Abstract
In the wake of the unprecedented COVID-19 pandemic, the insurance industry has come under scrutiny for its response to claims related to business interruptions. This dissertation delves into the multifaceted role of insurance in managing the complexities posed by pandemics, particularly focusing on South Africa's experience. Furthermore, it conducts a comparative analysis of the insurance approaches of South Africa and the United Kingdom. The research, primarily based on a comprehensive database methodology, examines the efficacy of insurance strategies, the rationale behind claim outcomes, and the interpretation of insurance policies by courts. The implications of these findings for risk management and regulatory bodies are also explored. The are two central research questions that this dissertation seeks to address. The first is the categorisation of COVID-19 insurance claims as either Category A or Category B business interruption claims. The second is the legal and interpretive methods which South African and United Kingdom courts employed to categorise COVID-19 insurance claims as either Category A or Category B business interruption claims, and how these methodologies influence the outcomes of pandemic-related insurance disputes In contrast, the United States and the UK have taken an alternative approach, considering the pandemic as a cause of "physical damage or loss."
The study advocates for a broader and policyholder-centric approach by regulatory bodies, as seen in the UK's Financial Conduct Authority (FCA) test case. Enhanced regulatory authority is needed to resolve insurance claim disputes during pandemics effectively. Regarding interpretation, there is a deviation from the default rules of interpretation in both South Africa and the UK. Courts apply purposive rules for contractual interpretation, focusing on the indemnification of losses incurred by businesses due to the pandemic. The dissertation concludes with recommendations, suggesting the need for targeted legislation to address cover for unforeseen mass catastrophes without jeopardising the insurance sector's stability. It also highlights the importance of consistent and transparent contract interpretation by courts. Furthermore, the establishment of partnerships between the public and private sectors, as seen in the United States Pandemic Risk Insurance Act (PRIA), could mitigate the impacts of future pandemics. In summary, this research underscores the evolving landscape of insurance responses to unprecedented events like the COVID-19 pandemic and the importance of adapting insurance methods and regulations to address these challenges effectively.