Mutual & Federal enhances SME and Commercial Business insurance offering

Small to medium-sized enterprises (SMEs) account for more than half of South Africa’s economic output and whilst there are a number of short-term insurance products tailored to meet their needs, not all provide comprehensive indemnity with high indemnity limits for liability exposures.

Recognising this gap in the market, Mutual & Federal one of South Africa’s leading short-term insurers, recently launched an insurance cover specifically for SMEs.

“Owners of small to medium-sized commercial enterprises can now protect their businesses against potentially large liability exposures with the launch of the Umbrella Liability insurance for SMEs,” says Caroline Da Silva, executive general manager, Business Development & Sales at Mutual & Federal. “The good news is that the annual premium, relative to the cover provided offers real value for money.”

The Umbrella Liability Insurance for SMEs is an optional section available under the Multisure, AgriPlus and AssetCare Plus products and provides indemnity for damages, costs, fees and expenses which the policyholder is legally liable to pay.

The cover is provided in terms of:

• ‘Excess layer protection’ which is a straightforward excess loss of cover that provides indemnity in excess of certain minimum underlying limits.
• ‘Difference in conditions’ which provides indemnity for claims covered by the defined events of the underlying insurance but excluded by certain policy exceptions. In addition, cover is provided for claims not indemnified by events of the underlying insurance solely because the injury or damage was not accidental.
• Finally, ‘Additional Risks Protection’ involves claims indemnified by the defined events of the Umbrella Liability section but not covered by the above sub-sections. This would include indemnity for nuisance, malicious legal proceedings, defamation and infringement of copyright amongst others.

A feature of this cover is the maximum indemnity limit of R20,000,000 for policies issued in South Africa.

“I would encourage brokers to arrange this cover for their qualifying SMEs” continues Da Silva. “The competitive annual premium makes this cover well worth considering as a vital part of the business planning process.”

In addition to the introduction of the Umbrella Liability insurance, Mutual & Federal has enhanced its Multisure product to meet consumer demands and maintain its position as a leader in the short-term insurance industry.

Changes apply to new business from 1 June 2010 while existing policyholders will have immediate access to the enhanced features which include:

· Improved claims conditions - including an extension, from six to 12 months, to the period in which policyholders are allowed to take legal action on rejected claims;

· Sub limits have increased. For example, claims preparation costs under all sections, locks and keys under the office contents, money and theft sections, personal effects, tools and employees’ personal effects under the fire section;

· The compulsory first amount payable for Fidelity has been simplified to the benefit of the insured.

· Restrictive limits related to the overnight categorised safe limits under money have been increased.

Da Silva concludes, “We’ve made these enhancements for the benefit of our policyholders and will continue to find innovative ways to build our service and product offering.”

The short-term insurer is also investigating an exciting new initiative which will bring even more benefits to all its commercial policyholders.