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Battered by national lockdowns of varying intensity since March last year, many businesses have been further affected by weeks of looting and riots in July. These cost 330 South Africans their lives, while our country lost about R50 billion in output, with an estimated 50,000 informal traders and 40,000 businesses affected, placing 150,000 jobs at risk.

For some businesses who had managed to survive in an economy that contracted by 7% last year, it was a final blow. In the economic hubs of Gauteng and KwaZulu-Natal, businesses, shops and warehouses were destroyed or shut down. Virtually all businesses across the country – and in neighbouring countries – were impacted by the resulting food, fuel and medical supply shortages, as well as disruption of supply chains when the ports of Durban and Richards Bay were brought to a standstill and the N3 highway was closed.

In response, on 25 July 2021, President Ramaphosa announced emergency tax measures to assist those affected by the riots and looting.

Three tax relief measures offered

1. A tax subsidy of up to R750 per month, for four months, per employee earning below R6,500 – 1 August 2021 to 30 November 2021 – under the current Employment Tax Incentive (ETI) for private sector employers. The first extended ETI can be claimed in your August EMP201 (due 7 September). SARS will pay monthly ETI refunds for the four-month period commencing on 13 September, subject to verification or audit steps required.

   

2. Deferral of 35% of Pay–As-You-Earn (PAYE) liabilities over the three months – 1 August 2021 to 31 October 2021, without penalties or interest. The first deferment can be claimed on the August 2021 EMP201 return, due 7 September. After 7 November, SARS will determine the four equal payments for the total amount that you have deferred and include it in your monthly Statement of Account. Payments will be made over a four-month period that will commence on 7 December 2021 with the last payment due by 7 March 2022.

   

3. Deferral of excise duty payments for up to three months for businesses in the alcohol sector.

   

   Note that this deferral is available immediately.

What are the qualifying criteria?

• Only tax compliant companies qualify for the emergency tax measures and that means the business:
  • Is registered for all required taxes.
  • Has no outstanding returns for any taxes it is registered for.
  • Has no outstanding debt for any taxes it is registered for, excluding instalment payment arrangements, compromise of tax debt, and payment of tax suspended pending objection or appeal.
• The employer must be registered with the South African Revenue Service (SARS) as an employer by 25 June 2021.
• The employee tax subsidy applies to tax compliant private sector employers with employees earning below R6,500 per month.
• PAYE deferrals apply to tax compliant businesses with a gross income of up to R100 million, with a limitation that gross income should not include more than 20% of income derived from specific listed sources.
• Excise duty payments deferrals apply to compliant licensees in the alcohol sector that have applied to SARS.

Issues to consider

• You are responsible – The law holds an employer personally liable for an amount of tax withheld and not paid to SARS, or which should have been withheld but was not withheld. The employer could also be held criminally liable for failure to withhold and pay PAYE.
• SARS’s focus on employers – Just weeks ago SARS announced it has teamed up with the NPA (National Prosecuting Authority of South Africa) to deal with tax non-compliance, initially focussing on non-compliant employers. SARS’ Criminal Investigations Division has already handed over 30 non-compliant employers to the NPA in their new joint venture.
• Mistakes are costly – While previously a mistake made by a taxpayer was only a crime when it was done “wilfully and without just cause”, taxpayers can now in certain cases be convicted of an imprisonable criminal offence even if non-compliance was due to negligence or ignorance. If you decide to implement the relief measures, call in professional assistance from your accountant to ensure accuracy and recordkeeping.
• We’ve been warned – Before announcing the details of these emergency tax relief measures, SARS Commissioner Edward Kieswetter made it clear that SARS has the capability to detect and make it costly for those that are non-compliant with their legal obligations and engage in criminal malfeasance. Get a professional opinion to ensure your company qualifies and that the relief is correctly claimed.
• Expect a verification or audit from SARS – ETI refunds will be subject to any verification or audit steps that may be required. Your accountant can assist you in preparing for the likelihood of verifications and audits, and in successfully completing a verification or audit when selected.
• Will you have recovered sufficiently in three months? Three months is a very short time in these unpredictable times. The ability to recover during the grace period is an important consideration: the company’s cash flow will improve initially, but after the three-month deferred payment period, an even higher PAYE liability is due – over the year-end and into the next financial year. Your accountant can help you to carefully project your financial position over the coming months to enable an informed decision.
• Can you afford the deferred tax repayments? While the lower PAYE payments for the three months of August, September and October will provide short-term cashflow relief, one quarter of the total deferred amount must be paid – on top of the company’s normal PAYE obligation for each month between November (due 7 December 2021) and February (due 7 March 2022). If your payment is made late, you will forfeit the benefit of the tax relief for PAYE and SARS will impose penalties and interest on the calculated total payable. It will also create other challenges, such as not being able to obtain a tax clearance certificate required for loan applications and tenders.

