Capital Equipment News September 2020

INSURANCE

Notwithstanding the devastating impact of COVID-19, most Scania Insurance customers have kept their cover.

Keeping insurance cover during COVID-19 The impact of COVID-19 on the capital equipment sector is far-reaching, with many businesses experiencing crippling financial constraints. Despite the financial pressures brought about by the pandemic, it is critical for equipment owners to maintain their insurance cover to ensure security for their mission-critical assets, writes Munesu Shoko.

D isasters can be financially devastating and can seriously disrupt business. Despite the current economic hardships due to the COVID-19 pan- demic, insuring assets is a sound risk manage- ment strategy. Asset insurance passes the risk of loss or damage to mission-critical assets from the business to the insurance company. This represents a safety net that reduces the financial impact of loss or damage to expensive movable assets like capital equipment. Notwithstanding the devastating impact of COVID-19, many capital equipment businesses are keeping their insurance cover. “The vast majority of clients are maintaining their cover. We are, however, experiencing an increase in clients who simply can’t afford their insurance premiums anymore, as well as companies that had to close their doors because of the financial implications the lockdown had on their businesses,” explains Christiaan Steyn, head of MiWay Business Insurance. The same view is expressed by Neil Botha, Scania Finance South Africa’s insurance manager, who says most Scania Insurance customers have kept their cover, except for those who did not operate at full capacity. “For these clients we

have allowed them to change their cover to third party, fire and theft. This option allows for a reduction in premiums, while the assets are parked and not in operation,” says Botha. Significance of cover Just how important is it for capital equipment businesses to maintain their cover? Botha advises that even in these difficult times, it remains important for businesses to keep their assets covered to ensure continuous operation. “If you don’t want to pay your insurance premiums, you will likely not be able to afford to cover a loss. It is highly important to make sure your business is sufficiently covered should something go wrong,” he says. Steyn agrees, saying that keeping insurance cover in place is crucial. “The loss of an income generating piece of equipment could be the nail in the coffin for a business that is already experiencing financial constraints. As we head into spring, cover against acts of nature (hail, floods, among others) becomes even more important than it is in the winter months,” he says.

CAPITAL EQUIPMENT NEWS SEPTEMBER 2020 18