Insurance policies may not cover assets damaged by strikes
South African businesses and consumers are at risk of incurring significant losses as a result of the wave of nationwide strikes sweeping the country should their insurance coverage not have been extended to include cover for damage and business interruption as a result of Strikes, Riots and Civil Commotion available through SASRIA.
According to Dave Marais Large Market & Corporate Consultant at Aon, standard insurance policies available through private sector insurers do not provide cover for damage to assets as a result of these types of events as they are precluded from underwriting these risks. ”The only cover available in South Africa in this regard is through state owned insurer – SASRIA LIMITED”
SASRIA LIMITED, which was originally founded to provide cover for politically motivated riots, now covers damage caused by riot (both political and non-political), public disorder, including labour disturbances, civil unrest, strikes and lockouts. It is the only organisation in South Africa authorised to provide insurance cover for losses caused as a result of these types of events.
Marais says both Businesses and Consumers need to consult with their brokers/insurers to ascertain whether their insurance coverage has been extended to cover SASRIA PERILS. He adds that brokers and insurers should offer clients this type of cover when discussing their business or personal insurance requirements as this presents a significant risk to both consumers and business owners who could find themselves severely out of pocket if their assets were damaged during a violent strike.
He says this is especially important for people who live, work, and commute in or have businesses in areas that have a high propensity for strike action. “SASRIA may not decline your request for cover”.
According to Marais, all SASRIA rates are regulated and for businesses the premium is not affected by the type of industry or the risks the business is exposed to. For businesses with substantial assets and revenues there are magnitude discounts available to discount the premiums. However, cover provided by SASRIA is subject to a maximum limit for any one loss and any one insurance period per client to R 1 500 000 000
The SASRIA cover in terms of Business Interruption is limited to Fixed Standing Charges and does not extend to include cover for Net Profit and consequences resulting from similar damage occurring at the clients Customers/Suppliers/Public Utilities premises. This cover can be purchased from the private sector to ensure the client enjoys similar cover to that provided for losses arising from Non SASRIA perils.
He says that for consumers, this cover is relatively inexpensive. “For example, on a R2 million house, the annual premium is roughly R72 per annum, while a vehicle owner could pay as little as R20 per annum.”
“With a high possibility that one or more strikes in South Africa will turn violent at some point in the next few months, it is crucial to ensure that your insurance policies are correctly structured so that you do not suffer unnecessarily as a result of damage to your property,” concludes Marais.
