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Many business owners, particularly those in tourism and hospitality, take out insurance policies which cover losses that include those incurred due to interruption by infectious or contagious notifiable diseases.

Now, however, most insurers argue that Covid-19 isn’t responsible for the loss of business – rather, it’s due to the lockdown.

I've spoken to a number of brokers on condition of anonomity of course and they say no, the rejections are coming in thick and fast...

Wendy Knowler, consumer journalist

A franchise of one of those major quick service franchises...after three months of assessors making this franchise owner jump through all the hoops, eventually said neither the president's declaration of a state of disaster or the lockdown forces them to provide the cover provided by the notifiable diseases extention...

Wendy Knowler, consumer journalist

The insured must prove that the business interruption was caused by a notifiable disease within a radius of the premises...

Wendy Knowler, consumer journalist

But then something threw the cat among the pigeons - and that was Outsurance - saying 'we are honouring these claims' and actually have settled 135 business interruption claims, so far paid out 37 million rand...we've set aside 220 million rand...

Wendy Knowler, consumer journalist

The average payout is just about 400-thousand...the average payout seems rather low...but basically they pay out what their performance was pre-lockdown, they pay them that...

Wendy Knowler, consumer journalist

So they've come out great for their clients and great marketing for Outsurance.

It is not clear, however, if they will change the cover clause of an outbreak occurring within a certain radius of the business.

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This article first appeared on 702 : This insurance company says it is paying out business interruption claims

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