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South African Insurers Agree to Pay for COVID-19 Losses

Over the past couple of months, we have written on decisions by various European insurers to pay policyholders for their COVID-19 related losses. That positive trend is now moving across continents.

In response to COVID-19, South Africa’s government imposed restrictions allowing only essential services to operate under a lockdown imposed in March 2020, resulting in substantial losses for corporations and small businesses. In response to policyholders’ claims, South African insurance companies Santam, Hollard Insurance Company, and Guardrisk Insurance Co. Ltd. have agreed to pay certain business interruption losses resulting from COVID-19 and related government orders. The insurance companies recently announced that they will offer settlements and interim relief to thousands of its insured businesses under business interruption insurance policies that provide coverage for losses resulting from contagious and infectious diseases.

The South African insurers’ decision comes at a time where other insurance companies are in pending litigation over the payment of COVID-19 related claims in the United States and the United Kingdom. In the UK, the Financial Conduct Authority’s action against eight insurers aimed at resolving conflicting interpretations of business interruption insurance policies recently concluded declaratory proceedings and will likely be decided next month. In the US, the insurance coverage cases are only beginning to make their way through the courts, with one federal court recently finding in favor of the policyholder in a case involving coverage for COVID-19 losses.[1]

Perhaps the continued expansion of positive responses by insurance companies around the globe will influence insurers in the United States–many of which are actually reporting high levels of net income during the pandemic–to comply with their obligations under the policies and applicable law. This remains to be seen as thousands of COVID-19 related claims proceed through the claims and litigation process.

Copyright © 2020, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume X, Number 237



About this Author

Sergio F. Oehninger Insurance Coverage Attorney Hunton Andrews Kurth Washington, DC

Sergio represents companies in complex insurance coverage and bad faith disputes nationally and internationally.

Sergio counsels multinational corporations on insurance coverage and risk management issues arising in various industries – including financial services, retail, energy, technology, real estate, construction, and hospitality.

His insurance coverage advice focuses on risks such as: cyber and data breach; commercial general liability; directors and officers; professional liability; employment practices; property and casualty; business interruption;...

Daniel Hentschel Complex Business Litigation Attorney Hunton Andrews Kurth Miami, FL

Daniel’s practice focuses on complex business litigation, with an emphasis on insurance coverage litigation and government investigations.

With experience in the areas of insurance litigation, bad faith and government investigations, Daniel represents corporate entities in complex litigation disputes in both federal and state court. Daniel’s practice focuses on counseling clients on insurance coverage disputes arising out of cyber policies, crime policies, commercial general liability (CGL) policies, professional liability/errors and omissions (E&O) policies, and directors and...