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Losses Because Of Crime Is a Reality!

Updated: Aug 29, 2022


Theft & Money Cover For Business


Theft Insurance

In South Africa, theft insurance is a must for any business, no matter how big or small. It is important to insure your business against theft because it can happen to anyone anytime. Business owners buy this insurance because of a fear of loss. The cover is expensive, so we want to help with some tips and share our experience.


How does a business owner decide how much coverage to buy?


The amount of coverage you need will depend on the value of your assets, the type of business you have, and your risk profile. You can buy theft cover on a first-loss basis, which means that the insurer will pay up to a certain amount, regardless of the value of your assets.

The cover is expensive, but it can give you peace of mind. We advise clients to spend as much as possible on security to reduce the theft cover needed and save money on the rate you will get because of good security.


What are the benefits of buying theft insurance?


The main benefit of this type of insurance is that it will give you financial protection if your business is broken into, and it can cover the cost of replacing or repairing your assets. You make the unknown known by paying a premium.


Do you need to specify any items under the theft cover?

No, the cover is a blanket cover and covers the contents after an event that involved physical or violent entry into or out of the building.



Summary of the defined events.

Defined Events Loss of or damage to all contents (the property of the insured or for which they are responsible) of any insured building at the insured premises described in the schedule as a result of theft accompanied by forcible and violent entry into or exit from such building or any attempt thereat or as a result of theft, or any attempt thereat, following violence or threat of violence.


What does a business owner need to know about deductibles?


Deductibles are the amount you will have to pay out-of-pocket if your business is burgled or robbed. The higher the deductible, the lower your premium will be. But remember, you will have to pay the deductible if your business is burgled, so make sure you can afford it—usually, a percentage of the claim is 10% with a minimum of R500.


Extensions to the cover from one of the wordings of a leading insurer

Extensions 1. The insurance under this section extends to cover loss of or damage to the property insured (a) caused or accompanied by: (i) a thief or thieves being concealed on the insured premises before close of business (ii) entry to and/or exit from the premises being effected by use of a skeleton key or other similar device (excluding a duplicate key) provided that the insured shall establish to the satisfaction of the company that such a skeleton key or device was used (b) whilst in a building at any additional premises used by the insured Provided that: (i) such additional premises are advised to the company within 30 days from the time the risk attaches to the company (ii) an additional premium, if any, is paid (iii) the company's liability in respect of this extension shall not exceed 50% of the highest amount stated in the schedule applicable to any one premises.

2. In addition to the limit of indemnity stated in the schedule (a) the insurance under this section includes (i) damage to the buildings (including landlord' s fixtures and fittings) at the insured premises in the course of theft or any attempt thereat (ii) loss of buildings, landlord's fixtures and fittings at the insured premises as a result of theft accompanied by forcible and violent entry into or exit from such building or any attempt thereat or as a result of theft, or any attempt thereat, following violence or threat of violence (b) the company will reimburse the insured all reasonable costs and expenses in effecting such temporary repairs and in taking such temporary measures as may be reasonably necessary after loss or damage giving rise to a claim under this section Provided that: the company's liability shall not exceed the greater of R5 000 and the amount stated in the schedule in respect of any one event.

3. In addition to the limit of indemnity stated in the schedule, the company will indemnify the insured in respect of the cost of replacing locks and keys to any insured premises following upon the disappearance of any key to such premises or following upon the insured having reason to believe that any unauthorised person may be in possession of a duplicate of such key Provided that: (a) the company's liability shall not exceed R3 000 in respect of any one event (b) the company shall not be liable for the first R250 of each and every event.

4. The term all contents includes personal effects, tools and pedal cycles which are the property of the insured or any principal, partner, director or employee of the insured in so far as such property is not otherwise insured up to an amount of R5 000 in the case of any one person. Limits differ from one insurer to the other. Compare the wordings.

Is there anything else a business owner should know about theft insurance?


Yes, specific exclusions or conditions could apply to you as a client in the schedule. The general exclusions will apply in the general section, money and the theft section policy wording.


Example of some of the exclusions in wording.

Specific Exceptions The company shall not be liable for:

1. loss or damage can be insured under a fire policy except in the case of an explosion caused in an attempt to effect entry.

