‘Don’t skimp on insurance cover’

There’s a strong insurance warning for exporters moving minerals, raw materials and mining products in Africa – skimp on security and you risk having your claims rejected. Deteriorating infrastructure, theft, hijacking and lax border controls all contribute to a high-risk environment and mitigating this risk is essential, says Hugh Reimers: director of Eikos Risk Applications. Various levels of risk are involved in the transportation process and companies have developed innovative solutions to mitigate the risk during the shipment process, he added. “Copper, for example, is shipped in various forms, some of which present a higher risk than others. Copper ore is less of a problem as it still needs to be smelted and processed. However, copper blisters or ingots present much more of a security risk as these are already in a solid metal form and can be readily sold without any further processing. Cobalt, another example, is incredibly valuable in any form, which makes it a very high-risk commodity.” All of this needs to be taken into account. Transporters frequently travel in convoy to provide security in numbers but there have been instances where trucks have been separated quite frequently by men dressed in SAPS uniforms and they then become vulnerable to hijack or theft, says Reimers. Most insurers require that the insured, their contractors and hauliers make sure that each valuable load is protected with a range of armed guards, escorts and tracking devices. In addition the driver of the truck carrying the load is required to be in contact with the control centre at all times so that if a problem arises it can be resolved as soon as possible. Unfortunately, says Reimers, extra security comes at a premium and some exporters are often tempted to exclude this expense in an effort to cut costs. “But cutting back on insurance cover can leave the company exposed. “Adequate security and insurance cover while transporting goods throughout Africa, and especially in South Africa, is vital.” INSERT & CAPTION Most insurers require that each valuable load is protected with a range of armed guards, escorts and tracking devices. – Hugh Reimers