In an exciting collaboration between Minet Malawi, Britam, and The Daily Times - Malawi's leading newspaper - we are thrilled to introduce a groundbreaking initiative that will redefine your Wednesdays. Welcome to the Insurance Insights Column – a weekly rendezvous with the world of insurance and contemporary issues that matter. Every article aims to illuminate the intricate landscape of insurance products and relevant topics that impact us all. The articles are educative at all levels, catering to both practitioners and non-practitioners.
As published in The Daily Times (Malawi) on December 18th, 2024
The festive season is here. This is the time of the year, when the Christian community worldwide commemorates and proclaims the birth of Jesus Christ on 25 December. This is also the time when Christians reflect on the life and teachings of their Lord. Traditionally, the period runs from 8 December, when staunch believers mount Christmas trees in their homes and workplaces and ends on January 6 enveloping New Year’s day on January 1. The season is synonymous with religious festivities, large-scale shopping sprees and get-together parties.
Yes, get-together parties are always the order of the day, especially on Christmas and New Year’s days, respectively. You cannot talk about partying without the mention of food, nyama choma and cold drinks. This is the time when families, friends and organizations share gifts, wine and break bread together.
Experience has shown that during the period the demand for meat, fish, vegetables, beverages, dairy products and canned foodstuff tends to go up. At the same time, supermarkets, hotels, butcheries and producers of such merchandise make the best use of cold rooms and refrigerating plants to keep the stocks fresh.
Despite keeping the merchandise in the refrigerating plants, risks do trigger putting the foodstuff under threat of deterioration. For this reason, insurers devised an insurance package against deterioration of stocks (dos) whilst under refrigeration condition.
Deterioration of stock risks arises from the need to store foodstuff within controlled temperature. The storage is usually in specially built rooms, using refrigerating compressors to chill or freeze the contents. The stores range from domestic refrigerators to huge purpose-built warehouses.
The operative clause of deterioration of stock insurance covers loss of or damage to goods by deterioration, putrefaction or contamination due to a rise or fall in temperature. The change in temperature may be as a result of fault or damage to the refrigerating machinery, failure of electricity and connecting wiring. Sometimes refrigerant fumes escape from the machinery and contaminate the contents.
Foodstuff and other contents that have deteriorated will be deemed not fit for human consumption and condemned for disposal by organizations such as Malawi Bureau of Standards and Consumers Association of Malawi (Cama) which were instituted to protect consumers from such risks. Insurers extend deterioration of stock cover to include costs of disposal of the condemned goods. Yes, such condemnation should be as a result of the operation of an insured peril.
The refrigerating fumes that escape from the machinery will not only affect the contents, but the cold chambers as well. For this reason, there is need to decontaminate the chambers.
Deterioration of stock cover is written on a full sum insured basis. The sum insured selected is based on the maximum value anticipated at any one time. However, it is common for values to vary considerably particularly at peak times especially during Christmas and New Year’s day.
Only businesses and institutions such as hospitals and colleges can take cover. Deterioration of stock insurance is a commercial cover. Individuals get similar cover under householders insurance, as an extension for damage to foodstuff whilst contained in refrigerators.
Importantly, cover does not apply immediately when a risk sparks off or a loss occurs. The policy is subject to time excess. Time excess, also known as the franchise, is the period within which one is not supposed to claim on the policy. Once the period lapses, the loss is covered in full and payment is made from ground up. The length of the time excess depends on the nature of the foodstuff under cover. For instance, cover for meat is expected to have a longer time excess than that for dairy products.
Loss in respect of failure of electricity due to deliberate act of the electricity authority or load shedding by Escom is excluded.
Why expose your business to risks, when a solution can be procured with a few bucks from us? Talk to us. We are here to guide and serve you. Merry Christmas and Happy New Year to all our customers.
Comments
Post a Comment