During the 70’s/80’s and early 90’s the bulk of riot damage claims paid out by the South African Special Risks Insurance Association arose out of politically motivated acts.
This trend has changed over the past 5-6 years. Labour disturbances, disgruntled commuters setting alight trains and buses, service delivery protesters targeting businesses and vehicles and student unrest have risen significantly and with violence.
Student demonstrations to date resulted in damage that surpassed a staggering R1bn mark.
Most riots occur in Gauteng followed by Kwa Zulu Natal and Limpopo. Protests change course with rapidity and unpredictability, spurred through social media. The student riots in Limpopo originated from a municipal matter in the Vuwani area before spreading to various educational institutions causing a considerable amount of damage. The housing delivery protests in Southern Gauteng started with stone throwing incidents directed at passing motorists; by evening a petrol station had been burnt causing the business owner to suffer damage to property AND a loss of income.
It is not always possible for the police to be able to contain the violence, vandalism and looting that follow. Business owners therefore need to be prepared for any eventuality. SASRIA, the state-owned Insurer is the only organisation that insures both political and non-political riot damage. Sasria Cover has to be mooted by a standard Fire policy and triggered by a Fire peril.
It is important to bear in mind that Sasria does not automatically provide compensation for Loss of Profit following riot damage. The extension is available at an additional premium for lost profit and fixed expenses thus providing financial relief if the business is facing a slow down or complete stoppage. The amount of cover and indemnity period are dependent on a number of factors that would enable a business to return to its full operational capacity. In addition to the loss of income, a number of other costs continue to exist during the restoration period – creditors, bank charges, interest on loans, rent, wages etc.
The duration of cover or indemnity period is also dependent on factors that are unique to individual businesses such as the availability of equipment, installation, rebuilding legislation, recovery of customer base – all that is necessary to be able to return to pre-loss trading levels.
Speak to us about this important class of insurance. After all, not only is it the aim of a business to pay its creditors, meet running costs and earn a profit but to be able to provide a sustainable and reputable service even during a crisis.
This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted. (E&OE)