At Sasria, we take relationships with stakeholders seriously, one of these being the broker community. It is in this light that we recognise the importance of communication, education, appropriate advice and rendering of intermediary services, particularly as one of the biggest renewal months and last year’s remembrance, July, is approaching.
Clients have different needs and require to be adequately insured as per their risk exposure. One of the biggest insights we learned out the July Unrest is that majority of small to medium enterprises as well as a significant number of South African citizens do not know the hidden risks associated with civil unrest that could affect their livelihoods and the proximity of this risk.
We therefore ask you as a Broker, to have a full understanding of available products and the type of cover suitable for specific risks.
Sasria’s Material Damage property cover
When it comes to Sasria’s material damage property cover, this class of business covers (but not limited to) buildings, stock, contents, all risks, electronic equipment, and goods in transit.
In various engagement platforms, a common question asked by our brokers is in relation to application of the loss limit per risk address if the premium is based on the total value at risk, made up of each risk address? Firstly, it’s important to note that the Sasria loss limit is R500 million for any one insured per period of insurance. The loss limit is an annual aggregate and not applicable per risk address or event. Where the insured has multiple risk addresses, the sum insured on the Sasria policy must be the total value at risk for each risk address and a breakdown of this must be provided in the event of a loss. The Value At Risk is the policy sum insured inclusive of material damage plus standing charges and extensions relative to this coupon.
Excess of Loss
Sasria no longer offers excess of loss cover with effect from 01 April 2022. Such cover can be sourced from the open market, in respect of exposure of over R500 million, as Sasria no longer caters for this facility.
Sasria’s rating methodology
When it comes to the Loss Limit/Magnitude Discount, Sasria’s rating methodology is based on the total value at risk. To ensure that we do not overcharge our client, the magnitude discount is applicable where the total value at risk is more than the loss limit of R500 million.
To extrapolate, average is applicable where the total value at risk is inadequate, meaning the client is underinsured. Average will also apply on partial losses, the same way it would apply on an underlying policy.
It must be noted that when it comes to underlying policy extensions, Sasria cover does not automatically attach. For a client to have Sasria cover, each extension must be listed with a limit and the applicable premium must be charged for each extension.
Another common question asked by our brokers is in relation to conditions of Imminent Danger extension. This extension only covers the cost of employing additional security guards to protect the insured property prior to a loss. This cover is limited to R10 million in the annual aggregate, and not per event. For this extension to be activated, an active Sasria peril should be present within a 10km radius of insured premises. Only registered Security Companies will be recognised.
Business Interruption following Material Damage
When it comes to product rules, there is dictation by Sasria that the Business Interruption cover (financial loss) must always follow the material damage of the property listed in the policy schedule for the same period of cover. So, this means that, for a claim under Sasria Business Interruption to be considered, there must be a material damage claim, accepted in terms of the Sasria policy.
Important exclusions to note on what is not covered by Sasria.
- Customers and Suppliers
- Prevention of Access
- Fines and Penalties
- Public Utilities
- Consequential loss
The exclusions are not limited to the above. Please refer to the appropriate Sasria policy wordings for more exclusions.
To ensure that clients are adequately covered, we advise brokers to pay closer attention to administration guidelines. For instance, in a case where the Underlying Policy has been issued on a First Loss basis (the Sum Insured for the purposes of Sasria, must represent the full value). In a case where the Coupon is subject to the aggregate limits, or if the underlying policy includes property in territories where Sasria cover is not applicable (Property insured in the underlying Policy situated outside South Africa must not be included).
For more information on Sasria’s special risk insurance cover, please visit the Sasria website – www.sasria.co.za.