While these tax measures introduced for employers may be a lifeline for some companies to survive, all businesses are well advised to call on the advice and assistance of their accountant, both when carefully considering the decision to take up this tax relief and in claiming the tax relief.

Earlier this year, SARS and the NPA (National Prosecuting Authority of South Africa) announced that they are joining up to deal with tax non-compliance, initially focussing on employers.

Employers under intensified scrutiny

While this enhanced collaboration covers a number of aspects, the immediate focus will be non-compliance by employers, who deduct employee taxes and levies, never turn those taxes over to SARS, and do not file their returns when required, as well as “other general corrupt activities”.

To enable the collaboration, the Criminal Investigations Division within SARS will allocate dedicated capacity and work closely with the NPA in its Specialised Tax Units (STUs). Solid cases ready for prosecution will be prepared in a coordinated manner across the country. The SARS regional leaders in criminal investigations and the NPA regional directors of the STUs will enrol these cases on a specific date for each region.

Why audit your employees’ tax?

The Tax Administration Act holds an employer liable for an amount of tax withheld and not paid to SARS, or which should have been withheld but was not withheld. The employer could also be held criminally liable for failure to withhold and pay PAYE.

SARS’ Criminal Investigations Division has already handed over 30 non-compliant employers to the NPA in their new joint venture and are working to identify and prioritise more cases.

They are further enabled by recent changes to the tax laws that effectively lowered the threshold for criminally prosecuting taxpayers through removing the requirement to prove that the taxpayer’s conduct was “wilful and without just cause” for selected offences. While previously a mistake made by a taxpayer was only a crime when it was done “wilfully and without just cause”, taxpayers can now in certain cases be convicted of an imprisonable criminal offence even if non-compliance was due to negligence or ignorance. Offenses include, among others, failure to submit a return when required to do so; failure to retain all relevant substantiating records; failure to provide any information requested by SARS; or failure to disclose any material information to SARS.

This, along with SARS’ and the NPA’s intensified focus on employers, as well as SARS’ increased abilities to draw taxpayer information from third parties, make an employee tax audit a necessity.

It also protects employees. Employees’ tax is not a separate form of tax, but rather an amount that the employer is obliged to withhold in respect of the employee’s liability for normal tax. On assessment annually, the employee’s tax withheld is set off against the employee’s liability for normal tax. The correct calculations and deductions will certainly help protect employees from unexpected surprises on assessment, and will also ensure that the employer’s processes are not the cause of disputes or delays when, for example, an employee needs to claim UIF.

