How Load Shedding Can Affect Your Buildings Cover Claims
Imagine a bustling café in the heart of Johannesburg, its ovens working overtime to cater to the morning rush. Suddenly, load shedding strikes, and the ovens go cold. This isn’t just a minor inconvenience. For the café owner, it’s a potential financial disaster.
Load shedding can lead not only to lost revenue but also to unforeseen damages like spoiled food and compromised equipment. This real-life scenario can easily become your reality as a business owner in South Africa. The question is, when disaster strikes because of load shedding, are you covered?
Does Buildings Insurance Cover Load Shedding?
In South African insurance policies, the coverage for load shedding under buildings insurance can be complex. Typically, load shedding itself, being a scheduled and controlled event, is not covered as it’s not considered an unforeseeable incident. However, damages resulting from load shedding, like power surges and geyser malfunctions for example, may be covered by this type of insurance.
Whether it’s covered depends on the specific terms of your policy. Some insurers might include this cover automatically, while others may offer it as an optional add-on. It’s essential for policyholders to review their buildings insurance policy or speak to their insurance provider to understand the extent of coverage related to load shedding and associated damages.
Can Load Shedding Lead to Accidental Damage Claims?
Yes, load shedding can inadvertently cause accidental damages. For example, power interruptions might lead to machinery malfunction in industrial buildings, causing structural damage. It’s essential to verify if your policy covers such accidental damages and under what circumstances.
What is the Impact of Load Shedding on Buildings Insurance Claims?
Load shedding can affect buildings insurance claims in a few key ways. It can potentially cause insurers to scrutinise claims more closely, especially for damages that are commonly associated with power surges and outages. This scrutiny may lead to delays or disputes in claim processing if the policy terms are not clear about coverage for such incidents.
Additionally, frequent claims related to load shedding might impact your future premiums or the terms of your policy renewal. That’s why it’s important to understand how your policy addresses load shedding-related damages and to maintain clear communication with your insurer regarding these claims.
In Cape Town, a boutique store faced a significant setback due to load shedding. A sudden power surge during the restoration of electricity caused damage to their sophisticated point-of-sale systems and led to the loss of crucial sales data. Fortunately, their comprehensive buildings insurance policy covered the cost of replacing the damaged equipment and provided compensation for the business interruption. This timely assistance from their insurance company not only helped in quick repairs but also ensured that the store could recover its lost data, maintaining customer trust and business continuity.
What Are the Increased Risks Due to Load Shedding?
A buildings insurance package is not meant to cover all risks related to your business. You may need a more comprehensive insurance solution that combines different types of cover to protect your company from all the risks associated with load shedding. Buildings insurance can cover damage to gardens, water pipes, damage to swimming pool, and losses and damages to permanent structures, to name a few.
But it’s not meant to cover portable items, vehicles and business interruption, for example. This is why it is important to understand the risks involved with frequent load shedding, so that you can ensure your cover is comprehensive enough to protect you if such an unfortunate event were to occur.
1. Break-Ins, Theft & Vandalism
During load shedding, the reduced visibility and disruption of security systems can significantly heighten the risk of theft and vandalism for businesses. This increased vulnerability can lead to a spike in break-ins and property damage.
2. Damage to Buildings
During load shedding, the sudden loss and restoration of power can cause power surges, potentially leading to electrical fires or damage to the physical structure of your building. This includes damage to integral systems like air conditioning, security systems, and more.
3. Other Impacts on Commercial Buildings
Load shedding impacts electrical systems, but it can also affect other aspects of your building’s integrity. For instance, prolonged outages may lead to issues with water pumps, affecting buildings with swimming pools or irrigation systems. Furthermore, security systems reliant on power, like electric gates and remote control units, can become compromised.
4. Rental Income and Alternative Accommodation Claims
For businesses that rely on rental income, such as guesthouses or commercial landlords, load shedding can lead to loss of income. If your building becomes uninhabitable due to load shedding-related damages, your buildings insurance policy might cover the cost of alternative accommodation for tenants. This aspect is crucial to ensure continuous rental income during repair periods.
How Can Businesses Protect Themselves Against Load Shedding Damages?
1. Tailor Your Portfolio for Comprehensive Cover
Given the diverse impacts of load shedding, it’s advisable to work with insurance professionals to customise your insurance portfolio. This ensures comprehensive cover, including aspects like emergency services, repair costs, and coverage for both the building’s physical structure and its permanent fixtures, portable possessions, and other unforeseen events.
2. Take Proactive Protective Measures
To safeguard against load shedding-related damages, installing surge protection devices and maintaining electrical systems is crucial. Additionally, consider backup power sources like generators or UPS systems to keep critical operations running. This proactive approach can help in preventing data loss and minimizing potential damages.
3. Protect Your Building’s Valuable Assets
It’s important to safeguard valuable assets within your building, such as solar panels, tennis courts, or swimming pool filters, which might be affected by power surges or interruptions. Taking preventive measures and ensuring these assets are included in your buildings insurance can provide additional peace of mind.
4. Review Your Buildings Insurance Cover
Regularly reviewing your buildings insurance policy ensures that your cover remains relevant to your current needs, especially in light of load shedding risks. It’s advisable to discuss with your insurer whether your policy adequately covers damages from power surges or other load shedding-related issues.
Don’t let load shedding disrupt your business operations or affect your insurance claims. Ensure you have comprehensive buildings cover that includes protection against load shedding-related damages. Or you can fill in our 1-minute online form today for free affordable insurance quotes from one of South Africa’s leading business insurance companies.
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