The effects of climate change have been debated since the 70s, but evidence has become increasingly apparent over the last two decades, says Regan Duarte, Claims Specialist at SHA Risk Specialists.
South Africa is not exempt from this phenomenon, and the country continues to experience significant changes in its weather patterns. In 2022, days of heavy rainfall in KwaZulu-Natal (KZN) led to the deadliest storm in the country since the 1987 floods, accounting for more than R17bn in damages to critical infrastructure.
South African businesses must consider whether they are sufficiently protected against the far-reaching consequences of climate change. Professionals and building owners need to plan for a worst-case scenario and not the predicted rain patterns from 30 years ago. The flood modelling should be updated for what transpired in KZN.
Poor maintenance and outdated planning
The heavy rainfall and catastrophic flooding in the last few years that led to the collapse of infrastructure – most noticeably in KZN and the Eastern Cape – highlights the vulnerability of these structures. Poor maintenance like clogged stormwater systems also played a key role in the failure to abate excessive flooding. Other provinces, such as the Western Cape and Gauteng, suffered similar albeit less severe flood damage, with the Western Cape racking up over R1.8bn just in damages to roads.
Operational and supply chain disruption, damaged infrastructure, and loss of income are some of the significant challenges businesses face due to intensified weather events. It’s imperative that the private sector adapts to these changes.
SHA claims statistics from 2022 indicate most flood-related claims were from the KZN region (65%), followed by 35% from Gauteng and the balance between the Eastern Cape and Western Cape – revealing that certain regions are more susceptible to flooding and therefore require suitable urban planning and infrastructure to mitigate flood risks.
Incorporating the prospect of unusually heavy rainfall and flooding that a region may experience into the planning and risk management – which includes taking out the proper insurance cover – is crucial for industries to mitigate the impact of such events.
Claims reveal vulnerabilities in cover
Looking at the construction industry in particular, the reasons for claims vary from defective designs, ineffective planning and preparation, to commercial property claims against the landlord or managing agent for lack of maintenance. Insurers cannot be held liable for wilful negligence, which is why most policies require that certain measures are in place to mitigate these risks.
SHA’s data reveals several claims against the professional teams appointed on construction projects wherein there are allegations of insufficient application of waterproofing to the roof and inadequate drainage systems, which lead to damage to property of the tenants and other parties.
The worst situation for any business already dealing with its own losses, is to face litigation for third-party damages or injuries.
Acclimatising to a new risk environment
Given recent extreme weather events both locally and globally, it’s hard to deny the need for business and property owners to take precautionary measures that will safeguard their buildings or construction plans against severe weather.
Brokers can provide expert advice specifically suited to business needs, identify any coverage gaps and recommend the appropriate insurance policies within the context of the current risk climate.
