After more than seven months of one of lockdowns, South African
businesses have shown that they can adapt to dramatically changed
As the country moves between different levels of lockdown,
circumstances continue to change, and business continue to adjust.
An easily recognisable pivot, for instance, was that of clothing
manufacturers who started producing cloth masks and personal protective
equipment (PPE) for health workers and the general public. However, in most
scenarios where businesses pivot, their risk profile change, and their
insurance requirements also change.
Here are a few scenarios and how they would change a business
insurance risk profile:
A clothing store that switched to an online distribution model
Switching to an online distribution model carries new risk related
to how you store your customers’ data, particularly considering the Protection
of Personal Information Act (POPIA).
From 1 July 2020, South African companies have less than one year
to ensure compliance with POPIA, which targets the containment of negligent
usage or the misuse of personal data, as well as the protection of privacy
A restaurant that started incorporating deliveries to replace
The restaurant would have to buy delivery vehicles such as
motorbikes to deliver the meals. It would have to contact its broker or insurer
to add the delivery vehicles to its insured assets and would also need to take
out the appropriate vehicle insurance to cover the increased risk due to the
change in profile of the business.
Physical addition of perspex dividers and security gates to
reinforce physical distancing
The additions of perspex dividers and security gate could
potentially improve the security profile of the business. It is extremely
important to advise your broker or insurer of additions and alterations to the
insured property, while the contractor is on site as well as making sure that
the appropriate short-term insurance cover is in place during the alterations,
in complying with Covid-19 regulations.
Furniture companies which saw increased sales during the lockdown
As more people started working from home, the sales of furniture
such as chairs and office desks spiked. Furniture companies would have had to
contact their broker or insurer to advise them of a change in order frequency
as well as the increased stock kept in storage. These companies may also have
had to increase their transit insurance since the furniture remains the
liability of the company until it is delivered to the buyer.
Companies who pivoted to use their vehicles for deliveries
If companies were specifically now offering their vehicles as
delivery vehicles on behalf of other companies and not just for own use, they
would need to advise their broker or insurer of the change in use of vehicle as
well as take out transit insurance for any goods that they transport.
The overall effect of the new work-from-home policies is that
previously there were some assets that were typically kept at work such as
printers or desktop computers.
If you have now given your employee permission to take and use
those assets at home, you have to inform your broker or insurer so they can
extend the cover on those assets to all risks cover or extend the policy to
cover these assets while they are in the possession of your employees.
The world in which your business operates and the way in which it
operates is going to change faster than ever before. Just as your business had
to adapt to a ‘new normal’, you need to regularly step back, reassess your risk
and make sure that you adapt your insurance so that you are correctly and
For assistance with identifying the risks facing your profile please contact us
on any of the following methods:
* Telephone 0315021922
* Whatsapp 0824508720
* Email firstname.lastname@example.org
* Website www.esbrokers.co.za
Article featured in Insurance on line, written by Malesela
Maupa, Head of Product and Insurer Relationships at FNB Insurance Brokers