Insurers told to pay up for legitimate business interruption insurance claims

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The Financial Sector Conduct Authority (FSCA) had in no uncertain terms instructed insurers to pay legitimate business insurance claims on policies with infectious diseases cover. The Regulator said the pandemic lockdown to flatten the curve  of Covid-19 could not be used by insurers to reject such claims.

This follows after a Western Cape business claimed a watershed victory in the  Cape Town High Court regarding this issue. Guardrisk Insurance, part of Momentum Metropolitan was ordered to pay up. The Regulator had been inundated with complaints by small tourism and hospitality outlets regarding short term insurers refusing to pay out legitimate claims.

In his reply to the court case, the Regulator stated that it had been, on a continuing basis, engaged with the industry and is working with the FSCA to address the issue with non-compliant insurers.



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