Page 60 - Policy Wording - Hollard Business Binder (2020-08-26)

Theft
1. GENERAL
THEFT
Cover must always be subject to the forcible and/or violent entry/exit condition.
2. UNDERSTAND THE RISK
2.1 The sum insured is always on a First Loss basis, therefore it is important to understand what amount of goods can be stolen at any one time considering the protection measures in place.
2.2 Obtain details of protections and security arrangements in place.
2.3 Theft in the open may require additional measures to ensure safekeeping.
3. UNDERWRITE THE RISK
3.1 Survey
3.1.1 The best way to evaluate the premises is by means of a comprehensive survey.
3.1.2 Theft results are predominantly affected by the crime incidence prevailing in specific areas at any given time.
3.1.3 It is commonplace for weaknesses in protections to be actively sought out and exploited and there appears to be no limit to the extent to which force is employed to overcome even the most robust protections. Criminals are becoming more aggressive with many of them carrying weapons of some description and they are developing more enterprising methods.
3.1.4 Losses are not confined to goods that are obviously attractive from the point of view of theft. There is evidence that thieves have little difficulty in disposing of highly specialized articles.
3.1.5 Inflation contributes significantly to deteriorating results. As the value of stock increases so does its attraction to thieves, particularly when costly portable items are involved. The average cost per claim continually increases.
3.1.6 When to survey a risk:
3.1.6.1 The sum insured may not be the best criteria for deciding whether or not a surveyor should visit the risk as, irrespective of the sum insured, repeated small losses would erode premium.
3.1.6.2 Surveys may be warranted due to loss history, construction, age of building, protections, area or any other valid reason. Survey information should always be on file.
3.2 The premises
3.2.1 Apply the same principle to each and every location or building if there are multiple buildings or locations.
3.2.2 Each building/premises must be noted and rated separately as protection measures may vary.
3.3 Protections
3.3.1 The standard of physical protections required will vary according to the area, the construction of the premises, the types and value of the property being insured and the sum insured.
3.3.2 The survey must highlight any abnormality or increased risk factor.
3.3.3 Alarm warranty on farms is not effective, so rather insist on improved burglar bars and similar protective measures.
3.4 Alarm
3.4.1 The burglar alarm warranty automatically applies as per the wording.
3.4.2 In the event that the warranty needs to be waived, please obtain full details of security measures in place and take the area and type of contents into consideration. This is not recommended where the total theft exposure (i.e. combined theft limits under Office Contents, Theft, Money and Electronic Equipment) exceed R50 000.
3.4.3 The alarm warranty is generally waived if a business is open 24 hours a day e.g. a hospital.
Commercial Underwriting Mandates and Guidelines – Binder – Version 2 2020 59