Over the past couple of months, we have written on decisions by various European insurers to pay policyholders for their COVID-19 related losses. That positive trend is now moving across continents.

In response to COVID-19, South Africa’s government imposed restrictions allowing only essential services to operate under a lockdown imposed in March 2020, resulting in substantial losses for corporations and small businesses. In response to policyholders’ claims, South African insurance companies Santam, Hollard Insurance Company, and Guardrisk Insurance Co. Ltd. have agreed to pay certain business interruption losses resulting from COVID-19 and related government orders. The insurance companies recently announced that they will offer settlements and interim relief to thousands of its insured businesses under business interruption insurance policies that provide coverage for losses resulting from contagious and infectious diseases.

The South African insurers’ decision comes at a time where other insurance companies are in pending litigation over the payment of COVID-19 related claims in the United States and the United Kingdom. In the UK, the Financial Conduct Authority’s action against eight insurers aimed at resolving conflicting interpretations of business interruption insurance policies recently concluded declaratory proceedings and will likely be decided next month. In the US, the insurance coverage cases are only beginning to make their way through the courts, with one federal court recently finding in favor of the policyholder in a case involving coverage for COVID-19 losses.^[1]

Perhaps the continued expansion of positive responses by insurance companies around the globe will influence insurers in the United States–many of which are actually reporting high levels of net income during the pandemic–to comply with their obligations under the policies and applicable law. This remains to be seen as thousands of COVID-19 related claims proceed through the claims and litigation process.