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Riot insurance
Tuesday, January 12, 2016 - 03:16
Bad choice

Sasria cover is no longer compulsory on group schemes as of 1st December 2015 but is still a vital element of insurance cover. Sasria (the South African Special Risks Insurance Association) is a state-owned entity providing cover against the loss of or damage to property resulting from civil commotion, public disorder, strikes, riots and terrorism. Sasria does not conduct business directly with the public; rather, non-mandated intermediaries write cover and collect premiums on Sasria’s behalf.
Comments Rikus Visser, CEO of PSG Insure, “Previously it was a default of short-term insurance policies. But as it is no longer compulsory to have, advisers will now need to bring up Sasria cover with clients, who can then choose to opt in or out. In today’s environment, with increasing strikes and unrest as a result of challenging economic conditions, it is vitally important to ensure that clients are well aware of their Sasria cover.”
The basic reason that Sasria cover is no longer compulsory is due to the changing regulatory environment, specifically Treating Customers Fairly (TCF). The automatic inclusion of this cover in policies was considered to be contrary to the principle of giving customers a choice. However, in PSG’s opinion, it is vital for you to inform clients of the importance of this cover.
Sasria, meanwhile, suffered a sharp decline in profit for the year to end-March. This was due to a significant increase in claims related to strikes and service delivery protests (the frequency of claims increased by 54%). Ongoing protests across the country about university fees and outsourcing will no doubt also result in damage – and in further Sasria claims.
Clients with personal insurance should also consider Sasria cover, as their vehicles, homes and other personal property could be endangered by a protest or similar event. For example, a client who parked his car in the Cape Town CBD for an appointment returned to find that it had been damaged by protestors marching through the city. Such damage will not be covered by the standard underlying policy of the insurer. 
Sasria cover is offered in various classes including:
Material damage - This covers damage to a wide range of personal and commercial assets, and can be applied to all or some of the insured’s property. The following risks form part of this cover:
Business interruptions - This cover can only be effected if there is material damage cover in place and includes goods in transit. The alarming increase in truck hijackings makes this cover especially pertinent. It also applies to boats and other vessels and crafts.
Money - Cover for lost or stolen money is also issued under the material damage section.
Construction risk - Sasria’s construction all risk cover is available for building contract risks, civil contract risks, contract works, contractors (all risks), demolition sites (all risks), erection sites (all risks), plants (all risks) and plant hire.
The annual aggregate F1, domestic and F2 commercial risk limit is R500 million for anyone insured. This applies to material damage and standing charges/working expenses only. For these to be effective, the insured must have Sasria material damage cover for the same property.
Sasria covers property situated in South Africa and South African waters. Sasria also has a reciprocal agreement with NASRIA (a Sasria-like institution in Namibia), whereby if the insured has a Sasria policy and is temporally in Namibia, the policy will cover Sasria-related events in Namibia (and vice versa).
Motor
This cover applies to motorcars, light delivery vehicles, commercial vehicles, motor fleets, motor traders, mobile plants, taxis, bus rapid transport (BRT) vehicles and trailers. The Sasria motor policy is a standalone policy and does not attach to the terms and conditions of an underlying policy.
“Given the prevailing economic climate and recurring bouts of unrest, we urge you to make sure that you discuss Sasria cover with your clients,” says Visser.

Copyright © Insurance Times and Investments® Vol:29.1 1st January, 2016
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