Market conduct regulator sides with businesses in battle against short-term insurers
The Financial Sector Conduct Authority has slammed insurers who are using the national lockdown as a reason not to pay claims under business interruption policies
In a victory for hundreds of small businesses facing ruin because of Covid-19 and the resulting lockdown, SA's financial services regulator has come out strongly against insurers refusing to pay out on claims caused by losses resulting from the pandemic.
The Financial Sector Conduct Authority (FSCA) says it will take action against short-term insurers which continue to reject claims under business interruption policies on the ground that losses were caused by the national lockdown and not the infectious or contagious notifiable disease covered by the policies. The companies, including divisions of heavyweights such as Sanlam and Old Mutual, face claims of about R4bn from more than 500 businesses in the tourism and hospitality sector for the loss of business under the lockdown which was triggered by the Covid-19 pandemic.