Outjo Lodge sues Old Mutual for N$8 million

• By Hilary Mare

VINGERKLIP Lodge in Outjo is demanding in excess of N$8,4 million from Old Mutual short term insurance company (Namibia) Limited, a claim which the hospitality establishment says was triggered by business interruption owing to Covid-19.

In court papers filed at the High Court, Vingerklip Lodge highlights that on February 2020, the  parties entered into a written  agreement in which Old Mutual undertook to insure the lodge and its facilities in terms of a ‘Hospitality and Tourism Assets All  Risk Insurance Policy’ (Policy Nr 6819843 of 2020/2021). 

The insurance cover in terms of this policy was agreed to extend for a period from the 1st of March 2020 until the 28th of August 2021.

“In terms of Section C of the insurance contract called ‘Business Interruption’, the insurance covers  any damage caused by an interruption or interference of the business carried on by the plaintiff (Vingerklip Lodge) and the insurance contract that the defendant will indemnify the insured for such loss suffered.”

Withstanding the emergence of Covid and the state of emergency that was declared soon after, Vingerklip lodge notes that for the period of the lockdown, all shops and businesses in Namibia were required to close which included the lodge thus causing a complete interruption of its business activities.

It is further alleged that the effect of it all was that damaging interruption was caused to their business activities for more than one year.  In this regard most bookings of accommodation by foreign tourists and customers were terminated, which caused a cancellation of both (from local bookings) and no income to the lodge, alleges the lodge.

“The plaintiff has made a claim under the ‘Business Interruption’ clause in the insurance contract against the defendant and gave the appropriate notice to the defendant contained in a comprehensive letter dated the 5th of October 2021, served on the defendant on the 14th of October 2021.

“The said letter notice dated the 5th of October 2021 sets out the damages and loss suffered by the plaintiff and how the sum claimed is arrived at, calculated according to the formula prescribed in Section C of the defendant’s insurance policy. The quantum of the damages claimed by plaintiff is N$8 484 843, 55.

“On the 5th of December 2021, the Defendant, acting through its attorneys, Dr Weder Kauta & Hoveka Inc., the Defendant declined Plaintiff’s claim,” Vingerklip Lodge further state in court papers further stating that they have in all respects complied with its obligations under the policy.

Apart from the claim, Vingerklip is also seeking the costs of the suit as well as further and/or alternative relief.

Old Mutual short term insurance has notified the court of its intention to defend the case.