Strike action forces a fresh approach to insurance

As strikes and intimidation become the favoured ‘quick-fix’ for workers dissatisfied with their wage levels, freight operators as well as farmers and exporters would do well to take a fresh look at insurance solutions to cover these risks, says Bimesh Ugarchund, director Eikos Risk Applications. “But in seeking the appropriate solutions and covers, it’s also become crucial to understand one’s cover and what is available,” says Ugarchund. “Everyone checks their policy for the applicable ‘strikes clauses’ that provide cover against physical losses and damage caused by strikers. “But clients don’t take the time to educate themselves about the limitations of these clauses,” says Ugarchund, “especially as they relate to refrigerated goods.” These clauses typically provide cover against material damage as a direct result of strikers’ actions, he explains. “But let’s say the strike happens at port and the port authorities lock up the port. Your products may deteriorate simply because they suffer temperature variations (containers were not plugged in) or because they cannot be shipped and are delayed for an inordinate amount of time. The strikes clauses won’t cover you against this, which is why exporters and farmers must be aware of what they can and can’t recover from their policy.” Ugarchund urges exporters and freight operators to also invest in Sasria cover (South African Special Risks Insurance Association). “Again, be aware of the limitations of this cover. It only responds to material damages arising from labour action like strikes, lock-outs and politically motivated riots, civil unrest and terrorism within South Africa. The onus is on the policy-holder to prove the claim to the insurer – and this can become quite technical,” he added. Exporters and freight operators are encouraged to purchase Sasria cover for both the shipping of products as well as the business assets, he said. Farm workers and truck drivers are both links in the supply chain, and the tiniest break in this chain creates a domino effect that’s felt throughout the chain. It’s important to think proactively about strike action through the chain and develop business continuity and contingency plans for this eventuality, he says. “Without sound risk management and the proper insurance solutions, exporters, freight operators and other service providers in the chain will suffer the consequences.” CAPTION Bimesh Ugarchund … ‘Crucial to understand one’s cover and what is available.’