Insurance policies often contain a standard clause requiring policyholders to comply with the laws of the country where the policy is issued. The intention behind the clause is to ensure that policyholders act in a lawful manner. Failure to comply may lead to policy exclusions or the denial of claims.
With the current energy crisis prevailing in South Africa, policyholders are turning to solar systems and/or inverters to alleviate the pain of loadshedding. Many solar systems and/or inverters are connected to the distribution board (DB) box or electrical panel of a building, allowing for the integration of solar-generated electricity into the building’s electrical system.
Electrical installations are governed in South Africa by regulations published by the Department of Labour. These regulations require every user or lessor of an electrical installation, as the case may be, to have a valid certificate of compliance issued by a qualified electrical contractor. Importantly, the regulations also require that a supplementary certificate of compliance be issued for any addition or alternation made to an electrical installation.
The importance of complying with these regulations, from an insurance perspective, is best explained by way of the hypothetical examples below:
Mr. Khumalo, fed up with the continuous spate of loadshedding, recently invested in a state-of-the-art solar system for his luxurious home. Once installed, Mr. Khumalo insured the system against all risks as part of his comprehensive building insurance. The solar system was subsequently rendered useless following a flash of lighting which struck the panels directly. Mr. Khumalo thereafter lodged a claim with his insurer, who requested him to supply them with the supplementary certificate of compliance which, by law, had to be issued following the installation of the solar system. To Mr. Khumalo’s shock and horror, he realized that his contractor had failed to issue him with the certificate. Mr. Khumalo’s insurer thereafter denied his claim due to non-compliance.
Ms. Swanepoel, unable to watch her favourite soapies in the evenings after returning from work due to the high-stages of loadshedding currently being implemented, recently installed an inverter in her townhouse. A fire subsequently broke out in her home, destroying some of her household contents. Upon inspection of the property, the assessor appointed by Ms. Swanepoel’s insurer noticed that she had installed an inverter. Ms. Swanepoel was subsequently called on by her insurer to produce the supplementary certificate of compliance issued following the installation, which she was unable to do, resulting in her insurer rejecting her claim.
In conclusion, the hypothetical examples discussed above highlight the importance of complying with the law when installing a solar system or inverter. Failure to do so may result in your insurer rejecting your insurance claim, leaving you exposed to significant financial losses. Therefore, it is essential to ensure that you meet all the applicable safety and performance standards that may be required from your insurer and possess a valid certificate of compliance to ensure that your insurance coverage remains valid and effective.