Gondwana Collection Namibia, a major player in Namibia’s tourism industry, has turned to the High Court of Namibia to force short-term insurer, Hollard Insurance Company of Namibia, to pay out what it calls “agreed commitments” under a business interruption claim. Business interruption insurance basically offers businesses protection against financial losses incurred when businesses are unable to operate and in the 12 months or so the Covid-19 outbreak has raised questions about whether this coverage includes pandemic-related losses.
A statement from Gondwana spokesperson, Inke Stoldt, noted the tourism operator intends to lodge its application at the Windhoek High Court on 31 March 2021. “The action taken by Gondwana stems from insured losses that the company has suffered due to the Covid-19 outbreak, the state of emergency and measures implemented by government as a result of the Covid-19 outbreak. The above application is affiliated to the urgent application lodged on 3 March 2021, but is not affected by the removal of the urgent application from the court roll,” the statement reads.
Stoldt requested the understanding of media houses that any further statements will be published only as may be deemed necessary under the advisement of Gondwana’s legal counsel. “Media queries are referred again to the court papers on public record that provide full context to this matter,” she concluded. Meanwhile, insurance experts say whether or not businesses can claim for Covid-19 related claims depends on the terms of the insurance policy and how the insurer, and in the case the courts, interpret them.
Business interruption insurance policies can help a business remain afloat if it has to close temporarily. The relevant insurance policies provide income replacement that can be used to cover day-to-day operating expenses and overhead costs until the business is able to reopen.
Business interruption policies are generally used by small to mid-sized businesses. A typical business interruption policy will include property, liability, and business income coverage. Generally, damage caused by riots, vandalism, or civil unrest are covered by business interruption insurance policies, as well, unless the policy specifically excludes these events. Damages related to flooding, earthquakes, or mudslides may normally not be covered under a standard business interruption insurance policy but can be added upon request.
The coronavirus pandemic delivered a significant economic blow to many business owners with the many having been forced to close down. However, unless a policy specifically lists coverage for pandemics or contagious illnesses, those events may generally be excluded.