Cape Town – A Tsitsikamma adventure business, Untouched Adventures, has filed notice to sue its insurance broker, PSG Konsult Limited, in the Western Cape High Court for R4.7 million in a case where the broker is accused of negligence in failing to insure the firm business interruption cover that would have been triggered by the Covid-19 lockdown last year.
After the lockdown was announced in March 2020, Untouched Adventures was unable to operate at all and could not generate income.
In the application to sue, the company says that the broker “had a duty to use reasonable care to see that the Untouched Adventures was insured for business interruption,” as had been requested when the insurance was acquired.
The owner of the company, Marthinus van der Westhuizen said when he got the insurance he was under the impression that the broker would call his attention to any endorsements, exclusions, conditions or burdens that were significant and that might affect the extent of the cover in relation to the premises and business.
Believing that his business was covered for the loss caused by the Covid-19 pandemic, as per his insurance policy taken in June 2019, Van Der Westhuizen called up his broker, to see if the business interruption clause of the insurance policy could be triggered.
During the call he was told that the company hadn’t ticked the business interruption cover option and so he was not covered.
Van Der Westhuizen’s attorney Menko Hoeksema argues that the broker and or its employees were negligent, and consequently breached the duty of care, and as a result his client suffered damages of R4 709.250.
In their answering affidavit, the brokers attorney Stéfan de Swardt said his clients oppose the suit as it is vague and embarrassing and won’t stand up in court.
De Swardt said that Untouched Adventures accepted a quotation for insurance and that a policy was issued following the acceptance.
They also argue that the policy did indeed cover business interruption, just not for “contagious or infectious notifiable disease” which the broker says is how the pandemic was defined.
De Swardt argues that the damages sought do not spell out how Untouched Adventure’s arrived at the figure and that the company did not provide the necessary supporting documentation to enable them to assess the claims.