2. loss or damage insurable under a glass insurance policy.

3. property more specifically insured or, unless specified in the schedule, cash, bank and currency notes, cheques, postal orders, money orders, current negotiable stamps and documents or certificates of a negotiable nature.

4. loss or damage in which any principal, partner, director or any member of the insured's household or any of the insured's employees is concerned as principal or accessory. Insurance covers in South Africa are all more or less the same for business insurance.


Insurance cover exclusion on the schedule could look like this.

The insurer can, after doing a survey, insist on security measures, for example, a gate or an extra alarm sensor. If a burglar alarm is a condition, the alarm warranty will apply.

What is not covered by theft insurance?

Insurance does not cover certain types of theft, such as employee theft, fraud, and shoplifting. It is essential to read the fine print of your policy to see what is and what is not covered.


How much does theft insurance cost?

Theft insurance premiums vary depending on the value of your assets and the type of business you have. Make sure you shop around to get the best deal.


What is the best way to prevent theft in my business?

Protect the premises with

  • Security bars & gates

  • Alarm system linked to a control room with open & closing signals and armed response.

  • Excess control

  • Camera system

  • Guards

  • Get business premises in an access-controlled area like a business park

Protection of your business remains your responsibility. Protecting your premises and taking good care of your property is a condition in the general policy wording. You have to ensure the alarm is working and switched on, gates locked and premises secure when you close for business.

Can you buy a theft cover on its own?

A business insurance policy comes as a package, and insurers can issue a policy with theft cover only, but most won't. They would want other insurance cover sections with it to make the business insurance profitable.

Example of different sections to go with theft or money cover.

  • fire insurance

  • business interruption

  • office contents insurance

  • fidelity insurance

  • accidental damage

  • liability insurance

We provide a comprehensive list of covers available on a business policy for business owners.


Is general business insurance available?

Each business insurance policy is unique, and general business insurance may be available for franchise businesses or body corporates.

Business insurance is available from several insurers in South Africa, and it is essential to shop around to get the best cover for your needs.


How does the money policy work?

The theft policy excludes cash or money. The money insurance policy provides cover for any form of money—cash on the business premises, in transit or at the premises of any director or employee.

We see the demand for money cover decrease in our client base and the reason for spending such a short time on it in the article.

Most businesses try and handle less cash because of the high risks involved.

Unless your clients pay you in cash, you can drastically reduce your need for the cover by using bank applications and card facilities and save costs on insurance.


The money insurance policy does not provide employee dishonesty coverage. Business owners need to buy fidelity guarantee insurance. To claim, the client needs proof that they suffered a loss.


Your risk exposure for businesses dealing with cash is high, and you need to speak to an advisor.

Questions and answers

Thieves walked into my shop and managed to steal a laptop without anybody seeing anything. Am I covered?

The client must be able to prove forced entry into or out of the building by visible forcible means to create an insured event. The client is responsible for verifying the claim.


I run a business from my home. I sell secondhand Hi-Fi equipment and have about R500 000 worth of stock. Am I covered under my insurance policy?

Some personal policies provide cover for home offices. If you carry stock, your policy will not cover you, and you need to speak to an advisor urgently.

My business rent the property the business operates from, and burglars damage the building to get in. Will the insurance cover damage to the building?

The policy makes provision for that but would recommend you increase it.


With all the exclusions, when am I covered then?

You have to suffer a financial loss from one of the insured events

  • Breaking into or out of the property by visible forcible means

  • Armed robbery

  • from the premises specified on the policy



Summary

Theft and money insurance are straightforward. Suppose you had a burglary or armed robbery at your premises or with money at the business premises or premises of the directors or employees. The policy covers the limits specified in the schedule, and you must comply with the security measures, i.e. alarm, safe security gates, or specifications set out in the policy schedule. Make sure you understand the policies to prevent claims from getting rejected.


Contact AS Brokers CC, a financial services provider, for a quote or a second opinion. We have worked with business owners since 1999


Albert Schuurman & Johnny Farinha both had training and worked in the business insurance departments of large insurance companies before starting AS Brokers. Our team handles claims daily and has vast experience in how insurance for businesses works.


















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