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This is the second article in our Risk Management series.

Winter is on its way, which, hopefully, means rain in the Western Cape. Broadly speaking, heavy rain results in a vast amount of damage to buildings in South Africa every year. Some of this damage can easily be avoided by practising basic risk prevention i.e. weather proofing the building BEFORE the rain comes, for example:


• Look for any signs of water damage e.g. dark spots, damp, rot, mould, mildew, water marks on the ceiling etc. All these are signs that all is not well with your waterproofing, roof, gutters, drains etc. Call an expert to establish the cause and then repair the damage.


• Inspect roof sheeting and tiles – loose sheeting and broken tiles are dangerous and may allow water to ingress into the ceiling. Also, remove moss and leaves from the roof.

• Bulging and peeling exterior paint are signs that you may have waterproofing issues. Also inspect the integrity of the flashing around chimneys, fireplaces etc.


• Tree roots (a big culprit), foreign objects or any other debris can clog, block or damage your drains, which will lead to overflows, backups etc. and potentially, extensive damage to the building, including mould or mildew growth.


• Clean leaves and debris from your gutters, grates and down pipes – blocked gutters are a clear risk to the building, as they can cause build-ups of water. These build-ups of water can cause overflowing or deterioration over a period of time and ultimately, can cause cracks, mould or even major structural damage.

• Gutter Guards can be installed to prevent gutters and down pipes becoming blocked from leaves etc. Gutter Guards can also prevent hail from blocking gutters and prevent birds from nesting. Nesting birds can lead to roof and water proofing issues if not attended to.

• Run a hose pipe or high pressure hose down your gutters to ensure clogged debris is removed. Clogged gutters will cause water to come through your ceiling in the event of heavy downpours.


We recommend that you arrange an annual roof inspection by a professional, ideally before the onset of the first winter rains – there are a few roofing companies that do these assessments for free. Such inspections may reveal latent risk and damage, which in turn may save you the huge inconvenience of submitting an insurance claim. At the same time you will be actively protecting your insurance risk profile.


It is also important to consider the policy condition of Reasonable Care (which is found in all insurance policies), as this deals with consequences of not taking due care (e.g. preventative and regular maintenance etc.) to avoid loss. This condition essentially states that you must take all Reasonable Care to avoid loss as insured by your policy. Essentially, your insurers require you to act as though you don’t have insurance cover and to do everything possible, which an uninsured person would do, to avoid loss.

Building insurance essentially only provides cover for certain sudden and unforeseen events that are outside of your control. If your roof hasn’t been reasonably maintained and this has contributed to the damage you want to claim for, you might not be covered based on a lack of Reasonable Care. The condition of Reasonable Care is fair to all policyholders, since it ensures that insurers don’t pay claims that could have been avoided, had the policyholder taken steps to avoid loss i.e. acted, at all times, as though they were not insured.

As always, AIB Cape remains at your service.

May 28, 2019

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This is the first in a series of articles on the important role Risk Management plays in insurance.

Let’s take a trip down the insurance memory lane. In the beginning, insurance was invented to spread the financial risks of an event which could cause severe loss or damage. Ships sinking and the Great Fire of London are some of the earliest recorded examples of the need for humans to spread catastrophic losses into risk pooling arrangements. Insurance has evolved to cater for a variety of risks, some of them very complex and some very minor risks. At source, insurance was not designed to cover small attritional losses, but rather the less frequent major, catastrophic losses (e.g. Fires, Floods, Earthquakes – sometimes called acts of God)

The premium insurers charge and the terms they impose for the risk they accept is essentially based on the risk profile of the client – modern insurers have access to vast amounts of data to assist them in determining a client’s risk profile, the primary ones being the frequency of claims and financial impact of these claims. So, in essence, if a policyholder claims more than the average person, the insurer will be forced to increase the premium in order to be profitable. Conversely, if a policyholder claims less than the average person, premiums are likely to only increase in line with the cost of living.

It is clear that you should protect and enhance your risk profile, in order to remain an attractive risk to insurers and of course ultimately, to keep your insurance premiums down and your terms favourable.

The obvious question arises, how does one practically claim less, in order to protect their risk profile. The answer is, by managing the risks you have identified and chosen to insure, mainly using the risk prevention approach. The old adage that prevention is better than cure, is so true in terms of managing your insurance risk. Focus on what steps you can proactively take to avoid claiming. Macro examples include, preventative maintenance, changing vehicle driving behaviour, improving home and vehicle security (beyond what your insurer requires) and, in the event of a loss, making a conscious decision to protect your risk profile, by only claiming for things you can’t afford to replace.

