Insurance and the Commercial Sectional Title Scheme

The Sectional Titles Act [STA] does not differentiate between commercial, industrial, retail (collectively referred to as commercial) and or residential schemes, but it is safe to say that the STA was devised with residential schemes in mind as we estimate that +/- 70% of the sectional title schemes in the country are residential in nature. 

At Intersect our portfolio resembles this figure as we too have a 70/30 split between residential and commercial. 

A great many of our schemes are insured by 1 of the three larger insurers in the country and, based on the size of the book that we hold with them, we are able to negotiate the best rates and best cover for our clients. 

At renewal, we discuss the claims history of our mutual clients with the insurance brokers as well as changes in the market place that could affect each client, and apply the best-case scenario for each. 

Strictly speaking the sectional title policy covers the building and all fixtures and fittings such as roofs, walls, ceilings, floors and floorcoverings (if fitted), built in cupboards, basins, baths, toilets, doors and windows etc., as was delivered by the developer or as shown expressly on a sectional plan. 

But what about fixtures and fittings installed after that date or not reflected on a sectional plan (collectively known as non-standard improvements)? Of particular concern was the differentiation in commercial sections post a tenant installation, such as dry walling etc. 

After discussions with the aforementioned insurers we have negotiated that all policies under our management will be updated to include non-standard improvements, provided same is covered by the current sum insured for each section, and we would advise this to all commercial sectional title schemes. 

Having said that we also advise our commercial clients to review their internal fittings and fixtures (especially those with dry walling, plumbing etc. ) and estimate the replacement value of same and compare this to the most recent values as per the insurance policies.