How to audit your employees’ tax

• An employee tax audit is a deliberate process undertaken to review payroll taxes and records, with the intention of ensuring accuracy to protect your employees as well as to comply with regulations. It is also an important part of a payroll audit.
• Verify the employee information on your payroll: Do you have the required information for each employee in respect of identifying and calculating the applicable taxes, rebates and more? For example, the employment relationship affects the classification of an employee, which in turn determines the tax rate that must be applied.
• Verify and review the remuneration for each employee: Remuneration, whether in cash or otherwise, includes any wage, salary, overtime, bonus, voluntary award, leave encashment, fee, stipend, commission, gratuity, pension, emolument, annuity, allowance, lump sum benefit payment, director’s remuneration, etc. Can the remuneration be structured more tax efficiently for the employee?
• Verify that the correct taxes and levies are deducted:
  • Pay As You Earn (PAYE) must be withheld from the remuneration paid to employees, subject to thresholds and rebates.
  • Unemployment Insurance Fund (UIF) contributions, for which the monthly threshold recently (1 March) increased from a maximum of R14,872 pm (R178,464 pa) to R17,712 pm (R212,544 pa).
  • Skills Development Levy (SDL) is payable by employers with a payroll of more than R500,000 pa.
  • Employment Tax Incentive (ETI) rebates incentivise employers to employ young workers – if your company has taken advantage of the ETI rebate, these tax deductions should be verified in respect of each qualifying employee.
• Verify that the correct amounts are deducted: Both over deductions and under deductions as well as any corrections to submitted returns will certainly flag your employee tax account at SARS for audit.
  • Make sure the correct tax rate is used to withhold the correct PAYE taxes from each employee’s wages, verifying that all tax thresholds, rebates, directives, tax credits, deductions, benefits, exemptions, contributions and allowances have been considered and correctly applied where appropriate.
  • UIF is calculated at a rate of 2% of remuneration (1% employee and 1% employer contribution).
  • SDL is calculated at a rate of 1% of total remuneration paid to employees, excluding certain payments such as reimbursements or severance benefits.
  • The ETI allows “eligible employers” of “qualifying employees”, subject to specific criteria, to claim a rebate with a maximum value of R1,000 per month for employees earning up to R4,500 per month, with the rebate tapering to zero at the maximum monthly remuneration of R6,500. The ETI was recently extended to February 2029 and should be considered with the assistance and advice of your accountant. Employers will be able to claim the incentive for a 24 qualifying month period for all employees who qualify.
• Verify that the deducted amounts are correctly declared and remitted: The employees’ taxes and levies deducted from an employee’s remuneration must be declared on the Monthly Employer Declaration (EMP201) return and paid to SARS within seven days after the month end, or the previous working day if the seventh day is on a weekend or holiday. Late filing is subject to newly-introduced penalties, and late payments are subject to an immediate penalty of 10% and interest at the prescribed rate will be charged monthly on the outstanding amount.
• Employment Taxes Validation – IRP5 Certificates: An employer must furnish employees from whom employees’ tax was deducted with an IRP5 certificate, within the prescribed tax period. From the 2020 year of assessment, SARS is performing tax calculations on the IRP5/IT3(a) certificates. Where the incorrect amount of tax was deducted from the employee, a letter will be issued to the employer.
• Verify compliant employee record keeping: Employers must keep a number of specified records for each employee for a period of five (5) years and make them available for scrutiny by the Commissioner.
• Schedule regular employees’ tax audits: Ideally, employers should conduct a payroll and employees’ tax audit on a routine basis and certainly any time there are changes in the tax regime, the labour laws, in the business or in its internal processes.
• Professional processes: Much of a business’ employee tax risk can be mitigated by putting professional processes in place. Invest in SARS-compliant automated payroll software with training for the relevant staff members and regular legal updates; or outsource your payroll and its taxes to professionals such as your accountant or even a payroll specialist.

Healthy cash flow is what keeps a company afloat. The ability to pay suppliers and staff, without risking the future of the business, entirely independently of expected new payments, is vital for any enterprise to keep going.

In this era of regular redundancies and corporate collapses, managing your cash flow is the most important aspect of managing your business. Key clients and customers getting into difficulties and potentially failing puts serious strain on your own company’s ability to stay afloat. The six tips below should help you stay solvent even if your biggest clients bow out.

1. Secure the debt upfront
   
   Firstly, to talk “prevention rather than cure” for a moment, seek advice on taking some form of security for your debt (a cession of the client’s debtors perhaps) upfront. As we shall see below, being a “secured creditor” gives you a much better chance of at least partial recovery in the event of liquidation than being a “concurrent creditor”.
2. Request upfront payments as standard
   
   Still talking prevention, requesting payment up front can often feel like a rude or difficult thing to do. You may fear offending clients by implying they will not pay, or you don’t want to scare new business away by asking them to trust you to deliver. At the end of the day upfront payment is about trust; and asking for someone to pay you before you deliver may feel wrong. It does, however, have many advantages.

   Apart from ensuring you will not be taken for a ride by fraudulent clients, asking for payment up front also protects against failure of those clients. The worst situation you can find yourself in is one in which you have done work, and now owe your own suppliers, only for the payment not to come through. Asking for money up front means this will never happen and questions around scaring off clients are generally unfounded. Of course, your own suppliers may already be asking you for upfront payment, especially in the current environment.

   If a client has decided to work with you, they have likely done their research and are already trusting you to deliver within certain time frames and deadlines that they themselves need to meet. Generally there is also an understanding that costs will be incurred by you to meet their requirements. Asking for upfront payment is therefore a relatively small pain point in this transaction and upfront payments are therefore common in trade businesses, or creative enterprises where payments may need to be made in order to start a job.

   If you still feel uncomfortable asking for the money up front, at least ask for a deposit and progress payments.  Be prepared to pause work on projects if payments are late before you incur additional expenses.

   Particularly if it is your standard policy, you need not feel you are discriminating against any one client. In the long run your cash flow will be healthier for it.

