Insurance … make sure you are fully covered!

Sadly a popular restaurant and bar in Sandton suffered extensive fire damage last Saturday.  This is a reminder to all of us, to ensure there are not any gaps that might leave you vulnerable and uncovered when you thought you were in fact covered.

Neil Andrews of Andrews Insurance Brokers in brief outlines some of the vital parts of a customer understanding a short term policy purchase (it is not possible to cover all aspects here).  It is always a good time to meet with your Insurers to ensure that you have provided them with all the information – so you are not left uncovered in the case of a claim.

Occupation of the business

It is of utmost importance for a customer to document their business activities correctly on the policy. Failure to do so can result in claims rejections due to nondisclosure of material information/fact. Should the occupation change during the insurance period this must immediately be notified to the Insurers.

Under Insurance (The average clause)

This is possibly the most important clause for a customer to understand. In all policies where you find this clause, it must be understood and explained to a customer. A building for example must not be insured for the market value. It is imperative for a customer to obtain the services of a qualified Insurance valuator in order to avoid under insurance at all costs. Over insurance will also be avoided if the value is in fact less than the sum insured. There are also asset valuators for the balance of the company’s assets. We understand the costs of this service but it can save a customer millions of rands as well as avoid long-winded disputes at the claims stage.

Defined Events conditions, terms, exclusions, exceptions and excesses.

Each section of a policy chosen by a customer has a section explaining the defined events insured. It is important for a customer to understand what cover they have purchased. It is equally important for a customer to understand and take note of all the conditions, terms, exclusions, exceptions and excesses stipulated in the policy.

Public Liability

Public liability offerings are vast and customers must be made aware of all these products and how they may affect each individual business. When a customer purchases a general liability policy they are of the opinion that this will cover any occurrence that may arise in the course business only discover the outcome at the claims stage which can be disastrous.

Accuracy of information

Accurate information must appear on the policy schedule at all times. It is advisable that a customer check the information on the policy to ensure that all information provided is true and correct.

Ensure you have informed your insurers of any specific activity such as a Fireworks Display, Festival et al that is not part of your usual business, as this might be a shift in risk.  If you have not notified the insurers, there might be a problem with the claim, even if you have been granted the necessary permissions by the local Council, Disaster Management, Fire Departments or even if the operator was qualified to set off the fireworks – there still might be a problem with this claim. 

Basis of settlement

It is extremely important for a customer to understand the basis of settlement on each policy purchased. For example, a motor policy is based on the book retail value of a specific vehicle. Most other policies for example electronic/computer equipment, office contents and the like will be based on new replacement value. If this has not been calculated correctly when the customer purchases the policy the average clause (underinsurance) can be applied resulting in a loss to the customer at the claims stage.


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