Is your community scheme insured against strikes, riots and terrorism?

The Sectional Titles Schemes Management Act – and more specifically Regulation 3 – states that bodies corporate must insure against “riot, civil commotion, strikes, lock-outs, labour disturbances or malicious persons acting on behalf of or in connection with any political organisation.”

Ordinarily, these risks are excluded from most policies globally, including standard South African policy wordings.

Sasria

State-owned insurer, Sasria, does cover such risks and provides special risk cover to all individuals and businesses that own assets in South Africa, along with government entities. This makes South Africa one of the few countries in the world that provides this insurance at affordable premiums.

Historically, Sasria SOC Ltd was established after the increase in protests following the 1976 uprisings. The name Sasria originates from its original foundation – South African Special Risks Insurance Association. As no insurance covered assets against strikes and riots in the private sector domain, the government at that time decided to fund and manage its own short-term special risk insurance company focusing on political risk. Sasria SOC Ltd’s mandate was extended in 1998 to provide cover for non-political perils such as strikes and labour disturbances.

At a recent national insurance training roadshow, the disturbing increase in non-political events such as transport sector actions and Fees Must Fall protests was highlighted. It raised the awareness that South Africa has a well-structured insurance infrastructure with both the private and government sectors providing cover against disaster. The recent increase in riot and strike-related claims is quite disturbing. Sasria’s claim tempo and ratios are viewed by some as a barometer of South African society, particularly in terms of socio-economic dissatisfaction.

The role of brokers

Brokers need to ensure that Underwriter Management Agencies and insurers who issue policies of insurance to bodies corporate include Sasria cover and that the correct rates have been applied. Commercial sections and residential use sections must be accounted for, and in cases of mixed use, two coupons are necessary.

Sasria claims are similar to other claims, as the same process is followed, but it takes a bit longer because the claim is redirected from the insurer to Sasria for due process.

Although not stipulated in CSOS regulations, we advise Home Owners’ Associations as well as other community schemes to acquire Sasria cover. At this stage, it is only compulsory for bodies corporate