In delaying a decision – by Hollard Insurance Company of Namibia – to honour or to reject a COVID-19 related business insurance claim of the Namibian premier tourism development company, Gondwana Collection, it is raising suspicion against the handling of the pandemic by the Namibian government and the former presidential adviser, Dr Bernhardt Hausiku.
Namibia is internationally recognized for its handling and containment of COVID-19 fatalities the past year and various countries in Africa and Europe have opened travel destinations to Namibia, while the World Health Organisation (WHO) recommended Namibia’s vaccination roll out to countries that are not yet ready with their own programmes.
An affidavit by the Hollard MD, Richard Helmuth Aston, states that the evidence of Dr Hausiku on COVID-19 is compromised because as a Gondwana shareholder he has a conflict of interest.
Gondwana, with more than a thousand shareholders, including employees, members of communal- and farming communities, turned to the High Court of Namibia to force the short-term insurer, Hollard Insurance Company of Namibia, to honour its agreed commitments.
The court action by Gondwana stems from insured losses that Gondwana suffered due to the COVID-19 outbreak, the State of Emergency and measures implemented by the government as a result of the COVID-19 pandemic outbreak.
Hollard – in court documents – disputes the acts surrounding the announcement of a State of Emergency, the lockdown and business interruption and said they need more information to accept or deny that they have any insurance liability towards Gondwana.
Gondwana maintains that Hollard – for months – has received all the information they need and must now on an urgent basis say if they reject or accept the liability since Gondwana cannot bear the losses of the tourism sector out of its reserves for much longer.
The Managing Director of Gondwana, Gys Joubert, in his founding affidavit, says: “The tourism flagship-company has been compelled to bring a Court Application because Hollard refuses to confirm that Gondwana’s claims are covered by the policy. Hollard instead embarked on a seemingly never-ending request for information”.
“Unless Hollard agrees that it is liable, Gondwana faces serious and irreparable harm to its business, while Hollard is able to avoid honouring its obligations towards Gondwana as the insured,” Joubert divulged under oath.
Documents filed at the High Court in Windhoek under case number HC-MD-CIV-MOT- GEN 2020 confirms the intention of Gondwana to lodge its application on 31 March 2021.
In a massive COVID-19 blow for insurers Guardrisk Insurance – a subsidiary of JSE-listed financial Services giant Momentum Metropolitan – has lost its appeal against a Western Cape High Court Judgement on the COVID-19 business interruption insurance case involving Café Chameleon.
Hollard Namibia however relies on its independence and indicated that it will not follow the trend of other insurers or court cases elsewhere.
The ruling could open the way for billions of dollars more in pandemic claims against the country’s short term insurers.
South African Courts pointed out that its decision in favour of Café Chameleon was fortified by much of the reasoning in the Financial Conduct Authority case in the United Kingdom around similar claims and recent judgements in the Western Cape involving Ma-Africa Hotels vs SANTAM and Interfax vs Old Mutual. The last two cases are on appeal.
The Gondwana legal action against Hollard can open the floodgates of COVID-19 claims against short-term insurers in Namibia who are waiting for legal precedents elsewhere.
In the meantime, Hollard also gave notice of declaring a dispute between Hollard and Gondwana as to whether the proclamation of the State of Emergency resulted from the outbreak of COVID-19 in Windhoek or whether it is related to the world-wide outbreak.
Hollard also questions whether there is any permissible evidence that an outbreak of COVID-19 occurred on 11 March, because no proof is submitted that the two remains indeed tested positive for COVID-19 regardless of an announcement from the authorities.
Gondwana maintains that Hollard was supplied with all evidence that is necessary for a decision to the validity of a claim, including access to bookings under the conditions of protection of privacy of the Gondwana clients. It is accusing Hollard of delaying tactics that “forces Gondwana to approach the courts after a year of the utter devastation of the tourism industry and the serious challenge of reviving one of Namibia’s most reliable foreign valuate owners and also among the biggest employers in the national household.
Hollard Namibia contends that the policy only obliges it in respect of each premise or branch if there was an interference in business. Hollard also concludes that according to the wording, the policy only responds to a local outbreak of an infectious disease.
It also asks the court to order Gondwana to provide details of the manner in which each cancellation by a tourist and travel agent took place, the country of origin and a detailed list of those who referred to the Namibian situation when cancelled.
Gondwana said the Hollard request for details were met numerous times and it is now part of an endless quest to frustrate the process as all cooperation was rendered.
According to court documents, Gondwana does not want to argue the amount of the claim at this stage, but only asks for an order that Hollard Insurance confirms that the policy indeed approves the claim.
The tourism company employs approximately 1 100 people on a permanent basis, contributes N$202 million to suppliers, N$118 million in salaries and bonuses, N$70 million in levies and taxes to the government and an additional N$5 million to conservancies and community funds.
Approximately N$5 million in total is handed out to those Namibians in need as well as goodwill contributions to the vulnerable members of society.
Joubert said while Gondwana was relieved to realize that the devastation of COVID-19 and the State of Emergency was covered by its Hollard policy, their optimism quickly turned into concern as it became clear that Hollard is not prepared to honour its commitments in terms of the policy and therefore Gondwana now has to approach the Namibian High Court for a decision.
“From the start, it must have been clear to Hollard that it was insuring the eventuality that Gondwana’s entire operation would be affected by an infectious and contagious disease.
“If this were not so, Hollard would have been accepting a premium and issued a policy where it knew that the cover it sold would not be provided,” Joubert pointed out in his affidavit.
Gondwana said the cover was not based on the amount of the premium but instead on the comprehensiveness of the cover and Hollard was not the cheapest quote received in the process. Despite having obtained cover for precisely such outbreaks, Hollard now seeks to retract from its contractual obligations.
Joubert says although Hollard states that it is considering the claim it has provided, there is no indication of how long the process will take.
“Gondwana can simply not afford to wait any longer and must bring the application now to be heard in March 2021 or run the risk that it might not be around to pursue the claim.
Joubert points out that specific condition of the Business Interruption Section of the claim would potentially allow Hollard to avoid its obligations if Gondwana is wound up.