WITH TIME COMES EXPERIENCE
Having worked closely in security and asset protection services with some of the best residential and industrial property estates for the past 25 years, we are often witness to a range of criminal activities. There have been numerous times, dare we say, that the methods used by criminals are simply ingenious. Protecting property assets have become an expensive endeavour, and so has the risks involved for insurers.
Tough economic living conditions fuelled by high levels of unemployment make for an all too familiar situation where members of our society turn to a life of crime. Add to this dire situation, the inconsistency of the national electrical power supply grid, the ongoing woes at ESKOM, severe job losses, increasing criminal activities during loadshedding cycles, and, you have all the makings of a catastrophe on hand.
Further to the above, planetary changes and global warming has become the main cause of unpredictable weather systems leading to flash floods, cyclones and gale-force winds. These conditions wreak havoc in poorly maintained stormwater and drainage systems. As a result, it’s quite understandable that insurance companies charge higher premiums, and, under certain conditions, limit the insurance risks they are willing to carry, as has already been the official position taken by some of the top insurers in the country over the past two years.
THE SHIFTING BURDEN OF PROOF, AND THE DAWN OF A NEW ERA
This of course spells no good news for consumers, households and high-end property estates owners where hefty fees are being paid to enjoy the benefits of estate living. Already we are witnessing greater pushback of claims in certain areas and for certain types of incidents, and insurers are demanding greater oversight and proof of functioning security systems, alarms, perimeter fencing, back-up battery support and more, as was highlighted in this article.
What this means, in simple terms, is that property estates, developers, investors, and owners have to ensure they stay on top of their security management system. It is essential to take all the necessary steps to ensure claims are not disputed or rejected due to a lack of sufficient access and security control, system maintenance, recordkeeping or other preventable vulnerabilities.
WHAT CAN YOU DO?
For ease of reading, we have reduced our list of suggestions down to a critical list of 5 to-dos to ensure you don’t find yourself staring down the barrel of a rejected insurance claim over a simple issue which could have been prevented.
1. Inspect, maintain, repair, repeat!
Most problems can be prevented by simply assessing functionality of all your security systems on a regular basis, preferably on a fixed schedule against signatures of the relevant personal who concluded the inspections.
These inspections can include checking, among other things, the following:
- The electrical perimeter fence (wires, bobbins, warning boards, etc).
- Fence and common property alarms (property zones, perimeter breaches, unauthorised door and window openings etc).
- Security equipment (emergency radios, panic buttons, energisers, modems, network points, kiosks, cables etc).
- Patrol systems (including patrol batons, control points, patrol points and patrol routes etc).
- Access control for gates, doors and common property areas (pools, social areas, club house, amenities etc).
- External areas (trees, plants, potential penetration zones, adjacent vacant land etc).
Maintain a separate file and keep accurate records of all of these inspection as documentary proof of the checked systems. If at all possible, perform an independent security system check by a certified and registered 3rd party entity once a quarter. This adds tremendous credibility to your process and records.
2. Just get it right from the start
Property developments are built with a long-term goal in mind, but in their pursuit to reduce costs, developers sometimes install inferior perimeter and security management systems. Over the long term, this approach ends up costing a lot more instead of getting the security system right from the start.
Security management systems need to be functional and compliant, and meet the latest safety and regulatory standards. Insurance companies are more likely to scrutinize these systems for compliance at the time of an incident, especially where inferior systems have been used. In the unfortunate event of a breach or incident, non-compliance, faulty installations, or inferior systems, can increase the risk of claims being disputed or denied altogether.
A quality security management system provides peace of mind and can improve the different layers of security such as armed response, on-site guard management, camera surveillance, off-site monitoring and integration, rapid deployment, and, patrols. This can lower your monthly insurance premiums, and may even lead to fewer on-site requirements like alarms or burglar bars. More effective security services and systems means a lower risk to insurers and translate into savings for the estate and its residents.
3. If you can’t prove it, you can’t claim it
The successful processing of insurance claims really comes down to whether the insured event occurred under conditions agreed to in the insurance policy details. Understandably every case is different. The insurer’s main objective is to confirm the status of the damages claimed for and how the circumstances came about that led to the claim.
If a particular claim is submitted, the insurer is well within their right to request supporting evidence and information that can collaborate the claim. This is where property owners need to prioritize the installation of security systems that have reliable record-keeping capabilities.
Nothing speaks louder during a disputed insurance claim than automated and digitally recorded data and performance reports, that confirms system functionality such as energiser power outputs, network stability, perimeter fence voltage readings, alarm notifications, network connectivity and so forth.
4. The best paper trail wins
If you make changes to your security management system or upgrade its capabilities, it’s crucial to notify your insurer. A failure to update your insurer on these modifications could result in an unsuccessful claim if the system is found to have been altered or not in place at the time of the incident.
When we refer to a paper trail it’s important to note that we are not just referring to the effective record keeping of internal performance and functional data as per point 3 above. Paper trails also include internal and external communication that facilitates back and forth correspondence between residents, insurers and other service providers.
While each case is evaluated on its own merits, well organized and effective administrative management also leads to improved insurance claim processing.
5. Backup, fallback, failover
Security management systems such as the perimeter fence, energisers, alarms and communication systems need to be fitted with proper surge protection. Without it, a power surge could damage the entire system, rendering it ineffective at the time of an incident. Insurers are increasingly focused on surge protection especially in areas where lightning storms are common such as the highveld areas in Gauteng.
Alarms remain one of the first lines of defence in any security system. As part of an effective risk management strategy, these should be armed at all times and equipped with backup power to ensure functionality during outages. Both scheduled and unscheduled power cuts can undermine the effectiveness of an alarm system, leading to potential claim issues.
A good security management system also has to consider providing back-up in the back-end, especially where cloud solutions are a core element in the particular system. Check if your security management system has secure failover protocol in place, or else your operating and system data might be at risk during a network error or breakdown.
A FINAL WORD OF WISDOM
Insurance companies are still essential partners in the business landscape, and some of the most helpful people I know work there. I have personally been with the same short term insurance broker since 2003. A close second place behind my doctor!
The purpose of this article is by no means to badmouth the sector, insurers or their decisions, but we are trying to sensitise our readers and clients, that just because you submit a claim, doesn’t necessarily mean it will be paid out. Property Estates and homeowners also have to play their part and making sure all systems work as they should.
As the insurance landscape shifts, it’s crucial for property owners, estate managers, and homeowners’ associations to stay ahead of these changes by ensuring their security systems are fully compliant, functional, and well-documented. Regular checks, good communication with insurers, and proactive management are key to reducing the risk of claims being denied.
On a lighter note, I once asked a litigation lawyer, who, in his opinion, usually wins a court case.
He answered: “Whoever has the best paper trail!”.
Make sure that is always you!