JIM C writes via looklocal:
The article, “Blackout: claims rejected”, refers.
Very convenient for the metro.
Comments and issues for clarification:
1. Residents did not enter into any contract with the contractor, the metro did. The metro now conveniently wants to absolve themselves from all responsibility.
2. Can the metro confirm that the contractor did have contractors all risks and liability cover in place? Compliance with this requirement was the metro’s responsibility when they entered into the contract.
3. Is the contractor still operating (in business) and is the insurance cover still in place?
4. If the insurance cover is in place, does it specifically provide cover for affected third parties (the residents)? Does the wording of the policy provide a fixed time period for lodging of claims? Has this time period expired?
5. What is the contractor’s overall limit of liability in terms of the contract? What are the contractors’ insurance limits? Does the metro have its own additional insurance/s in place to cover residents if claims exceed the contractor’s limits?
6. Why can the metro (as a direct party to the contract) not receive claims from the residents and facilitate the processing of the claims against its own contractors’ insurers? The metro’s stance on the matter is, at best, unethical.
They must be fully aware of the complexities involved for third parties (residents) trying to obtain insurance policy information, complete documentation, motivate and submit claim documentation and negotiate the inevitable assessor’s/loss adjuster’s attempts to reject any claim.
This whole saga will probably fade away with residents (once again) bearing the brunt of the metro’s incompetence. Could be a good opportunity for residents in the legal fraternity to get together and put in a civil claim against the metro.
How long must residents endure this type of abusive treatment by the metro without response?
Sam Modiba, metro spokesman, replies:
1. The requirement of Ekurhuleni Metropolitan Municipality compelling contractors to take out Contractors All Risk and Liability cover when doing work for EMM is a supply chain policy issue which the metro’s insurance section has no control over. It can only be changed if the policy is amended.
The metro is not absolving itself from anything. All that is being said is that claims have to be directed to the correct responsible party. Claimants remain at liberty to seek resolve through the legal avenues at their avail.
2. Yes.
3. Yes.
4. The EMM’s insurance section cannot comment on this unless we are provided with a copy of the contractors CAR policy document. The contract conditions usually stipulate that liability cover should be taken out which would ensure cover for such incidents.
5. Again we cannot comment on the detail of the contractor’s policy without the relevant document. The EMM has a second tier contractors all risk cover in place to ensure cover where, if the cover of the contractor does not make adequate provision for the claims if an incident occurs which activated the contractors all risk cover.
The activation of EMM’s secondary cover will depend on the merits of each individual occurrence but the contractor will have to prove that all reasonable precautions to ensure possible risks were taken as well as prove that it could not be foreseen that claims would exceed his own cover.
The contractor may, however, still remain liable even if his cover is proven to be inadequate.
6. If standard insurance protocol were followed by individuals wanting to claim they would have submitted a claim against their own insurers who would then, in turn, institute recovery actions against the contractor as first respondent and possibly EMM as second respondent.
Thus, claimants would have avoided any complexities relating to the claims process because it would have been dealt with by professionals equipped to do so.
Any claims of unethical conduct referred to are denied because it cannot be expected of the EMM to prove or administer claims against itself on behalf of claimants. No effort or costs were spared to ensure the outage was repaired within the shortest possible period.
As stated previously, claimants always remain at liberty to pursue any legal avenues at their avail to further any liability claim whether it be against the contractor or the EMM; but the legal requirements to prove liability as well as losses incurred will remain the responsibility of the claimant.
