Ma-Afrika wins court battle against insurance giant Santam

The Western Cape High Court has ruled in favour of Ma-Afrika Hotels and Stellenbosch Kitchen in the high-profile Covid-19 business interruption claims battle against JSE-listed insurance giant Santam.

In a resounding judgment handed down on Tuesday afternoon, South Africa’s largest short-term insurer was ordered to pay out Ma-Afrika’s pandemic-linked claims for the impact over the entire policy period of 18 months, without limitations. The court also ordered that Santam pay Ma-Afrika’s legal costs.


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While Santam is likely to follow its industry peers such as Guardrisk in appealing a similar ruling by taking its case to the Supreme Court of Appeal (SCA), this latest judgment represents yet another blow to short-term insurers not wanting to pay out such claims.

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“We are grateful for the court’s decision in our favour,” a relieved André Pieterse, chair and CEO of the Ma-Afrika Hotel Group, said on Tuesday night.

He also thanked Ma-Afrika’s legal team, led by Advocate Jeremy Gauntlett QC SC, as well as the support from Insurance Claims Africa (ICA) CEO Ryan Woolley, together with the more than 700 clients the group represents on this issue.

“This outcome will greatly assist in allowing ourselves and others in the [South African] tourism and hospitality sector to weather the ongoing Covid-19 storm,” said Pieterse.

“We are also grateful to Santam for the interim relief payments received in August, which allowed us to retain our entire staff complement of 210 loyal people with more than 1 000 direct dependents. We are hopeful that this decision by the court will terminate the litigation, thereby bringing an end to the insecurity and suffering of many.”

Hot on the heels of Ma-Afrika’s massive court victory, ICA has now called for the immediate resolution and payment of all valid Covid-19 related business interruption claims by insurance companies.

The public loss adjustment firm joined forces with Ma-Afrika Hotels in its litigation against Santam, which has refused to settle the business interruption claims, even though it included cover for infectious or notifiable diseases.

Legal certainty

Woolley noted: “Santam has consistently said that it requires legal certainty in order to honour its customer’s claims, and most other insurers have followed suit.

“In our view, [Tuesday’s] judgment from a full Western Cape High Court bench, provides the legal certainty required to finalise all claims relating to business interruption caused by the pandemic.”

Ryan Woolley, CEO of Insurance Claims Africa. Image: Supplied

He said the seismic impact of Covid-19, coupled with insurers’ unwillingness to honour their obligations to their customers, has deepened the losses of affected businesses with some unable to ever recover.

“We believe it is now time for the insurance sector to step up and display the ethical leadership that has been missing from their response to this crisis thus far,” added Woolley.

ICA pointed out that there have been several legal and regulatory actions in the last few months that have provided additional certainty that insurers are liable for business interruption cover where policies include insurance against infectious and notifiable diseases.

“In July, the Financial [Sector] Regulatory Authority [FSCA] instructed the insurers to pay claims; also in July, the Western Cape High Court, in the matter of Cafe Chameleon v Guardrisk, rejected the insurers’ argument that the losses suffered by the claimant was due to the lockdown,” ICA noted in its statement.

Guardrisk’s appeal on this case will be heard at the SCA on Monday, November 23. ICA has also now partnered with Cafe Chameleon in this matter.

A matter of ‘national importance’

“The Ma-Afrika judgment has arrived in time to provide the SCA with further guidance from respected Cape High Court judges. This is a matter of national importance and the judgment reiterates the need to protect the consumer from insurers trying to change the terms of the contract post loss,” said Woolley.

“The real question is: are the insurers – which include Old Mutual, Guardrisk, Santam, Bryte, Hollard, F&I, Chubb, TRA, Lombard, AIG and Monitor – truly looking for certainty or simply a way out of their obligations towards their customers?

“We all know that this was a test case, not just for Santam but for all insurers refusing to pay these claims. By settling valid claims expeditiously, they have the opportunity to contribute to the survival of businesses in this critical sector, and to the preservation of thousands of jobs,” stressed Woolley

“Failure to do so will ensure they are remembered in history as companies that contributed directly to the demise of thousands of businesses and jobs during the country’s worst economic and social crisis.”