Another loser in Covid claims battle

OLD MUTUAL INSURE: ORDERED BY COURT TO COUGH UP

Luggage retail chain forced to take legal action.

Things aren’t looking good for South Africa’s short-term insurers in the ongoing legal battles around Covid-19 business interruption insurance claims.

Old Mutual Insure, a subsidiary of JSE-listed financial services giant Old Mutual, on Wednesday became the latest insurer to be ordered by the Western Cape High Court to pay out a disputed claim.

The court ruled in favour of Interfax, a small luggage retail chain with a handful of stores in the Western Cape.

Interfax, owned by entrepreneur Chris Warncke, runs Luggage Warehouse outlets in Cape

Town and Stellenbosch and a store called Waterfront Leathers at the V&A Waterfront.

According to the judgment by a full bench of the high court, Old Mutual Insure was obliged to indemnify Interfax’s pandemic-related losses for a period covering a maximum of six months and up to the maximum insured amount of R17.6 million.

The court also ordered Old Mutual Insure to pay Interfax’s legal costs for the application.

The case represented shortterm insurers’ fourth loss in a row regarding business interruption claims by firms hit by the economic fallout of Covid-19.

However, it is the first known judgment involving Old Mutual Insure and the first such case involving a retail business.

In July, Cape Town restaurant Cafe Chameleon won against Guardrisk Insurance (a Momentum Metropolitan subsidiary), which was appealed by Guardrisk in the Supreme Court of Appeal (SCA) on Monday. The SCA ruling is expected before the end of the year.

Last week, Ma-Afrika Hotels and Stellenbosch Kitchen won a similar case against Santam, while a second such case against Guardrisk was won by another restaurant, Fat Cactus.

Santam said it would appeal the Ma-Afrika ruling. Old Mutual Insure has yet to confirm whether it will be appealing Wednesday’s Interfax judgment.

An elated Warncke said the ruling in Interfax’s favour is a welcome step, considering the woes the company has faced and continues to face due to Covid-19.

“We are ecstatic as this has been a very difficult time for us …

“Interfax has had to retrench about half of our 40 staff and close some outlets. To say that Covid-19 has decimated our business is an understatement,” he said.

“We really hope Old Mutual Insure won’t appeal the high court ruling. However, if they do, we plan to stay on course and fight this battle together with our lawyers, Fairbridges Wertheim Becker Attorneys.”