3. Win new clients
   
   The first, and most important, thing to do to protect your company from going under when a client fails, is to have as many clients as possible. Diversifying your client base means you are not as dependent on that one client who may be struggling. It sounds like obvious advice, but there are business owners who, once that one big client is secured, sit back on their haunches and live the easy life servicing that goose that lays the golden eggs.

   It is important then to never stop marketing, or hustling for new business, and this is particularly important when that one big client goes under. One person’s misfortune is another’s gain, and your client’s failure is going to have a ripple effect through their industry. Somewhere, one of their competitors may find some space to grow. By marketing yourself and your products/services you may find your business in the perfect position to pick up that work when they start expanding.

   So while it’s important to focus on the clients you have now, it’s also important to start planning as early as possible for a future without one or more of them. If you landed one big client, the chances are you can land another.

4. It’s time to become strict
   
   No matter how long you have been dealing with a client, the second you suspect they may be struggling financially it’s time to alter the terms of your arrangement. Protecting your business needs to be your number one priority. If you had the client on a 90 day payment plan, move that to 30. Stop paying for things on their behalf and secure payments wherever possible up front. Suspend projects until payments are received. If your product or service is key to their operations they will find a way to pay in advance, and if it’s not, well your payments would have been first on the chopping block anyway. There is absolutely no sense continuing work and spending good money chasing bad.
5. Negotiate early and be willing to sacrifice
   
   As soon as a client indicates that they are in financial distress it’s time to look at your books and decide just how much of what they owe you is essential and how much you could reasonably lose. Then negotiate as below, because when a company goes into liquidation there are three types of creditors and which kind you are will determine just how likely you are to get all or a portion of your money back during the winding-up process.

   Preferent creditors include employees of the company, who are owed wages, and of course the tax authorities.

   Secured creditors are those that have liens/security on the debtor’s property (such as the bank that loaned the company money to buy a factory taking a cession of debtors).

   Unsecured (“concurrent”) creditors include those that provided the company goods or services, such as suppliers and contractors, without taking any security. Unsecured creditors will be the last to get paid in any bankruptcy process and are therefore most likely to lose everything. Getting at least some of that back before the process begins is therefore the best you can hope for.

   Once you become aware of a client’s financial difficulties, making them an attractive offer may help get something into your accounts. A good offer would be to ask for a 30% payment now with an offer to extend payment on the rest to a later date. An alternative would be to ask for 50% payment now in return for wiping out the remainder of the debt. The earlier in the process you do this, the more likely you are to get something back and don’t be afraid to be pushy. Keep lines of communication open and send frequent reminders. Most people feel bad about letting down their vendors and making sure you are front of mind will also encourage them to pay you out first.

   A client’s financial difficulties could also result in their going into business rescue. This will mean that no payments may be demanded by creditors until (if) they trade out of business rescue back into health. So being aware of how your customers are doing is essential. This also applies to your suppliers as the failure of a key supplier may be a real problem for your business.

6. Do a Cost-Benefit analysis
   
   When your client has actually gone into business rescue or liquidation it’s time for you to decide whether you are going to pursue your claim. This can be an expensive and time consuming process and the amount of debt involved will need to be measured against the costs and time chasing it.

   In a practical sense, you need to look at the value of the client company, how many assets they have and what chance there is that there may actually be any money to recover. Then look at how much time and money you can spend chasing that money. Again beware of spending good money chasing after bad.

   To be in line for some payment in a liquidation, you will need to submit your claims with proof at the first meeting of creditors which will be scheduled by the liquidator, which sounds like an easy decision to make. You must be careful, however, because if there are not enough assets in the company to satisfy the cost of liquidation, anybody who proves a claim at a meeting of the creditors may be called upon to contribute to the costs of liquidation. Check first with the liquidator and find out if there is a danger of a contribution being levied on concurrent creditors.

   Only go as far along in the process as you are willing to, based on costs, efforts and the money you reasonably expect to recover. There is little sense spending good money to chase bad. Often your time will be better spent looking for a new client.

Background to the emergency tax relief measures

On 25 July 2021, President Ramaphosa announced emergency tax measures. This was in response to the continuing COVID-19 pandemic and recent unrest in the country that resulted in the destruction of businesses. Further details of the proposed measures were provided by the Minister of Finance and National Treasury on 28 July 2021. This is an overview of the relief measures applicable to Small, Micro, and Medium Enterprise (SMMEs).

