The recent f looding in Durban has highlighted the importance of insurance. This, after a recent survey of business owners found that nearly 55% of respondents had no cover for f lood damage.Tshegang Chipeya, programme manager for The Durban EDGE, eThekwini Municipality’s economic research and advisory platform, said this was concerning. “The lack of insurance is a key issue that we have come across. We wanted to ascertain what was going on particularly in the south Durban basin. At present, we are sitting at about 55% of respondents not being insured against f lood damage. “This is of extreme concern as it impacts severely on the ability of many of these businesses to recover from the f lood and to re-open, which in turn impacts Durban as a business destination.”According to Mike Brews of Horizon Underwriting Managers, this has not been seen on the cargo side, where most of the losses are well covered. “We are in the process of putting figures together. There is no doubt that the losses have been substantial,” he told Freight News.Brews highlighted the importance of insurance, considering the incidences that had unfolded in Durban over the past year, from the 2021 civil unrest to the current f loods.“Insurance is a grudge purchase and, more often than not, when companies have cash f low or money problems, it is the first item on the budget to get cut. Many companies have cut back on insurance because it is an expense that they believe they can do without in tight economic times. This is a dangerous move as it can result in a business either not being insured or then being underinsured.”He said the massive losses suffered in Durban highlighted the importance of employing a good broker. “My advice to any company is not to try to do it themselves and to rather make use of a broker. “Brokers can advise in detail what a company’s requirements are and can make sure you are adequately covered. Make no mistake, businesses suffer losses all the time, not only because of f looding like we have seen in Durban most recently. If your business has not suffered any substantial loss at any given time, it has nothing to do with being good at business but more to do with luck.”According to Chipeya, the city is currently looking into why so many businesses did not have insurance for f lood damage, considering that many are operating in the city f lood plain. She said the city wanted in particular to ascertain if f loods were excluded from policies for these businesses or if it was just a case of not being insured.According to Brews, natural disasters will be an increasing occurrence, given climate change. Hence, businesses need to ensure that they have the correct coverage to deal with these environmental incidents, be it f looding, tornadoes or even drought, as was seen in the Western Cape a few years ago.
