Although your insurance policy should be reviewed annually, by paying your insurance premium you indicate for all intents and purposes that you agree to the terms of the policy. The insurance industry has endured a challenging 18 months and expectations are that policy renewals will see some significant changes. Although the Guardrisk court ruling welcomed much-needed relief to businesses affected by COVID-19, the result meant that insurers took a serious look at their policy terms and conditions.
PJ Veldhuizen, attorney, mediator and litigator who specialises in contractual matters at Gillan and Veldhuizen Inc., warns that insured parties should inspect their insurance policies under a microscope and make certain that every eventuality is considered. “It’s time to have a frank conversation with your insurance broker or financial adviser and make certain of what you are covered for. We’ve seen too many policy owners left stranded through lockdown, realising that things weren’t as they had anticipated.”
In some instances, South African insurers had refused to honour claims by companies that were adversely affected due to the national lockdown, their argument being that these claims were not covered under their business interruption policies. But a court ruling in December forced insurers to start processing some claims, with one leading insurer facing in excess of 4 000 claims. If there’s one thing the court ruling highlighted, it is that policy wording is of utmost importance.
It can be expected that policy wordings will be amended to reduce interpretation issues going forward, and insurers should be explicit in what is and what is not covered. “Most new policies and policies that have been renewed, specifically exclude Covid-19,” says Veldhuizen, but this doesn’t mean that you should not question any amendments. This is not a half-an-hour conversation to have over a cup of coffee, this is something that you actually need to sit down and apply your mind to; working through and understanding every detail with an expert eye should give you peace of mind.