Insurers tell clients: We can’t cover you for Eskom grid collapse

Insurance companies have for the past week been informing their clients that they cannot protect them against a collapse of the national electricity grid and that should that occur, policyholders cannot claim for damages.

South Africa has endured unprecedented levels of load-shedding as utility Eskom’s limping power stations struggle to generate enough energy to meet demand. In a recent media briefing former chief executive André de Ruyter said Eskom was in the process of reviewing its documentation and schedules that govern stages of load-shedding and “forming contingencies for if the country hits stage eight”.

This has led to speculation of a possible grid failure, a systemic risk against which insurance companies cannot protect their clients, according to Soul Abraham, chief executive for retail at Old Mutual Insure.

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