Insurers warned over non-payment of lockdown claims
Updated | By Anastasi Mokgobu
The Financial Sector Conduct Authority (FSCA) has sent out a stern warning to insurers who deliberately avoiding paying business interruption claims during the Covid-19 lockdown.
Earlier this week, the Western Cape High Court ruled against insurance company Guardrisk Insurance after it refused to accept liability for losses suffered by Cape Town restaurant Café Chameleon.
In a statement, the authority said the lockdown cannot be used as grounds to reject a claim.
"Such conduct goes against the principles of treating customers fairly and breaks down confidence and trust in the insurance sector. The FSCA has communicated this view to insurers and will take action against those that do not treat their customers fairly.”
Insurance Claims Africa CEO Ryan Woolley believes the FSCA's warning is a step in the right direction.
"We applaud the FSCA for its brave and clear guidance and proactive approach to this important matter.
“Thus far, insurers have been rejecting business interruption claims, even though the claimants have extensions that cover infectious and contagious notifiable diseases.
“The FSCA’s statement unequivocally rules out this interpretation of these policies. Nonetheless, we still invite the insurers to talk to us about a sensible compromise settlement.”
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