Old Mutual becomes latest insurer to lose a Covid-19 case in court

Another insurance company has failed to defend its decision not to pay a client for losses incurred due to the Covid-19 lockdown.

2020-11-25 06:40:00 PM

Another insurance company has failed to defend its decision not to pay a client for losses incurred due to the Covid-19 lockdown.

Another insurance company has failed to defend its decision not to pay a client for losses incurred due to the Covid-19 lockdown.

Ruling on Wednesday, judge Dennis Davis said Old Mutual argued that though Covid-19 is widespread, the clause in Interfax's policy “requires that there be a local occurrence of the defined disease which must cause the business interruption and consequent loss”.

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“In other words, [Old Mutual's] argument is that the clause requires the contagious or infectious diseases to occur only within a prescribed radius of 50km of [Luggage Warehouse] premises ... Its argument ultimately was that the policy does not cover the applicant where both the disease and the response ... are national in nature,” he said. 

However, Davis said once an insurer sells a policy with wording that covers a disease such as Covid-19, it is difficult to argue against paying out.He ordered Old Mutual to assess and pay Interfax's claims, “in an expeditious and bona fide manner”. headtopics.com

This followed argument about the company's claim for an interim payment of R4.8m for April, May, June, and part of March.“This figure was based on a calculation by ... an independent assessor ... predicated on an estimated turnover during the period of R10.6m and an actual turnover of R1.3m,” said Davis.

Ethical business practice would support an interim payment, he said, but since the insurance policy did not make provision for an interim payment, the court could not order it.Costs were awarded against Old Mutual. Read more: Times LIVE »

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Not Old mutual this time plz🙄. Safa🤔