South Africa’s Supreme Court of Appeal has ruled Santam (SNTJ.J) is liable to cover the impact of COVID-19 restrictions on hotel group Ma-Afrika for 18 months, rejecting the insurer’s request for a shorter time frame on the claim, Santam said on Thursday.

Globally, firms like Ma-Afrika have been fighting insurers’ rejection of claims made under their business interruption policies after they were forced to close as the pandemic took hold. In South Africa, insurers said their policies did not cover national lockdowns.

The court had already ruled Santam was liable to pay Ma-Afrika’s claim. Santam accepted the ruling but appealed the indemnity period, arguing it should only be liable for three months.

Santam noted Thursday’s decision, adding that it also affects certain policies structured similarly to the one held by Ma-Afrika but that these made up less than a third of the 3,200 such claims it had received.

“Santam will now finalise the claims that are directly impacted by the … judgement,” it continued.

It did not expect any changes to an estimate made in June that claims would cost it 1.7 billion rand, based on those it had already settled and what it could recoup via reinsurance, it added.

The insurer has already made 2.1 billion rand in payments related to such claims.

Insurance Claims Africa (ICA), a loss adjuster representing Ma-Afrika and other firms fighting with their insurers over the matter, said in a statement that Ma-Afrika had won the “final stretch of the battle” with Santam.

“The court’s decision in this matter is crucial for thousands of Santam’s … business interruption policy holders,” ICA CEO Ryan Wooley said.

The case has been closely watched by affected firms and insurers across the industry and is seen as providing broad clarity on insurers’ obligations on the matter in South Africa.

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