period should be limited to three months.
With this appeal scheduled to be heard only in February, the resulting continued delay in claims processing is doing irreversible harm to SA's vital tourism sector.
If Santam were simply to pay further interim payments to its clients, such relief would allow the legal process to continue to finality while the tourism businesses avoid failure. Such interim payments would naturally be limited to the three-month indemnity period Santam is standing fast on.
However, engagements between Insurance Claims Africa and Santam this week tell a different story. Santam seems unwilling to process any interim payments up to the three-month indemnity period, stating that any such claims will be treated as "full and final settlement". If Santam is confident of its appeal case, and is truly committed to supporting its clients, how can it be unwilling to pay out interim payments that would in any case not exceed the indemnity period it is appealing?
Is it possible that the sad timeline of events, and this latest twist, are laying bare the insurance giant's real strategy? Is the delay not just part of a plan to force clients to accept lower final settlements?
It has been 10 months since SA's lockdowns were instituted, with no clear end in sight. Many of us have managed to survive with zero income for the first four months of lockdown, and massively reduced income since then (while continuing to loyally pay our full insurance premiums). But how much longer are we expected to survive this war of attrition with our insurers?
Can insurers honestly say they are treating their customers fairly? Will they do the right thing, or persist with their damaging "insurance end game"? This strategy must be causing Santam huge reputational harm, but the effects felt by tourism businesses are infinitely more real - just ask their owners, employees and service providers who live the economic consequences daily.
• Scott is the owner of Tanda Tula, Timbavati Private Nature Reserve
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