Breaking News - SASRIA Net Profit Cover

 


SASRIA (The South Africa Special Risks Insurance Association) has announced an option to include cover for Net Profit as an addition to the Business Interruption cover they currently provide.

Background
SASRIA was formed in 1979 initially in response to the need to provide cover for damage as a result of politically motivated riots which the conventional insurance industry were not willing to cover.

This cover was later extended to cater for damage caused by non–political riot, public disorder (including labour disturbances, civil unrest, strikes and lockouts), as well as terrorism. Particularly relevant currently given the degree of unrest the country is facing.

Latest Development
Whilst the Material Damage cover i.e. over buildings and contents etc. has always been available, cover for Business Interruption following damage was only introduced later and is restricted to either a) the specified Standing Charges or b) Working Expenses of the business i.e. up till now cover for Net Profit has been unavailable.

We’re pleased to advise that this cover is now available at the same rates as pertaining to Standing Charges/Working Expenses e.g. where there is a 12 month Indemnity Period the cost is R634 per R1M net profit on an annual basis, or R63.40 per R1M monthly.

This additional cover is optional and will not impact on any current arrangements. It is not available on it’s own and as for the Standing Charges/Working Expenses cover it does not afford the extensions that can be purchased for conventional (non–riot cover), however, it can be a vital element in providing true compensation in the event of an incident.

Recommendation
It would be SATIB’s strong recommendation that, where SASRIA Standing Charges/Working Expense cover is in place, the Net Profit cover be considered i.e. having decided (through your having purchased the cover) that there is a risk to the business, it would make sense to extend the cover for what was previously uninsurable – the additional cost should be fairly nominal and we would suggest, is well worth it.

Where you don’t purchase cover currently for SASRIA Business Interruption we would urge that you consider the risk most carefully – the spate of lack service delivery action, industry unrest – mining and other, truck driver strikes and the like, are resulting in alarming damages with severe financial impact (where uninsured).

Please do not hesitate to contact your SATIB Account Executive for more information/guidance in this regard or you can contact Gavin George (ggeorge@satib.co.za) or Bernadine Swinny (bswinny@satib.co.za).