Complex Claims-BI Extensions & renewable energy
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Public utilities / infrastructure failure
Essential services such as water and electricity are critical to any business. When supply fails, businesses can suffer real financial setbacks. In several of our BI reviews, only the actual utility outage period was allowed in the BI calculation, and proof of the outage and physical damage to the supplier's property became key requirements.
Claims preparation costs (CPC)
Preparing a BI claim can be highly specialised and resource intensive. Although most policy wordings provide automatic CPC cover, this is not always the case, or the limit may not be adequate. A useful reminder to ensure the right cover is in selected.
Supplier & customer premises
A client may operate flawlessly, but if a key supplier or customer suffers a loss, the ripple effects can be severe. This surfaced clearly in a matter where penalties, ICOW, and AICOW linked to supply chain failures formed part of the BI discussion.
Prevention of access
Sometimes, the business is ready… but the authorities aren’t. We’ve seen cases where BI was triggered because access to the premises was restricted after a fire or hazardous event nearby - even though the insured property itself had no damage
Infectious / contagious disease extensioc
Disease related BI claims require stringent proof, such as establishing infection within the policy’s required radius. This was particularly relevant in COVID 19 related BI assessments.
Fines & penalties
Some retailers aggressively penalise late or missed deliveries. These amounts, when linked to an insured peril, may be claimable.
Why BI extensions matter
Our claims experience shows that BI losses are increasingly triggered by operational interruptions rather than direct physical damage. Understanding how each extension applies ensures fairness, reduces disputes, and improves our ability to support brokers in high‑pressure moments of truth.
Green environment & its hazards – lithium & solar
As more clients adopt renewable and “green” technologies, we’re seeing a shift in risk profiles across both personal and commercial lines. While solar and lithium‑ion systems offer clear environmental and operational benefits, they introduce new and evolving hazards that directly impact underwriting, policy conditions, and claims outcomes. This section highlights the most relevant risks our teams should remain alert to, especially as these systems become standard across homes, estates, farms and businesses.
Lithium‑Ion battery hazards:
Lithium‑ion batteries are central to backup systems and solar installations, but they also bring a high‑severity fire and explosion risk.
Key hazards:
- Thermal runaway: causing sudden overheating, ignition and potential explosion
- Toxic smoke with corrosive vapours affecting structures and contents
- Reignition risk even after initial suppression
- Poor installation/ventilation Often seen in garages, cupboards, or storerooms
- Non-compliant or uncertified systems increasing risk of electrical failure
Why this matters for claims:
Lithium‑related fires typically lead to total‑loss outcomes, rapid structural compromise, and extended business interruption. They require complex cause determination and often reveal installation defects or non‑disclosure of system upgrades.
Solar PV system hazards
Solar PV usage has surged, but with that comes increased electrical and environmental vulnerability, especially during peak storm and heat seasons.
Key hazards:
- DC arc faults from connectors, wiring or panel damage
- Inverter failures that ignite surrounding materials
- Wind uplift and storm damage with panels detaching and causing secondary losses
- Roof-load issues especially on older or lightweight structures
- Improper cabling, earthing or surge protection due to unregulated installers
Claims impacts
Solar faults can trigger structural fires, electrical burnout, or roof penetration leading to water damage each with significant quantum implications
Environmental & veldfire exposure:
Green environments, including bush estates and eco‑developments, introduce vegetation‑driven hazards that interact dangerously with solar and battery systems.
Insights from internal guidance emphasise how strong winds render even wide firebreaks ineffective and place duties on landowners to maintain fire‑readiness equipment and procedures.
Key hazards:
- Rapid fire spread in estates located in dense bush
- Delayed detection especially in unoccupied or remote dwellings
- Ignition from solar/electrical faults into surrounding vegetation
- Limited suppression capacity until emergency services arrives
Electrical infrastructure stress
Renewable systems layer additional load on domestic and commercial electrical networks, creating risk conditions do not present under original electrical CoCs.
Risk examples:
- Overloaded distribution boards
- Back feed hazards during grid outages
- Cheap or mismatched component substitutions
Compliance, non‑disclosure & policy fit:
Green technology introduces a growing gap between what clients install and what is declared at underwriting
Key hazards:
- Strengthen underwriting and policy wording
- Improve claims triage accuracy
- Reduce avoidable disputes
- Protect clients by encouraging safer installations
Please send all notifications to: nonmotorsalvage@hollard.co.za
The full process is outlined in the Hollard Insure Claims Framework.
How you can help us
If you wish to help improve TP recoverable fire losses, please notify us and we'll share the detailed process.