We are once more heading towards what is known as “Strike season”. During this time many labour organizations are entering into formal negotiations and disputes with employers and we find labour related strikes nationwide. Even though mostly peaceful – these do sometimes erupt into violence and damage to vehicles and other property.
Important Judgement made by the Constitutional Court
Last week Wednesday the Constitutional Court dismissed an appeal by the South African Transport and Allied Workers’ Union (Satawu) challenging a law that made the organisers of a march liable for riot damage resulting from a gathering.
The union had contended that the defence allowed by the Regulation of Gatherings Act unjustifiably limited the constitutional right to freedom of assembly.
However, the Constitutional Court dismissed the union’s challenge and held that the law aimed to afford victims effective recourse where a gathering became destructive and resulted in injury or loss of property or life.
In a majority judgment on Wednesday, Chief Justice Mogoeng Mogoeng said the effect of the law was to place the organisers in the first line of fire when riot damage occurred.
Innocent victims need not look any further than the organisers for compensation, or prove negligence on their part. “In this sense, the liability may be considered to be ‘strict’,” Justice Mogoeng said.
Even though many will be pleased with the judgement from the Constitutional Court – this will not help those who have suffered damage as a result of service delivery protests and illegal gatherings.
We would like to take a closer look at damage from riots and strikes and refer to and quote from a very informative article compiled by Annalise Kempen which appeared in the Newsletter of the South African Insurance Crime Bureau.
Strike Season and Riots in South Africa
South Africans have become used to experiencing what has been termed “strike season” each year, when thousands of people take to the streets at different places to protest either for higher salaries, better employment conditions or basic services such as water, sanitation and electricity. Although it is everyone’s democratic right to stage peaceful protests, the lack of peace drives many people nuts during such protests, when property is sometimes damaged, often to the enjoyment of the crowds.
The question therefore arises: from whom do you claim if you have been a victim of such destruction?
What is the South African situation?
The political unrest in South Africa during the 1970s and 1980s has contributed to the continued political and social activism and mass action of today, which has too often resulted in severe damage to property and losses in productivity and income. Sasria (the South African Special Risks Insurance Association) was established and registered in terms of Section 21 of the Companies Act in 1979, in response to the political unrest of 1976. Although its initial goal was to cover politically-motivated riots, this mandate has been expanded over the years to cover damage caused by non-political riots, public disorder including labour disturbances, civil unrest, strikes and lock-outs, and loss in respect of mortgage loans as well as terrorism.
Sasria insurance is available for both corporate and individual short-term insurance and the premiums are derived as a small percentage of premiums paid to conventional insurers.
According to an article that was published on www.insurancechat.co.za “In short, Sasria cover is designed to augment the insurance that is offered by insurers, but that is excluded on the basis of it being caused by extraordinary circumstances that the insurance companies are not prepared to assume risk for.”
What does SASRIA cover?
According to an article dated 11 August 2011, published on www.insurancechat.co.za, Sasria cover includes:
Insurance against material damage, including anything that isn’t covered by the other categories, thus functioning as a catch-all category Contract works and construction plant cover, which is obviously specific to the engineering industry
Consequential loss as an additional cover in the area of business interruption insurance
The motor policy category, which covers all types of motor vehicles
The marine and inland transit category, which involves more specific arrangements that can be made with Sasria, given that marine insurance normally offers cover for strike, riot and civil commotion loss.
In order to obtain cover for such events, clients must have a conventional insurance policy for their business, whereafter Sasria will provide add-on benefits to that insurance product and relevant Sasria claims on that policy are processed by the primary insurer.
Tips for business owners
Business owners must remember that they usually cannot claim from their business insurance policy for any loss, damage, death, injury, loss of productivity or liability that results from riots, political acts and public disorder. However, they can call on Sasria for assistance, which provides cover for damages occurring in extraordinary circumstances such as riots and strikes, says Auto & General Insurance’s spokesperson, Angelo Haggiyannes.
He further reminds business owners that not everyone can claim from Sasria, as explained earlier. “If your business happens to be in the thick of things during a protest and property is damaged, your insurance provider will process the claim with Sasria. All business insurers have the Sasria master policy which is available on request,” he said. It is very important to note that businesses can only claim from Sasria for damages resulting from events occurring in South Africa. “Sasria, for instance, would not be able to cover South African-owned companies that incurred losses at their London-based offices during the recent riots,” said Mr Haggiyannes.
However, when it comes to looting, claims can be made against the business insurance policy for losses. However, similarly to home owners who have to take adequate precautions to protect their property, a business owner should also take additional precautions such as robust perimeter walls, electric fencing, alarms and armed response.
This is not only to safeguard your business property but also to protect your assets and staff. More precautions should be taken on business premises that are located in city centres or en route to government departments, which are the routes that strikers tend to follow during their protest actions, especially during striking season. In London, many business owners erected wooden barriers against their windows in an effort to protect their shops from protesters smashing their windows.
“Adaptable” cover and special conditions Business owners are sometimes caught between a rock and a hard place during protest actions. During this year’s transport strikes, one of South Africa’s short-term insurers realised in what a difficult situation this places business owners. At the time, and for a specific period only, they increased cover by 50% for cash held on clients’ premises during the truck drivers’ strike. This decision was taken when Santam realised that “the present realities made it impossible for businesses to adhere to conditions of cover whilst the strike endures. There will be no extra cost to clients for the additional cover. Policies are clear. Cash is covered only if clients use approved transport service providers to take it to the bank. It’s difficult, if not impossible, for our clients to adhere to this condition during the strike, so we have decided to increase their cover for cash held on the premises during the strike,” said Lourens Joubert, Head: Commercial Underwriting at Santam during February 2011.
Policy holders must also note exceptions on a car insurance policy, which are those perils or risks that are not covered under the policy. While some exceptions can be removed on payment of an additional premium, there are other exceptions listed in most policy documents under headings like “specific exceptions” – those that cannot be removed under any circumstance.
One example of such an exception is that you have no insurance claim when your car is damaged while you are actively taking part in a riot of any kind or taking part in a civil commotion.
The biggest danger is to go into “strike season” without any insurance on your vehicle and other possessions. It is now the time to scrutinize those insurance policies and to request confirmation that you will be covered for any of those damages that might occur and which are outside of your control!