Insurance Law: No More Cover For Electricty Grid Failure?

South Africa is suffering from the worst loadshedding ever implemented. This is causing significant headaches for the insurance industry, particularly the short-term insurance companies. The energy crisis comes on the back of the major calamities of recent years, such as Covid-19, the July 2021 unrest, and the Durban floods of April 2022. As a result, there have been reports of global pressure from reinsurers that South Africa is becoming riskier to insure. This seems to have now triggered some short-term insurers to reconsider their position insofar as cover for electricity grid failure is concerned. Some short-term insurers have now made it clear that they will not provide cover for damages flowing from a grid failure. This approach is most likely to be adopted by most short-term insurers, given the fact that there is no end in sight with regard to the energy crisis – the powers that be do not seem to have a concrete solution to remedy and stabilise the situation.