Do you qualify for the emergency tax measures?

In order to qualify for the emergency tax measures, you must be tax compliant, which means that you:

• Are registered for all required taxes
• Have no outstanding returns for any taxes you are registered for
• Have no outstanding debt for any taxes you are registered for, excluding:
  • Instalment payment arrangements
  • Compromise of tax debt
  • Payment of tax, pending objection or appeal.

You can view your tax compliance status via eFiling under your “My Compliance Profile”, or request your latest Statement of Account for the taxes you are registered for.

What are the tax relief measures?

The announced measures are:

• The introduction of a tax subsidy of up to R750 per month for the next four months for private sector employers who have employees earning below R6500. This subsidy will be provided under the current Employment Tax Incentive.
• Tax compliant businesses with a gross income of up to R100 million will be allowed to delay 35% of their Pay-As-You-Earn (PAYE) liabilities over the next three months, without penalties or interest.
• Tax compliant businesses in the alcohol sector can apply to the SARS for deferrals of up to three months for excise duty payments. Please note that this can only be done after the circumstances are set out to justify the deferral.

What is the period for the relief?

Below are the different periods for the three types of relief:

• Employment Tax Incentive (ETI)
• PAYE Deferrals
• Pause on Excise payments for alcohol

Employment Tax Incentive (ETI) tax relief period

Tax relief under the ETI is available for a four-month period from 1 August 2021 to 30 November 2021. The first extended ETI can be claimed in your August EMP201. Please remember that this is due by 07 September 2021. The maximum monthly amount that will be permissible under the ETI during this period will be increased according to the following criteria:

• For employees who are eligible under the current ETI Act, the amount increases from R1 000 to R1 750 per month in the first qualifying 12 months, and from R500 to R1 250 per month in the second 12 qualifying months.
• A monthly ETI claim of R750 will be allowed for employees who are between 18 and 29 years old, and are no longer eligible for the ETI due to the employer having claimed it for them for 24 months, or who were in the employer’s employ before 1 October 2013.
• A monthly ETI claim of R750 will be allowed for employees who are between 30 and 65 years old, and are no longer eligible for the ETI due to their age.

SARS will also pay monthly ETI refunds for the four-month period, instead of every six  months as is normally the case.

To claim tax relief under the ETI:

• Capture the full PAYE Liability (The form will calculate the PAYE payable at 100%, you cannot change this value)
• Capture the ETI Calculated
• Calculate 65% of the PAYE Liability in terms of the tax relief for PAYE for the first three months
• Limit the ETI Utilised to the lesser of ETI Calculated or 65% of the PAYE Liability for the first three (3) months or 100% of the PAYE liability in the 4^th month
• Calculate the Total Payable as (65% of the PAYE Liability for the first three months, or 100% plus the first payment of the deferred amount in the 4^th month less ETI utilised plus SDL Payable plus UIF Payable.

Note:

• If your payment is made late, you will forfeit the benefit of the emergency tax relief for PAYE and SARS will impose penalties and interest on the calculated Total Payable
• Check your Statement of Account after 48 hours of submitting the EMP201 to make sure that SARS has not revoked the discount due to non-compliance.

PAYE tax relief period

The tax relief for PAYE is available to qualifying businesses for the three month period from 1 August 2021 to 31 October 2021. The first deferment can be claimed in your August 2021 EMP201 return, which is due by 07 September 2021.

To claim tax relief for PAYE:

• Complete the EMP201 as per normal with the full PAYE Liability (the form will calculate the PAYE payable at 100%, you cannot change this value)
• Calculate the Total Payable as 65% of the PAYE Liability plus SDL Payable plus UIF Payable.

Note:

• SARS will issue a Statement of Account, reflecting the tax relief (deferred amount) for PAYE and the total amount payable for that respective period
• If your payment is made late, you will forfeit the benefit of the tax relief for PAYE and SARS will impose penalties and interest on the calculated Total Payable.

PAYE deferral months:

For period	File in
August 2021	September 2021	* month 1 of relief
September 2021	October 2021	* month 2 of relief
October 2021	November 2021	* month 3 of relief

Payment of the deferred PAYE liability

After the 7th of November 2021, SARS will determine the four equal payments for the total amount that you have deferred and include it in your monthly Statement of Account. Payments will be made over a four month period that will commence on 07 December 2021 with the last payment due by 07 March 2022.

