Navigating the Tide of Elections: A Guide for South African Businesses to Secure Insurance

In the vibrant and dynamic landscape of South Africa, elections are a significant event, embodying the democratic spirit of the nation. However, alongside the peaceful exercise of democratic rights, history has sometimes shown that the electoral period can also bring about social unrest. With the next elections scheduled for May 29, it’s an opportune moment for South African businesses to reassess their preparedness, particularly from an insurance perspective.

The South African Context: A Statistical Glimpse

South Africa’s unique socio-economic fabric has, in past election cycles, been susceptible to periods of heightened tension and unrest. According to statistics from the South African Police Service, election years have seen a noticeable increase in public disturbances. For instance, in the 2019 election year, there was a 15% rise in incidents of public unrest compared to the previous year. These trends underscore the need for businesses to take proactive measures to mitigate potential risks.

Moreover, the South African Special Risk Insurance Association (SASRIA) – a state-owned entity providing coverage for unique risks, including political unrest and riots – reported a significant spike in claims following past election-related unrest. This illustrates the tangible impact of electoral volatility on the business landscape.

Tailoring Insurance to Mitigate Electoral Risks

Understanding and obtaining insurance coverage before the elections is crucial for South African businesses. Coverage options to consider include:

  • Property Damage Insurance: Ensuring comprehensive coverage for any physical damage to business property or stock.
  • Business Interruption Insurance: Protecting against losses due to forced closure or operational disruption during unrest.
  • Liability Insurance: Offering protection if someone is injured on your premises during a disturbance.

Engaging with an insurer who understands the South African market and potentially SASRIA coverage for particular risks is essential in developing an effective insurance strategy.

The case of the 2019 elections serves as a pertinent example. Businesses that had the foresight to expand their insurance coverage to include unique risks reported significantly lower financial impacts from election-related disruptions. This highlights the importance of being insured and ensuring that the insurance coverage is comprehensive and apt for the specific challenges posed by the electoral period.

As May 29 approaches, businesses across South Africa are advised to:

  • Review and Update Insurance Policies: Consult with insurance experts to ensure adequate coverage and protection against social unrest.
  • Implement Risk Mitigation Plans: Beyond insurance, having a robust plan to protect assets and ensure the safety of employees during periods of unrest is vital.
  • Stay Informed and Prepared: Keeping abreast of developments as the elections approach can help businesses anticipate and prepare for possible unrest scenarios.

The upcoming elections remind us of our society’s dynamic and sometimes unpredictable nature. For businesses in South Africa, they also represent a critical period to reassess and fortify their risk management strategies. Insurance is vital in this process, offering a safety net against the unforeseen. By taking proactive steps now, businesses can confidently navigate the election period, knowing they are prepared for the challenges that may lie ahead.

About RBS

Risk Benefit Solutions, better known as RBS, originated as an entrepreneurial-focused services business in 1998 and today is one of the largest fully-fledged black-owned insurance brokers in South Africa and a Level One B-BBEE contributor. Celebrating 25 years in business this year, our growth has contributed to offering clients a unique approach to risk management by positioning our skilled resources as an extension of our client’s risk management team. Our company covers various services, including Insurance Broking, Risk Management, Commercial and Corporate Risk Advisors, and Corporate Vehicle Hire Services. With its head office in Cape Town, RBS has offices in Gauteng, the Eastern Cape and globally, represented through its board membership with WING (Worldwide Insurance Network Group).