Old Mutual has decided that it will accept liability in Business Interruption claims, but only in instances where the insured businesses complied with the requirements of the specific policy, as interpreted in the recent relevant court judgements. The decision comes following recent media reports and allegations about certain insurance clients who submitted business interruption claims to Old Mutual, following the presence of the Covid-19 pandemic and the resultant government actions.
“The complex question as to whether clients with Business Interruption (BI) extensions for infectious and contagious diseases are entitled cover for the Covid-19 pandemic has been the subject matter of a number of court cases. Guided by such court judgements, Old Mutual has decided to accept liability in those cases where the insured complied with the requirements of the policy, as interpreted in the relevant court judgements,” read a statement from Riaan Vermeulen, managing director of the Old Mutual Short-Term Insurance Company.
Vermeulen said Old Mutual’s liability is subject “firstly, to assess to what extent the insured event may have caused the loss, and secondly, consideration of the quantum and related circumstances unique to each insured, bearing in mind that with different policies and factual circumstances underlying both liability and quantum, it will not be possible to adopt a one-size-fits-all approach”.
He added that Old Mutual will also have to consider the insured’s specific circumstances in light of the fact that relevant court judgements did not deal with all issues that might arise in relation to its policies. Every case, he noted, is therefore being considered and decided on its own merits.
“Given a fair amount of guidance obtained from relevant court judgements and because Old Mutual recognises the urgency of the matter, we are in the process of engaging with all insured clients who believe that they have submitted valid claims in terms of their policies. It is, therefore, unfortunate that incorrect information surfaced in the media whilst we are in the process of engagement and quantification of these losses,” Vermeulen stated.
He said Old Mutual strongly objects to allegations that they are ‘refusing’ to pay valid Business Interruption claims, saying that Old Mutual remains committed to treat all customers fairly, and will settle all valid claims.