KVV Inc
  • About Us
    • Meet The Team
      • Staff Photos
    • KVV Masters
    • Blog
  • Registration Process
    • I Am a Buyer
    • I Am a Seller
    • I Am An Agent
  • KVV Training Centre
  • KVV TV
  • KVV Cares
  • Contact Us
    • Privacy Policy
    • PAIA Manual
    • POPI Policy
  • +27 12 006 5171

The Pandemic and Business Interruption Cover – Can You Claim?

Home / Blog / Business / The Pandemic and Business Interruption Cover – Can You Claim?
August 19, 2020
Business
0 Comments

It’s no surprise that our media has been awash with reports on the recent High Court judgment around a restaurant’s business interruption cover claims.

The restaurant in question, like many other businesses of all types and sizes, has been suffering severe losses from being forced to close (and latterly trade under very limited conditions) during the lockdown. Its business interruption claim in terms of an “Infectious Diseases Extension” clause in its policy (which it had faithfully been renewing annually since 2007) was rejected by the insurers.

What caused your business losses? The two things you must prove…

Sued by the restaurant, the insurers raised a whole slew of defences to the claim, all of them ultimately rejected by the Court.

Of most interest to businesses holding this type of cover will be the central question of whether or not the wording of your particular policy, in particular any “notifiable disease extension” clause (which in this case was a no-premium, “free cover” extension) will cover you for losses sustained in the particular circumstances of this pandemic and the lockdown. 

The clause in this particular case promised cover for ”interruption or interference with the business due to (e) notifiable disease occurring within a radius of 50 km of the premises…”.

The insurer argued that this covered only losses resulting from business interruption “where the interruption is due to the Notifiable disease and not losses as a result of other causes” and that in this case business was interrupted not by the Covid-19 outbreak but rather by the lockdown “which is not insured under the Policy.”  It also argued that “there was no sufficient causal link between the Covid-19 outbreak and the [restaurant]’s eventual loss.” The restaurant, it said, could have taken out other policies to specifically cover it in these circumstances but it chose not to do so.

In a nutshell, the Court found that the restaurant had to show two things –

  1. “The Covid-19 as a Notifiable disease, caused or materially contributed to the “Lockdown Regulations” that gave rise to the Applicant’s claim (this is a factual enquiry). If it did not, then no legal liability can arise…”
  2. “If it did, then the second question becomes relevant, namely whether the conduct is linked to the harm sufficiently closely or directly for legal liability to ensue, or whether the harm is too remote from the conduct”.

Finding that the restaurant had indeed proved causation as above, the Court declared that it was covered for such of its losses as it “is able to calculate and quantify from time to time”.

So are you covered?

The insurers have said they are taking this matter on appeal to the Supreme Court of Appeal (the insurance industry as a whole of course faces substantial losses from these claims), but remember that your particular policy may anyway be worded so as to cover you. There are also media reports of similar claims being met by some insurers, and of interim relief being offered by others. As the Court in this case put it “each case must be decided upon its own facts and the law”.

Moreover the Financial Sector Conduct Authority (FSCA) says that “The National Lockdown cannot be used by any insurer as grounds to reject a claim” and that “policyholders are able to claim in instances where they can show that they have satisfied the requirements of their specific policy, whether it was before, during or after the national lockdown”. You can complain to the FSCA if you feel that you have been treated unfairly.

 

© LawDotNews

Share
Previous Post
Lockdown Admission of Guilt Fines – The Criminal Record Risk
Next Post
Property Subsidence: New Law, Strict Liability and Ubuntu

Leave a Reply - Cancel reply

Your email address will not be published. Required fields are marked (required)

Recent Posts
  • KVV | A Note from our Director
  • Buying and Selling Property: Who Pays What Costs?
  • Bodies Corporate: Forcing Access to Units, and Round Robin Resolutions
  • Verbal Agreements – Not Much Good, But Lots of Bad and Ugly
  • Trusts on Divorce: Are You Stuck with an Ex-Spouse as Trustee?
Contact Info

Ground Floor, Block D, Jigsaw Park 7 Einstein Road Highveld Techno Park, Centurion
Phone: +27 87 351 2022
Fax: (012) 655-1053

Get Directions
Archive
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • July 2021
  • April 2021
  • January 2021
  • December 2020
  • November 2020
  • September 2020
  • August 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
Categories
  • Bank And Financial
  • Business
  • Contract
  • Corporate
  • Criminal Law
  • Debt
  • Debt recovery
  • Delict and Civil Claims
  • Delit / Civil Claims
  • Employment and Labour Law
  • Employment Law
  • Family Law
  • General Interest
  • Information Technology Law / Cyber Law
  • Insolvency
  • Insolvency / liquidation
  • KVV News
  • Litigation
  • News
  • Property
  • Property Law
  • Road Traffic
  • Tax
  • Trusts
  • Uncategorized
  • Website Of The Month
  • Wills and Estates
Pages
  • About Us
  • Blog
  • Blog Archive
  • Blog Classic
  • Contact Us
  • Cost Calculator
  • How We Work
  • I Am a Buyer
  • I Am a Seller
  • I Am An Agent
  • KVV Inc – Your Property Partner
  • KVV TV
  • Master Lounge
  • Meat the Team
  • Meet The Team
  • Registration Process
  • Shortcodes
  • Staff Photos
  • Testimonials
  • Training Centre

Designed by eMSDigital Group © 2021. All Rights Reserved

  • About Us
  • Registration Process
  • KVV Training Centre
  • KVV TV
  • KVV Cares
  • Contact Us
  • About Us
    • Meet The Team
      • Staff Photos
    • KVV Masters
    • Blog
  • Registration Process
    • I Am a Buyer
    • I Am a Seller
    • I Am An Agent
  • KVV Training Centre
  • KVV TV
  • KVV Cares
  • Contact Us
    • Privacy Policy
    • PAIA Manual
    • POPI Policy