It is a good idea to check the fine print to find out exactly where you stand when losses are sustained during the regular power cuts we are so privy to.
Load shedding has become part of our lives, therefore policyholders need to contact their insurance brokers to clarify the exact amount of cover when it comes to the impact of power outages on their businesses.
When is business loss a result of power cuts and what is covered by insurance?
- Financial losses that are suffered as a result of the interruption of your business is usually covered by what it known as business interruption insurance.
- This type of policy covers your business for the financial losses suffered following the interruption of your business.
- To put in a valid claim the interruption to your business had to be caused directly by one of a specific list of insured perils – these range from burst water pipes and geysers, acts of nature such as flood and hail storms, explosions etc.
- Power blackouts, surges as well as dips are not generally covered by the interruption of the public supply of electricity, telephone service breaks, water or sewerage disruptions amongst others will be covered by most insurance companies; furthermore, the interruption must persist for an uninterrupted period of 24 hours.
Businesses are only covered for electricity blackouts if the interruption is caused by damage as a result of fire, lightning or impact.
Business policies, as a general rule, do not cover situations where power is withheld deliberately by the provider or where the interruption is a direct result of the utilities being unable to supply sufficient power when load-shedding takes place.
Ways to protect your business from losses caused by power outages:
- Many companies install UPS systems, but this does not always protect sensitive equipment from surge damage as it only protects equipment to a certain extent.
- Businesses are encouraged to install surge arrestors as well as supplementary protection – which can cost a little or a lot, all depending.
- The damage that is caused by surges and dips is usually covered under the buildings, contents and electronic equipment sections of insurance schedules.
- The building section of an insurance schedule typically protects immovable plant machinery, alarms systems, the monitors of gates, intercoms and pumps for swimming pools.
- The contents section covers items which includes moveable plant and machinery, electrical items, equipment for the kitchen as well as refrigeration.
If you are worried about power surges and whether you are covered for these, contact your insurance broker to ensure you are protected against all eventualities – there is no time like the present.