SA businesses urged to meet alarm requirements to prevent financial shortfalls
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2011
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05
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South African businesses should ensure that their burglar alarm systems are adequately installed and are in working order to prevent shortfalls when an insurance claim is made as a result of a burglary.
This is according to Gavin Ferreira, Risk Manager at CIB Insurance Administrators (CIB), who says that a claim will come under scrutiny if it is apparent that an alarm system was not active, or faulty, when a security breach occurred and a portion of the claim might not be paid out in full. “The shortfall will then unfortunately have to be paid out by the business owner, but this situation can easily be avoided if alarm systems are correctly installed and in good working order. “In addition, by installing a security device such as an alarm system the business owner’s premium will also be lower.”
Ferreira says that local business owners are often uncertain about alarm requirements and should consult with their broker to ensure that they meet the stipulated provisions in their policy schedule. “The broker will take into account all contributing factors and security provisions when losses are assessed in order to ensure that a fair outcome is achieved.
“For example, a company may not need an alarm due to the nature of its business, its location, which may already feature 24-hr security, or its assets. Should the business premises contain assets of a high value, it is then recommended that an alarm system is implemented.”
For these reasons, Ferreira advises business owners to regularly check their insurance schedules and ensure that all terms and conditions are understood so that they know what is required of them.
He says that it is also advisable to have a system installed by a reputable provider who is registered with South African Intruder Detection Services Association (SAIDSA), although it is not always a requirement and may depend on the insurer. “It is important though, to ensure that the alarm system is approved by the South African Bureau of Standards (SABS).”
Ferreira advises that business owners also work with the installation company in order to position motion sensors where intruders are likely to gain entry and exit. “The property owner should ensure that all vulnerable areas are protected by sensors, as often alarm companies will not be familiar with the building’s layout. “As a rule, infrared sensors detect heat and should not be installed near heat vents or areas that are exposed to excessive sunlight, as these may trigger the alarm or create blind spots that might not detect intruders.”
Ferreira says that it is an insurance industry standard that alarm systems should be audible and connected to a 24-hour armed response services. “Silent alarms do not provide enough of a deterrent to ward off potential burglars or warn those in the vicinity of potential dangers.
“In October, the Short-term insurance Ombudsman advised that the policy wording in industry security alarm warranties is too complex and created ambiguities that confused local business owners. Businesses should ask their broker for the applicable alarm policy wording and read it in conjunction with their policy schedule as it forms part of the basis of the contract. “Ultimately, the purpose of adequately installing an alarm and its appropriate use should be viewed as a risk reduction mechanism that minimises potential loses and could possibly lower premiums,” concludes Ferreira.
Source: Epic Communications (Pty) Ltd
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