Blackout losses will not be covered – Sasria

South Africa Special Risk Insurance Association (SASRIA) told clients it won’t pay claims for damage related to a collapse of the national electricity grid, Business Day reported, citing a circular from the company.

The announcement by the state-owned insurer comes less than a month before the start of winter.

The country’s state-owned power utility Eskom has yet to release its official system outlook for the winter months when energy demand is expected to increase.

“Your Sasria policy will not indemnify you for any loss, damage, cost or expense, directly or indirectly caused by, arising out of, in any way or to any extent contributed to by, or in connection with electricity grid failure,” the company said in the circular cited by Business Day.

Africa’s most industrialized economy has been dogged by rotating blackouts since 2008.

Eskom is currently implementing so-called stage six power cuts where it removes as much as 6,000 megawatts of capacity from the nation’s grid.

In March, Outsurance added grid collapse exclusions to their policies, removing cover for any loss, damage or liability caused by an Eskom blackout.

It has joined the likes of Hollard, Momentum Insure, Naked Insurance, and Santam, which also excluded covering a grid collapse.

Outsurance attributed the change to a need to review its cover in light of the higher risk of a blackout happening.

“The increased levels of load shedding over the last year, with the possibility of an electricity grid failure, has required a review of our cover,” it said in a notice sent to its customers.

Like Outsurace, Hollard spokesperson Warwick Bloom said that while the potential for a total grid failure remains remote, it is now a “possibility”.