Business Interruption Insurance…Interrupted

The Constitutional Court judgment attempts to resolve several questions regarding the constitutional approach to the judicial interpretation of contractual terms and, in particular, the public policy grounds upon which a court may refuse to enforce them.

In this article, we look at the recent judgement delivered in in the Western Cape Division of the High Court of South Africa in the matter of Café Chameleon CC v Guardrisk Insurance Company Limited. This judgement is a huge blow to the insurance industry, which has taken the position that claims lodged in the wake of the national Covid-19 lockdown implemented by the government with effect from 26 March 2020, are not covered by the Business Interruption insurance policies issued by them. This judgement creates a precedent and a legal basis for a potential pay-out of Business Interruption insurance claims and indeed, possibly opens the door for an avalanche of litigation and further claims.