As the reality of load shedding hits South Africa, business owners who understand exactly what they're covered for, could be better off.
Load shedding has a serious impact on industries that rely on continuous electricity production but sometimes even short disruptions to electricity supply can cause problems.
For a business manager, nothing is more frustrating than not being able to plan properly or finding out you're not covered for a power surge that was outside of your control.
We take a look at some of the business risks associated with load shedding and what types of damage or loss Santam will cover.
Cover for 'faulty' security measures
When there is load shedding there is a good chance that your business' security measures may be affected, which may raise concerns around the safety of your premises and insurance cover.
For example, if you secure your business premises with a motorised gate or electronic safety boom, you may want to consider back-up power. You may also wonder whether you are covered should these mechanisms not work.
At Santam, we understand that load shedding can result in faulty security measures that work with electricity. These circumstances are generally considered "beyond your control".
Santam will consider a claim for theft where the security systems did not function properly as a result of load shedding (or power surges) very seriously and in most cases, we will cover you in the event of loss or damage to your business if the circumstances were beyond your control.
Cover for your back-up generator
With load shedding set to continue for some time, many business owners are having back-up generators installed professionally.
At Santam, we consider fixed generators (generators that are permanently installed on your premises) as part of the structure of your business building and therefore it will be covered under the buildings section. A portable generator will be covered in the as part of the contents of your policy.
Cover is also available for the breakdown of your generator and you can extend your insurance cover to include the deterioration of your stock following the breakdown of your generator.
When there is load shedding, power surges may occur. Power surges happen when the electricity returns after an extended outage, sending an increased flow of current to a wall socket or an electrical box. This has the potential to damage your business equipment.
In this instance, Santam has extended its cover in terms of the Fire, Buildings Combined and Office Contents' sections to include R50'000 in respect of power surge damage. You may increase the limit under the Accidental Damage section but it is very important that you check if there are any exclusions in your policy schedule that you need to be aware of.
What about business interruption?
You may experience a drop in sales, reduced turnover and even additional expenses as a result of a power surge, which can lead to damaged stock or broken machinery. This is why Santam offers business interruption cover.
Business interruption cover entails insurance for gross profits, gross rentals, gross revenue and the additional increase in the cost of working.
In recent years, this type of cover has specifically been extended to include loss or damage as a result of power surges.
If you're a vigilant business owner who takes good care of your business premises by ensuring that the proper safety measures are in place and that you're aware of what you're covered for, your insurer will likely consider your claim favourably in an instance where damage or loss to your business was outside of your control.