Capital Equipment News September 2020

Key adjustments Amid the current financial constraints bedevilling many businesses, several insurers have implemented a series of solutions across their various products to provide flexibility and support to qualifying clients so that they may continue to be covered. “As a broker it is a difficult situation for us,” says Botha, “however, we are aware of our customers’ needs during these difficult times, and have provided fitting solutions where needed. For example, the insurers we are in partnership with gave our customers a 20% discount on premiums from April to the end of July,” he says. During the hard lockdown in April and May, MiWay offered its clients automatic premium relief of over R40-million in total. “We have tailored cover for many Business Insurance clients to assist them through this difficult period until their businesses pick up again by reducing cover, removing perils, increasing excesses or temporarily pausing cover for a period,” says Steyn. “For example, equipment that is currently stationary at the business premises and not operating on-site still needs to be insured for theft but accident cover can be paused for the period that the equipment is not being used.” Rethinking insurance COVID-19 has forced many businesses to rethink their business and do things differently, and the insurance industry is no different. What are some of the changes we are likely to see in the insurance sector post COVID-19? Insurance solutions are likely to become more usage-based, says Steyn, where the premium paid more accurately reflects the exposure in a given period rather than being based on the average exposure over an annual period. “The last couple of months made us all realise that we need to accept the things that are out of our control and focus on those that are within. Businesses should consider structuring their insurance so that the financial implication of an unforeseen incident becomes something within their control and not beyond. By choosing insurance cover with a fixed excess structure instead of a percentage-of-claim value excess means a business knows exactly what the financial implication of an incident will be on their cashflow,” explains Steyn. According to Botha, Business Interruption (BI) will be looked at differently. “BI policies usually pay out only if physical damage occurs to an organisation’s assets or operations. I am sure we will see insurers underwrite this differently in the future and have more extensions and clauses to this product, and some might even provide more cover than the current BI cover,” says Botha.

MiWay has tailored cover for many Business Insurance clients to assist them through this difficult period.

QUICK TAKE

Despite the current economic hardships due to the COVID-19 pandemic, insuring assets is a sound risk management strategy

Notwithstanding the devastating impact of COVID-19, many capital equipment businesses are maintaining their insurance cover

Scania South Africa’s partner insurers gave Scania customers a 20% discount on premiums between April and end of July

During the hard lockdown in April and May, MiWay offered clients automatic premium relief of over R40-million in total

CAPITAL EQUIPMENT NEWS SEPTEMBER 2020 19