Frequently Asked Questions (FAQ)

Why switch to Camargue Broadform Liability?

Background to the broadform vs multimark liability debate

The multimark (MM) policy was introduced to the South African market in 1987. The policy was used extensively by most insurers up until 2007 when SAIA decided that the continued use of a market agreed wording could be construed as contrary to the conditions of the Competitions Act no. 89 of 1998.

Whilst the policy is no longer endorsed as “market agreed”, many insurers and brokers continue to offer the same cover under a different name (which varies from insurer to insurer). Whilst this is understandable, this is not necessarily in the interests of the client.

Whilst the incidence and causes of fires and accidents may not have changed much over the past two decades, our civil legal environment has changed dramatically and the awards being made by our courts for third party property damage and bodily injury have increased exponentially. This essentially means that whilst the first party property insurance sections of the old multimark may still be sufficient, the liability covers are disdainfully lacking in coverage for the modern age.
The Camargue General Liability (CGL) product provides broad-form coverage that outperforms the older wordings in many ways.

Comparing the covers

1. The operative clause
   1. In order for the MM policy to respond, the insured has to establish that the third party loss occurred as a result of an “accident”. The word accident appears in the operative clause and means that the onus of proof lies with the insured.
   2. The CGL policy where the insured is legally liable. The cover is referred to as “non-accidental”. The word accident does not appear and means that if the insurers wish to repudiate based on the fact that an intentional act caused the loss, the onus of proof rests with them, rather than the insured. This can be of great benefit to the insured when submitting a claim. There can be many different legal interpretations of the word “accident” so to avoid the use of such an operative clause can be of great use to the prudent broker.

Conclusion: CGL provides a wider trigger that is less likely to lead to a claims dispute

2. Definition of Property Damage
   1. In the MM wording, damage is defined only as “loss of or damage to tangible property”
   2. In the CGL policy the definition is wider and includes:
      1. Actual damage to property
      2. Loss of possession or control of property (as may be the case if the property is not damaged as such but is simple inaccessible)
      3. Loss of use (as in (ii) above)
      4. Prevention of access

Conclusion: CGL provides a broader definition of damage meaning the TP property need not be physically damaged, merely unable to be used. This could be a consequential loss where no actual damage has occurred.

3. Definition of Injury
   1. MM provides for death, injury or illness to a person
   2. CGL defines injury as:
      1. Bodily injury
      2. Death
      3. Illness
      4. Disease
      5. Mental anguish

Conclusion:  Mental anguish is the differentiator here. Many underwriters do not view pain and suffering and loss of amenities as “bodily injury”. The absence of mental anguish cover could therefore produce a problem. If one uses the Road Accident Fund as a barometer to measure the awards for such things, a greater appreciation of the benefits of the wider cover can be experienced. Each year around 60% of the total benefits paid out related to non-pecuniary injuries such as pain and suffering and loss of amenities.

4. Territorial Limits
   1. MM restricts coverage to RSA, Namibia, Botswana, Lesotho, Swaziland, Zimbabwe and Malawi.
   2. CGL provides worldwide cover

Conclusion: In the modern South Africa many companies trade with foreign partners and undertake contracts throughout Africa, beyond the MM borders. CGL moves across all territories with the Insured.

5. Pollution
   1. MM covers sudden and accidental seepage, pollution or contamination
   2. CGL covers sudden and unforeseen pollution. Pollution is defined as:
      1. Release of liquids, gases, contaminants or pollutants
      2. Smells
      3. Noise, light, vibrations, electricity
      4. Temperature changes

Conclusion: MM cover may have been adequate in the past but disputes over what is accidental often negated the cover. Further to this, many insured’s are often faced with Nuisance type law suits (especially in respect of noise and light pollution), as is the case with restaurants and nightclubs in residential areas. CGL provides much more comprehensive pollution cover.

6. Products Liability and Defective Workmanship
   1. MM excludes losses caused by defective design
   2. CGL covers losses caused by products designed, manufactured, constructed, installed, repaired, altered by the insured.

Conclusion: CGL displaces the argument over whether a claim is covered due to design vs manufacturing faults

7. Negligent Advice
   1. Some MM policies provide limited Gratuitous Advice cover as part of the product liability section
   2. CGL provides specific negligent advice cover supplied with products and work performed. The cover can also be extended to cover full errors and omissions.

Conclusion: With the advent of Consumer Protection Legislation governing advice rendered, wider e&o type covers and advice protection are becoming critical. CGL delivers this.

8. Extensions of Cover (with the exception of (a), (b) and (c) all are available at an additional premium in CGL)
   1. Statutory Defence Costs
      1. MM restricted to OHS Act, Mines and Works Act, Electricity Act,
      2. CGL covers all statutes except Companies Act and Labour Relations Act.
   2. Defamation and Wrongful Arrest
      1. MM generally sub limited to R50,000 or R100,000 per period
      2. CGL covers each separately and limits are never less than  R250,000 per period of insurance.
   3. Employers Liability
      1. This is generally a separate section in MM but does not cover employee to employee liability
      2. MM cover is limited to South Africa
      3. CGL covers employee assault and employee-to-employee liability. Cover is worldwide.
   4. Errors and Omissions
      1. Not available in MM
      2. CGL Covers professional services
   5. Breach of Copyright
      1. Not available in MM
      2. CGL Covers alleged breach of copyright or patent
   6. Advertisers Liability
      1. Not available in MM
      2. CGL Covers losses and injuries caused by the advertising activities of the insured
   7. African Territories
      1. Not available in MM
      2. CGL Provides umbrella coverage if the insured has been forced by law to take out primary insurance in an African country
   8. Warehousemen’s Liability
      1. Not available in MM
      2. CGL Provides cover for goods in the insured’s custody and control in a warehousing operation
   9. Carriers Liability
      1. Not available in MM
      2. CGL Covers goods transported on behalf of TP
   10. Custody and Control
       1. Excluded by MM
       2. CGL covers goods temporarily in the insured’s custody
   11. Pure Economic Loss
       1. Not available in MM
       2. CGL Covers pecuniary/consequential losses where no physical damage has occurred.
   12. Products Inefficacy
       1. Excluded by MM
       2. CGL covers losses caused where products fail and cause a loss in expected value of TP property.
   13. Contractors Liability
       1. Not available in MM
       2. CGL Covers construction work undertaken by the insured
   14. Lateral Support
       1. Excluded by MM
       2. CGL Covers losses where lateral support structures have been damaged or interfered with
   15. Claims Preparation Costs and Professional Fees
       1. Sometimes offered in MM
       2. Available in CGL
   16. Incidental Medical Malpractice
       1. Some first aid cover available in MM
       2. Covers medical malpractice allegations against the insured’s medical staff or first aid employees
   17. Exhibitors Liability
       1. Not available in MM
       2. Covers losses associated with the erection of stands at exhibitions
   18. Extended Reporting Period
       1. 36 months available in both MM and CGL
   19. Excess of loss motor and passenger liability
       1. Not available in MM
       2. Covers top up motor exposures up to R100m

Conclusion: The extensions of cover available in the CGL policy provide a wide range of benefits to suit practically every industry. Most of these are not available or are outright exclusions on the multimark type policy.

Please note that this should not be used as a sales tool without proper discussion between the intermediary and the client. This summary gives an outline of the benefits available through Camargue and the specialists within the company should be consulted for specific information.