Put another way, see this approach as a proactive form of self-insurance. Self-insurance is a practice that is used by all Insurers, by way of compulsory excesses, which are imposed as a standard in the policy contract. This forced form of self-insurance helps by reducing the insurer’s administration by alleviating small claims and ultimately, enables them to improve the premiums they charge. We recommend you protect your risk profile, by practicing self-insurance as far as possible (beyond the policy excess).

In closing, AIB Cape understands that no client likes claiming. After all, the claim process takes up valuable amounts of your time, it is inconvenient and often stressful for you. Moreover, sometimes your insurer can replace an asset, but they can’t replace the sentimental value that asset may have for you. All the more reason to avoid the claim in the first place, by practising proactive risk management.

As always, AIB Cape remains at your service.

May 28, 2019

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Are you aware of your duties under the National Small Vessel Safety Regulations?

Vessels with the marking SA or ZA sailing in international waters: Please be aware that Insurers have advised that compliance with SAMSA regulations is a prerequisite of cover, as far as the Merchant Shipping Act (Small Vessel Safety) Regulations 2007 applies. We wish to draw your attention to the requirements of Marine notice 36 of 2016 which details the Certificate of Fitness requirements. At each renewal a copy of the Certificate of Fitness or equivalent certification will be required for their records.

The Merchant Shipping (National Small Vessel Safety) Regulations, 2007, place the onus on the owner and in some cases the master as well, to ensure that the vessel and the crew comply with the requirements of the regulations at all times.

SAMSA website:


No Vessels (with engines >15hp and sailing vessels of >9m) are to be operated without a Certificate of Fitness in compliance with, and as described more fully, in the Merchant Shipping Act (Small Vessel Safety) Regulations 2007.

The Certificate of Fitness will state the following information:

• The Name of the Vessel
• The marking / registration number assigned to the vessel
• The name identity number and address of the owner of the vessel
• The type and category of the vessel
• The overall length of the vessel
• The maximum number of persons permitted to be carried on the vessel

Please contact us should you have any queries.

Kind Regards

May 28, 2019

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We live in a world dominated by machines – machines, including those in the “cloud”, which can compute and store vast amounts of data. Our dependence on these machines for data and tasks has reached staggering levels, to the point that it is safe to say that a security breach in terms of data being compromised or computers being hacked, are potentially business threatening risks. Aside from this, acts like the Protection of Personal Information (POPI) and General Data Protection Regulation (GDPR) place onerous legal obligations on businesses, should third party data be compromised in a breach.

All businesses are exposed. It can be argued that small business are even more vulnerable than large ones, since they often do not have access to sophisticated and costly IT resources to manage and mitigate their risk. Every business is likely to suffer a data breach at some point, even those who have taken extreme measures to avoid breaches – so, what is the solution? Is there an insurance mechanism to transfer these risks?

The answer is yes, there is. Enter Cyber Insurance.

Cyber Insurance
There are quite few cyber insurance offerings in the South African insurance market currently, but as with most things, not all polices are equal. A cyber policy worth its weight, looks to cover your (The Insured) First Party and Third Party risk, essentially arising from a loss of data or a breach of network security.

First Party, generally includes:

• Data restoration costs;
• Brand management;
• Notification costs to all affected data subjects;
• Data extortion or Ransomware (an email virus that encrypts your entire system or network);
• Business Interruption resulting from a network breach.

Third Party, generally includes defence costs (and damages if awarded) emanating from legal liability to others (customers, clients etc.) data in your care, should:

• Third Party data be compromised following a breach;
• You be negligent in preventing a computer security breach;
• You not complying with laws (POPI etc.) relating to data privacy.
Cyber insurance also usually provides access to suitably qualified professionals in your time of need, usually within hours of the notification of a breach. These are resources that few businesses have in-house, due to the cost factor.
Of course, prevention is always better than cure.

Some Risk Management tips on preventing an incident, may include:

1. Establishing what data you have (your own and Third Party data)
2. Identifying the critical data that needs protection (caveat, all third party data is critical)
3. Establishing who has access to the data and putting strict security controls in place to protect access. This would include Fire Walls, installing Anti-Virus software, ensuring users update their computers regularly, introducing stronger password controls and frequent change of passwords, blocking staff access to certain websites, email links etc.
4. Backing up all your data, using a robust and secure storage platform. Ideally, backup your data on two different platforms, at least one offsite.
5. Appointing professional IT specialists to advise and design points 1-4 and then vigorously test your security measures on a frequent basis
6. Testing your IT professionals solutions on a frequent basis
If you currently do not have Cyber Insurance cover in place, AIB Cape strongly recommends that you insure this risk.

Please contact us should you require a quote or if you have any questions.

Kind regards

May 28, 2019

Posted In: Newsletters

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