Ryan Woolley, CEO of public loss adjustment firm Insurance Claims Africa, says the R1bn interim relief offer made by Santam last week is more about reputational damage control than a change of attitude."It's a confusing message to send out: 'We're not settling your claim but here's some money.' "Woolley has been fighting since mid-May to get Santam and other insurance companies to pay the Covid-related business interruption claims of between R3.5bn and R4bn made by his more than 600 clients in the tourism and hospitality sector.He says by refusing to honour the contracts of their policyholders, the short-term insurance industry is "decimating their client base"."The trust has been broken. It's going to be hard to repair that."Santam's relief grant is capped at R1.5m per client. But they'll only get paid what they can prove they lost over the two months of lockdown 5 and 4.Woolley says this may help restaurants and bed & breakfast operations to hang on for a bit longer, but for the hotels and game lodges, which make up more than 200 of his clients, "it's real make-us-go-cap-in-hand stuff rather than any kind of lifeline".Since the first week of June, he and his team have been offering Santam a chance to pay out between 40% and 70% of valid claims, half now, the balance over two years."Our clients, some of whom have 12 months' cover, were up for it. It would have been difficult for them to say no. Now, after four months of hardship, they've come up with this interim relief measure."And this was only after the Financial Service Conduct Authority (FSCA) instructed Santam to settle the claims or offer interim relief pending litigation.The insurers have argued that a correct interpretation of the wording of the policies shows they were never meant to cover damage arising from a pandemic, although they provide cover for infectious and notifiable diseases."All they had to do was exclude pandemics from the policy," says Woolley, 42, a specialist in forensic accounting and business interruption claims. "Bad contracting doesn't get you out of liability."Santam's argument that a pandemic couldn't have been foreseen by the policy writers "seems artificial", he says."The reinsurers have got some of the best research facilities in the world. This is what they do, they measure risk. You've had SARS, Ebola, MERS [Middle East respiratory syndrome], avian flu, and Bill Gates in 2015 warning of a global pandemic."For us who understand business interruption policies and how they work this argument never made any sense. This is cover for this very event."If these guys have accepted premiums and made a promise, they must fulfil that promise. What's the point of a contract if they can just argue they didn't anticipate this or that happening? Then it's not worth the paper it is written on."Woolley says the local insurance industry is afraid to take on its reinsurers - big, mostly Europe-based companies such as Munich Re - which, he believes, are the "puppet masters pulling the strings". They want to avoid setting any precedent, he says. "What is needed is a focused arbitration, something that's expedited, given that this is of such national importance, so that it can get done quicker."In a precedent-setting judgment last month, Guardrisk, a subsidiary of Momentum Metropolitan, was ordered by the Western Cape High Court to pay for the losses incurred by Cape Town restaurant Caf� Chameleon resulting from the lockdown. But Guardrisk has appealed.Santam is being taken to court by the Ma-Afrika hotel group. Woolley is hoping that will give some guidance to the insurance industry and "set some firm precedents". The case comes up on September 1. But he expects a protracted legal process if the decision goes against the insurer. "If we've got to litigate in this way against every insurer, we're still going to be doing this in two years."Meanwhile, businesses prevented from reopening by lockdown restrictions have gone under and many are teetering, Woolley says. "They're being propped up by savings and loans, but their end is imminent."Businesses that collapse cannot claim, but although "delay, deny, defend" is "something that is used in the industry, I'd hate to see a South African insurer being guilty of that".He says there's never been a successful damages action against an insurer in SA over failure to honour policies. "It's more of an American thing. But in this situation where you're dragging things out, if you're only going to pay these claims in a year's time and businesses get decimated, why wouldn't they go after some form of damages action against the insurer? It's not just about honouring the policy, but about saying, 'If you'd honoured this a year ago my business would have survived.' "Woolley says Santam and the other insurance companies could have saved the industry by settling and taking on their reinsurers."They've said they want their reinsurers to come to the party because if they don't it's quite a lot for them to take on. Even though Santam has said they've got the balance sheet to pay the claims."He believes it's the boards of the insurance companies that need to be accountable."They need to stand up and say, 'We can get out of this, there is a practical solution, look at the goodwill we can buy.'"The disruption this has caused to traditional insurers is massive. They've got an opportunity to bed that down and make it right. There could have been a play made by the South African insurers with their reinsurers to settle these losses and move forward."There would have been no need for them to set a precedent. His clients would have settled without them having to accept liability. But those days are numbered, he says."If you think about it, you've got a court case that you win, you've got the FSCA coming out and saying they should pay your claim, you then have an interim relief measure. Those clients are now not thinking they should be negotiating settlements, they're thinking 'we deserve the full payouts'."And full payouts will hurt both the insurers and reinsurers substantially, he says."They could have paid a decent settlement, and they would have had clients going forward. They would have had policyholders, they would have had goodwill."..