Category Risk Management

Water rationing and its impact on insured events

06 December 2017 John Melville, Santam
John Melville, Executive Head of Risk Services at Santam.

John Melville, Executive Head of Risk Services at Santam.

As a responsible corporate citizen and South Africa’s largest insurer Santam has had to consider the impact of the drought and current water restrictions implemented by the Western Cape authorities on consumers, our clients and our business. The City of Cape Town recently announced that it had moved Day Zero to 13 May 2018 and introduced Phase 1 of its Critical Water Shortages Disaster Plan, which entails water outages during peak water usage periods in the mornings and evenings in the Western Cape region.

Herewith Santam’s position on water rationing and its impact on insured events by John Melville, Executive Head of Risk Services at Santam.


Santam is aware of statements in the media about the effect that the planned water outages could have on Western Cape consumers’ geysers, in particular. In this respect, we would like to reassure our clients that we will continue to provide insurance cover for solar and/or electric geysers per our policy conditions following an insured event where the item is ruptured or otherwise irreparably damaged. We encourage consumers to try and switch off their geysers during planned periods of water shedding. We also encourage consumers to ensure that their systems are installed by registered professionals where possible. Adherence to the design and installation specifications is paramount to ensure cover. Electrical connections/ plumbing must be completed or approved by registered professionals.

Fire hydrants and water supplies

Insurance is provided on the basis of properly functional municipal services and by-laws, but the reality is that the existing municipal infrastructure such as fire hydrants and water supplies to existing insured locations can in some instances not be reliable for fire-fighting purposes. This may also apply to the fire-brigade services and the infrastructure they depend on when they arrive on site.

This is a concern for sites with sprinkler systems that are directly fed from the municipal water supplies as well as those that top up their independent water tanks or reservoirs that feed sprinkler systems. We therefore recommend that all consumers (specifically those operating in the commercial space) carry out an assessment of their systems and the impact to their businesses given the current situation. Remedial action must then be taken to address significant gaps that have emerged in fire-protection capacity. Risk assessors from Santam will also be considering this when they carry out future surveys of our clients’ facilities.

It remains the responsibility of policyholders to adhere to the terms of their policies as well as to the applicable legislation and building and fire-protection codes. Guidance can, for example, be found inter alia in the National Building Regulations and the application of SANS 10400. Engagement with relevant municipal officials may yield some relief for the charging of sprinkler systems that have tanks and pumps. Alternate and/or additional measures such as fire breaks as legislated for under the National Veld and Forest Fire Act and clearing of alien vegetation as per the Alien and Invasive Species Regulations, could contribute significantly to the prevention of fire spread and fire loading, particularly in the case of proximity to wine farms, agro-processing facilities and timber mills.

The absolute focus should be on fire-prevention awareness and sound risk management practices on the ground. For example, activities such as hot work should be avoided in its entirety if possible to prevent the possibility of something going wrong that could lead to a large fire loss.

The Santam Group has engaged with the authorities to discuss their operational and resilience strategies with regard to this issue, and we will continue to do so in the future.

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