As if there have not been enough fires in the country for 2022, there is an expected rise in wildfires as the winter season is in full swing. With strong and harsh winds that naturally come in the month of July, wildfires are to be expected and businesses and individuals alike will need to be extremely vigilant. It is widely known that weather and season change have a direct effect on the insurance industry. Accordingly, winter wildfires are no exception. In this regard, vigilance means putting necessary measures in place to guide against the effects of wildfires – having valid relevant insurance policies in place; ensuring that applicable insurance conditions are met; implementation of necessary measures to mitigate the losses; etc. Some businesses and individuals are at more risk than others and, therefore, it is imperative that each business and individual assesses their risk, and endeavors to implement necessary corresponding measures. The persistence of loadshedding also poses a serious threat insofar as fires are concerned. The Ministry of Forestry, Fisheries and the Environment has also published their reinforced necessary measures to enhance its state of readiness to deal with such fires. The issue of winter wildfires is not a South African problem but a worldwide issue that many countries grapple with during this season of the year. Our courts, similar to many other jurisdictions, are not unaccustomed to litigation relating to fire insurance disputes. Due to the devastation that can emanate from such fires, it is critical that both businesses and individuals are alert as to the basic legalities relating to fire insurance disputes.
Fire insurance is one of the oldest forms of insurance cover provided by many short-term insurance companies. As such, and as explicated above, our courts have entertained several fire insurance court cases in the past – for example, Martin Johnson Properties CC v Mutual & Federal Insurance Company Ltd; Renasa Insurance Co Ltd v Christopher Brian Watson & Flashcor 201. Although there is usually no definition of “fire” on policies, it is an accepted principle that there has to be an ignition of fire (for one to successfully claim for losses flowing from fire). This is from an old English court case of Austin v Drewe (1816). Having fire insurance cover in place is obviously a starting point to be able to claim in case of damage caused by fire. Then, once valid cover is in place, it is critical to satisfy all the conditions as per the policy wording. In business/property fire insurance policies, it is common to have conditions such as installation of fire extinguishers; a fire alarm system; fire insulation materials; etc. These differ from policy to policy – the higher the risk, the more intense and extensive the measures to be put in place. All these measures are ordinarily referred to as mitigating measures. They are intended to curtail the chances of fire erupting or lessen the extent of loss/damage caused by fire. In case of fire materialising, it is essential that the insured keeps necessary records – from the reporting of the fire incident; submission of the claim; exchange of correspondence; right up to finalisation of the claim / rejection of the claim. These documents and records go a long way if and when litigation becomes necessary. In case of a repudiation, the insured must immediately seek legal advice having regard to the time-barring clauses which are prominent in short term insurance policies. Depending on the nature of repudiation and the basis of same, it may be necessary to appeal internally with the insurer, thereafter, refer the matter to short-term insurance Ombudsman’s office. If all fails, the insured will need to resort to the institution of legal proceedings. Although insurance internal appeals and referrals to the Ombudsman’s office can be done without the assistance of a legal representative, it is highly advisable to involve one given the fact that such submissions are of legal nature and, insurance companies use their legal minds to assist with such disputes.
In light of the foregoing, businesses/properties and individuals must ensure that they have valid insurance policies in place. It may also be sagacious to contact one’s broker and have reviews (where applicable) done, so that every record and detail is up to date. Winter wildfires can cause serious devastation to business and private properties, not only with respect to stock and property, but financial losses too. In some cases, fire eruptions can lead to losses of life and livestock. With most businesses still recovering from the effects of Covid-19; looting; recent floods; etc. they cannot afford to suffer more devastation. Thus, it is imperative that valid insurance policies are in place.