BUSINESS INSURANCE PAYOUTS: READ THE FINE PRINT

This week, Cathedral Peak Hotel in the Drakensberg took to social media in frustration about the non-payment of its Covid-related business interruption insurance claim. In another matter, a court date has been set for September as two Stellenbosch-based businesses, hotel chain Ma-Afrika and restaurant Stellenbosch Kitchen, challenge their insurer’s non-payment under the clauses of their business interruption insurance.

It is no surprise that business interruption insurance has been in the spotlight, with Covid-19 and the resulting lockdown devastating the tourism and hospitality sectors. The Federated Hospitality Association of SA estimates that this has threatened the livelihoods of more than 600 000 employees and could cause the closure of 49 000 small businesses.

Business interruption (BI) insurance is a policy taken by a business to cover events that prevent it from operating. Many businesses believed that