The devil is in the detail

Tjaart Oosthuizen, Head of Claims and Procurement at Western National Insurance

While no one could have predicted the impact of Covid-19, the economic recovery will be a difficult and arduous process, and one that will take time. This will not be eased by any further incidents that could impact a business’ bottom line. To counteract any risks (such as a fire razing the entire premises of your client’s business), correct and sufficient short-term insurance needs to be firmly in place.

Clients need to understand that “the devil truly is in the detail” when it comes to being covered appropriately. Advisers need to continuously work on conveying this highly important message to their clients; on how essential it is that clients provide relevant, up to date information, so that they can be insured sufficiently. 

Underwriting is critical

Getting this right is of paramount importance and at the very core of an adviser’s job. Each client must ensure to share accurate replacement values for their business, from its structure, to equipment, vehicles and goods it holds, manufactures or transports. Staff and other risk areas all factor to get the right cover in place. 

Covid-19 would not have been an insurable risk included in policies before the crisis hit us, but it can also be the catalyst for re-assessing whether all details or possible scenarios have been considered, to avoid any further issues leading to deeper financial damage. 

Some larger businesses may require an inspection facilitated by a surveyor, who will ensure that all aspects to cover the risk correctly are up to code or standard as required, to ensure that all insured values are accurate. Covid-19’s impact on the economy, and consequently commercial property will give rise to even more challenges, but consistent cover helps to keep the lights on. 

Fire is a major risk to be considered. Large factories are required to have valid electrical compliance certificates, which will be requested in the event of a fire. Sprinklers and other fire-fighting and prevention measures will need to be in place as well, depending on the nature of the business.  It is essential that clients understand that fraudulent claims will also be under scrutiny. The risk of arson as an example, in these desperate economic times does increase, but the reality of being caught in such an act, is much higher as well. 

Clients need to remember that insurers work closely with forensic investigators and police, so any temptation to cash in on a policy dishonestly, will have dire consequences. Fraudulent claims are not to be taken lightly as it does not only compromise your current policy but could be detrimental to attaining insurance cover in the future. 

Know the Ts & Cs

Another key detail to be aware of is any added benefits within clients’ policies. Many insurers offer an assist product, which in particular is to assist vehicle or certain other emergency claims. 

Western Assist as an example, enables clients in the event of a car accident, to utilise a specific Assist Number, which when called arranges a directed tow, and whose offering is included in the cover for their specified vehicles. Essentially an accident happens, a client or their adviser will call the Assist number, an approved tow truck is despatched by the contracted call centre, who then comes and takes the vehicle to an approved service provider (towing destination). If a client foregoes this process and deals with the tow truck operator in a private capacity (on a non-directed tow), the average cost per claim could escalate the overall cost by 20-30%, because the insurer wasn’t afforded the opportunity to confirm the repairs appropriately. 

An inflated quotation, higher storage and release fees, as well as sky-rocketing panel beating fees all add up if the correct procedures are not followed, which in turn escalates the costs for the insurer, which directly impacts the client in the end through an increased premium.

Ensuring that the client knows what is covered and what process to follow in an emergency or accident, will go a long way to reducing costs.

The key factors for clients remain that they are advised to have the correct cover in the correct manner, and to ensure they follow all procedures and stipulations as per their policy, which should lead to a seamless claims process, if and when required.