This is according to Simon Colman, underwriting executive at SHA Specialist Underwriters. "Businesses may have to accept that due to the re-occurrence and subsequently, the foreseeability of these outages, it may be found that there may have been reasonable precautions that should have been taken to protect their own customers from losses and injuries," he says.
Colman warns that businesses that have a frequency of visitors or customers on their premises are most likely to find themselves in hot water if a third party is injured during load-shedding. "Shopping malls, retailers, restaurants, banks and sports stadiums for instance cannot afford to ignore the possible liability and reputational harm that may result from an injury on their premises. Businesses that are operating in high hazard environments where a loss of power is almost certain to result in injury, must also be sure to take extra precautions."
He adds that that every time an allegation is made against a business - alleging its liability - the company will be obliged to defend itself regardless of the verdict, a process that could prove to be quite costly. "We already deal with loads of slip and trip claims every day and load-shedding has the potential to exacerbate the situation. Other big concern areas are generally related to elevator failure and stampedes where crowds could be trapped in a confined space."
Colman says that broad-form liability policies are generally best for dealing with liability claims from third parties as these policies are primarily legal defense covers." If the case is unsuccessfully defended, the damages or settlements are covered too, thus insuring that the company is protected from the cost of defending itself against frivolous claims and in the case of proven liability."
Even in the event of an unscheduled power cuts, businesses must ensure that the necessary precautions are in place to protect their customers. "It is not impossible that a court may be sympathetic to an injured party if load-shedding is a daily possibility. It could be argued that businesses need to guard against even unscheduled power cuts," concludes Colman.
