Business owners should understand the potential damage that power outages could cause to their valuable equipment – the installation of surge protectors to essential or sensitive electrical electronic equipment needs to be considered, even if it is not a prerequisite by business insurance companies.
- Damage to equipment caused by power surges and dips is usually covered under the buildings, contents and electronic sections your insurance policy.
- The contents section will cover items such as moveable plant and machinery, electrical items, kitchen equipment and refrigeration equipment.
- The buildings section of your insurance covers items such as fixed plant and machinery, your alarm systems, gate motors, intercoms, boreholes and swimming pool pumps.
- Although many companies have a UPS system in place to protect their delicate equipment from lightning and power surges and outages, this does not always shield the equipment from surge damage as it only offers partial protection.
- Businesses are therefore urged to install surge arrestors and additional protection – and because it could cost anything from as little as R200 to R2 000 – all depending on a specific product and installation fee, it may be well worth the cost and effort.
Financial losses as a result of the interruption of your business are covered by what is known as business interruption insurance.
This type of policy covers your business for the financial loss suffered following the interruption of your business.
To have a valid claim, however, the interruption to your business should have been caused by one of the insured perils which could include fire, explosion and acts of nature such as flooding, the bursting of water pipes, malicious damage or impact.
Power surges and dips are not covered under business interruption cover, but an interruption of the public supply of electricity, telephone service, water, sewerage or gas will be covered by business insurance companies – best to check this out right from the outset.