Insurance warning in South Africa

Many insurance policies in South Africa take a “one-size-fits-all” approach to surge protection, which could put both insurers and policyholders at risk.

Dr Andrew Dickson, an engineering executive at CBi-electric, warned that meeting insurer requirements does not guarantee sufficient protection against power surges in South Africa. 

“In a country where lightning strikes, load-shedding, and grid instability are everyday occurrences, this oversight could have costly consequences for both parties,” he said.

Dickson’s comments come in light of insurers increasingly requiring surge protection devices (SPDs) for property owners. 

In South Africa, SPDs are crucial for protecting electrical installations from overvoltages, especially those caused by lightning.

However, Dickson warned that these requirements do not necessarily safeguard policyholders and their assets.

Rather, they are often simply a method to fulfil a compliance obligation without offering meaningful protection against real-world electrical threats.

Dickson’s concerns stem from the fact that electrical surges vary in origin and intensity, yet many insurance policies recommend a “one-size-fits-all” approach. 

He explained that some surges are dramatic, like those caused by direct lightning strikes, while others are smaller but equally damaging, such as switching transients triggered when power is lost and restored during load-shedding.

These surges behave differently and pose unique risks, which is why a one-size-fits-all approach to protection, like requiring the same type of SPD regardless of a property’s location, use case, or exposure level, does not work. 

“This blanket approach may fall short of protecting the very assets these policies are designed to cover,” he said.

Many insurers align with South Africa’s national wiring code by mandating Class 2 SPDs for low-voltage installations.

However, Dickson said the problem often lies in insurers’ insistence on SPDs with higher kA ratings, which reflects a misconception that higher peak values are a “silver bullet” in providing effective protection, which is not necessarily the case.

South Africans left unprotected

Dickson explained that there are three classes of SPDs, namely 1, 2 and 3, which are all designed to handle different types of surges.

For example, class 1 SPDs are designed to handle extreme surges from direct lightning strikes and are typically installed where power enters a premises or building. 

This class of SPDs act as the “first line of defence” by intercepting high-energy surges before they can enter the internal electrical distribution system. 

Dicskon explained that these devices are also typically used in remote areas, locations at high risk of direct lightning strikes on incoming services, or where there’s a threat of explosions or damage to sensitive equipment.

The second class of SPDs, which are more common in domestic settings, offer protection from smaller surges associated with indirect lightning strikes or switching transients in urban areas.

Class 3 protectors provide localised protection for sensitive electronics like televisions, routers, or gaming systems and are located at the point of consumption.

“Each class serves a different purpose, and the best protection often involves a layered approach. Tailoring the solution to the property’s risk profile is essential,” Dickson said.

“While the SPD class defines the type of surges the device is designed to handle, the kA rating is another piece of the protection puzzle. This rating indicates the maximum current the device can divert in a single event.”

He explained that insurers often specify a 40kA rating, based on the belief that higher ratings equate to better protection. 

However, this is not always true. “It’s like using a 10-pound hammer to drive in a 10mm nail: it might work, but it’s excessive and inefficient,” he said.

In practice, Dickson explained that what matters more is how the SPD performs under repeated smaller surges, which happen most often and result in cumulative wear. 

“Devices degrade over time, regardless of their kA rating. That’s why the joule rating, which indicates how much total energy the SPD can absorb, is an important guide to long-term protection,” he said. 

“Both values – the kA rating and the joule rating – should be considered together when specifying SPD requirements for an installation.” 

“This ensures a more holistic approach to surge protection and means more effective, practical policy guidelines from insurers.”

The solution

Dickson said that, while it is encouraging that insurers are starting to mandate SPDs, these recommendations must go further. 

“Relying solely on class and kA rating without considering real-world electrical threats can leave gaps in protection or provide a false sense of security,” he said.

Dickson explained that South Africa’s national standards for protecting people, structures, and devices are well-established and clearly outline how protection should be applied correctly. 

“However, a ‘sledgehammer approach’, where protection is applied in a broad or excessive manner, does not guarantee the intended level of safety,” he said. 

“As a result, the actual protection may fall short of expectations. This leaves insurers vulnerable to claims, despite having enforced requirements, and questioning why the anticipated risk mitigation hasn’t materialised.”

He recommended that insurers engage electrical engineers and apply the national standards to ensure that surge protection is not just a “tick-box exercise” but rather a robust defence against electrical damage. 

“The ultimate objective should be to protect people, property, and productivity with solutions grounded in both science and context, rather than merely fulfilling an underwriting requirement,” he said.

This article was first published by Daily Investor and is reproduced with permission.