Insurance: Grid collapse exclusions, be prepared.

INSURANCE 
GRID COLLAPSE EXCLUSIONS
BE PREPARED

Dear employer

A number of media reports have indicated that the majority of the major insurance houses, under pressure from their reinsurers, have indicated that they will be excluding cover for damages resulting from a collapse of the electricity grid.

A collapse of the grid is defined as:

“An interruption to or suspension of electricity supply, in any manner, from whatsoever source, and for any reason (including damage and any inability and/or failure on the part of the supplier) which affects an entire municipality (including local, district, regional or any other level that is created by law) or province or the country at substantially the same time, including any interruption, power surge or suspension at the reconnection or reinstatement of electricity supply.”

Therefore, it is clear that damage, including consequential damage, due to national, provincial or local grid collapse, will no longer be covered.
 
It seems that each insurer may well adopt their own approach in respect of the extent of the exclusion and employers are advised to consult their policy wording in this regard. 
 
Employers should be aware that the South African Special Risks Insurance Association (SASRIA) provides insurance cover emanating from political unrest, riots, looting etc. (if it occurs during a SASRIA covered event). This insurance is normally acquired on behalf of a client by its insurer, if selected. However, it is possible to acquire an extension of SASRIA’s material damages cover to include cover for expenses for additional security costs, or the cost of security protection in case of imminent danger, to prevent such damages.    

Employers are advised to contact their insurers to investigate this extended cover, as additional security measures may be required to protect property should a grid collapse occur.

For more information:
NEASA Media Department
media@neasa.co.za