South Africa: Santam to appeal court’s verdict on COVID-19 claims


South Africa’s largest general insurer Santam says it will appeal this week’s judgement by the Western Cape High Court that it must pay business interruption claims resulting from COVID-19.

“Santam believes that the high court erred in its judgment regarding causation and the insured peril, the trends clause and the indemnity period, and it is therefore important to take the matter to the Supreme Court of Appeal,” the company said in a statement. The decision has been taken after consultation with reinsurers, it added.

The company argues that local cases of COVID-19 and the resulting South African government lockdown are two separate events. That line of reasoning was squarely rejected by the Western Cape judges. The two events are “are “inseparably part of the same insured peril”, Judge Cloete wrote in the judgement. The court also told Santam to pay the legal costs of the plaintiff,  Ma-Afrika.

READ MORE: As Santam loses COVID-19 claims case, reinsurers call the shots

  • Reversal of the decision looks unlikely: the argument that COVID-19 cases and the lockdown response were separate events was also rejected by the UK High Court in September.
  • The Western Cape Court in July refused the same line of argument in a separate case between Guardrisk and Cafe Chameleon.
  • Guardrisk’s appeal of that decision will be heard by the Supreme Court of Appeal on November 23.

Bottom line

Premium-paying customers are likely to lose faith with Santam as it continues to drag its feet. The danger is that wider insurance penetration in South Africa will also suffer.


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