SATIB Insurance Brokers has joined forces with the Financial Intermediaries Association (FIA) – as part of the newly formed COVID-19 task team – to lobby the Financial Services Conduct Authority (FSCA) for fair responses to Business Interruption (BI) insurance claims for the tourism sector.

FSCA is the market conduct regulator of financial institutions, including insurers.   

This comes after many in the tourism sector have had to find out the hard way that although they had taken out BI insurance, they had focused on the standard BI policies and not taken the policy extensions covering issues such as infectious diseases or cancellation of bookings.

“Furthermore, even though some tourism companies have taken out BI extensions, there has been some debate on the interpretation of the wording of these extensions,” said Executive Head of SATIB, Dewald Cillié, pointing out that some insurers were viewing the disease extension as only applicable where there was a localised case of COVID-19 and the loss of income due to business being interrupted by that localised COVID-19 situation.

“An example of this would be that a hotel or lodge owner would need to prove that he had a positive COVID-19 case from one of the guests in his establishment and that he needed to close for a certain period to sanitise his property,” Cillié explained.

“We have been advocating from the outset for a fair and socially responsible approach from insurers or our entire industry and, to that end, we have joined forces with the FIA.”

In a recent SATSA webinar, FIA CEO, Lizelle van der Merwe, highlighted the key objectives that this task team had set out to address:

• A fair and reasonable approach to claims that are covered in terms of policy wording 

• A responsible response to COVID-19 

• Prompt resolution to all claims submitted and resultant matters and disputes 

• Fairness regarding Cancellations of Bookings cover where cover was cancelled mid-term.  

“The primary aim has been to impress upon the FSCA the impact of COVID-19 on the tourism sector and the need for critical, urgent action. Insurers’ behaviour toward the onerous burden of proof was a major part of the considerations put forward in our interactions with the FIA,” said Cillié.

He noted that SATIB was pleased to say that the FSCA had acted swiftly and had issued a directive late last week. This includes looking at the various insurance policy wordings.

“We are unpacking this directive and will advise our customers, and the wider industry, on what this means for them,” he said.

“The ramifications for the industry as a result of this directive, and the FSCA’s request for insurers to act accordingly, will be significant,” said Cillié.

He added that, despite this clarity on various issues, there were still aspects relating to individual policy wordings and risks that needed to be worked through in more detail.

“We will pursue these to the fullest, endeavour to answer all your queries, and continue in our negotiations with Insurers to ensure we steer your claims to fall in line with the FSCA’s view.”