Source: Zimnat ordered to pay US$1,4m claim – herald
Fidelis Munyoro-Chief Court Reporter
Zimnat General Insurance has been ordered by the High Court to pay US$1,4 million to Spencers Creek (Pvt) Ltd after the court ruled that Covid-19 triggered business interruption cover under an insurance policy issued to Ilala Lodge in Victoria Falls.
Delivering judgment in Bulawayo, Justice Mpokiseng Dube ordered the insurer to pay “the sum of US$1 400 000 . . . being monies due to the plaintiff in terms of the insurance contract entered into between plaintiff and defendant,” together with interest at 5 percent per annum and costs of suit.
In a related matter, the court also ordered Zimnat to pay US$1 066 239 to Africa Albida Tourism and Victoria Falls Safari Lodge Hotel under a similar policy.
The claims arose from business interruption insurance policies covering losses resulting from the occurrence of a “notifiable contagious or infectious disease” at insured premises during the Covid-19 pandemic.
The plaintiffs told the court that two tourists, Mr and Mrs O’Shaughnessy, stayed at Ilala Lodge between March 7 and March 10, 2020, and later showed Covid-19 symptoms.
Employees who interacted with the couple also became ill, while other staff members later developed symptoms after contact with infected colleagues.
The businesses later shut down following the Government’s national lockdown directive issued in March 2020.
Zimnat rejected the claims, arguing that there was no proof that Covid-19 had occurred at the premises and that the symptoms described could have been caused by influenza, malaria or side effects from medication.
The insurer also argued that the claims had not been properly notified and challenged the financial calculations used to quantify losses.
Justice Dube rejected those arguments, finding that the plaintiffs had proved their case on a balance of probabilities.
“Applying the following dictum to the present matter on a balance of probabilities, I am convinced that indeed the O’Shaughnessy couple suffered from Covid-19,” the judge said.
The court accepted evidence from medical expert Dr MD Jeans, who testified that the symptoms and chain of contact were consistent with Covid-19 infection at a time when there were no testing facilities in Victoria Falls.
Justice Dube dismissed the evidence of the defendant’s expert witness, Dr Knowledge Chemayi, saying: “I am convinced that Dr Chemayi indeed played per the script presented to him. I thus reject his testimony as being biased.”
The judge also ruled that the insurer had accepted notification of the claims after receiving an email from insurance broker Desmond Stevens on March 23, 2020.
“My understanding of this exchange is that the notification is accepted as sufficient and valid,” Justice Dube said.
The court criticised the insurer for requiring the plaintiffs to complete a “Fire, Lightning, Storm Claim Form” for a pandemic-related insurance claim.
“I am of the respectful view that this claim form was never designed for a claim such as the present,” the judge said.
Justice Dube said the pandemic had exposed gaps in the insurance sector’s preparedness for Covid-19-related claims.
“What this letter tells in plain truth is that the defendant in its position as an insurer was taken by surprise by the pandemic and resultant claims,” the judge said.
The court found that the interruption to the plaintiffs’ tourism businesses fell within the policy cover.
“I am convinced that the plaintiff’s business was interrupted due to the occurrence of Covid-19 at their premises,” Justice Dube ruled.
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