Alcohol industry: Payment Deferral of Excise Duty Payments on Alcohol

Due to the restrictions on the domestic sale of alcoholic beverages, tax compliant businesses in the alcohol sector can apply to SARS to obtain deferrals of up to three months for excise duty payments. Please note that this can only be done after the circumstances are set out to justify the deferral.

This is expected to help a significant number of businesses that are under pressure in terms of cash flow and their ability to honour payments to SARS.

The payment deferments will be in accordance with provisions of the Customs and Excise Act which allows excise traders to request for deferrals of duties as per conditions in section 105 of the Act.

How do I apply for the Excise deferral?

Applications can be sent to the following email address OSC@sars.gov.za.

Sasria Claims

As you have seen in the media, several protest actions arose in KZN, Gauteng and some other areas.

Sasria SOC Ltd would like to give you the assurance that we are well capitalised with capital adequacy ratio of more than 3 (three) times, and in addition we have adequate reinsurance programmes We are confident that we will be able to provide for the anticipated claims.

The current situation necessitates that we communicate with you as our Agent Companies and Brokers, the claims process to ensure we are well positioned as partners to navigate these trying times.

We are ready to help you
1. Internally, we have created a CAT event code, and centralised all the claims that stem from the recent events to a specialist team of experts who will facilitate the claim handling.
2. We request that all claims stemming from these events are registered with the Agent company who will in turn register the claims with Sasria. This is as per our business model and ensures we are all able to manage the claims effectively and expediently. Please use the email addresses as provided below.
3. Please ensure that all relevant information for claims registration is provided at the point of registering the claim with Sasria (loss adjuster report, coupon, underlying policy, proof of premium payment).
4. We request that Loss Adjusters and Assessors be appointed within  the given mandates. For all claims above R1m, the confirmation of appointment of Loss Adjusters should be confirmed by contacting the claims contacts stated below.
5. We have also appointed Loss Adjusting companies to collate all information to expedite the claims.

To avoid unnecessary delays in managing the claims, it is important that the above process be followed and complied with.

We have also received several queries relating to underwriting. In the event that your client requires Sasria cover, please proceed and issue coupon following our underwriting regulations. Clients may request to initiate Sasria cover at any time or increase their insured limits as per the regulations. We will honour all new business requests, however, the client will need to declare no existing damage is in place at the time of issuing cover or increasing cover. Pre-existing damage is not covered. We urge all Agent Companies to review the regulations published on our website, www.sasria.co.za.

Again, we want to ensure you as our partners, that we are well geared to facilitate the claims that may arise, and we value your continued support.

Contact details
Claims:

New Claims: newclaims@sasria.co.za

Existing Claims: claims@sasria.co.za please use the CMS claim number from the original registration in the subject line to allow for auto allocation.

Payment: payments@sasria.co.za for invoices and signed releases /AOL’s. please use the CMS claim number from the original registration in the subject line to allow for auto allocation.

For Loss Adjuster mandates and other queries regarding this claims –                                                    nomfusig@sasria.co.za Nomfusi Gogoba
jackp@sasria.co.za Jack Poopedi
richardp@sasria.co.za – Richard Phakathi
Mmakgomom@sasria.co.za Mmakgomo Motalane (claims manager)

Underwriting queries:
Please refer all underwriting queries to underwriting@sasria.co.za.

Lastly, I would like to thank you for your continued support and cooperation. In these trying times, your assistance will aid us in delivering the acceptable service to our mutual clients.

Should you encounter any problems, please do not hesitate to contact me.
Fareedah Benjamin
Executive Manager: Insurance Operations

General query bank
1. What is Sasria?
Sasria is a Short-Term Insurance Company that provides coverage for damage to property caused by special risks such as politically motivated malicious acts, riots, strikes, terrorism and public disorders.

2. Who owns Sasria?
Sasria SOC Ltd is a public enterprise listed under Schedule 3B of the Public Finance Management Act No. 1 of 1999. Sasria is wholly owned by the State and reports directly to the National Treasury.

3. What does Sasria cover?
Sasria covers the following risks:
– Terrorism
– Public disorder
– Strikes (e.g. labour unrests, etc.)
– Riots
– Political (e.g. service delivery protests, etc.)
– Non-political (e.g. student riots, commuter agitation, etc.)

4. Is Sasria cover compulsory?
Sasria cover is not compulsory. The policyholder has an option not to purchase Sasria cover, provided that they understand what they are exposed to without Sasria cover.

5. How do I buy Sasria cover?
Sasria cover is bought through insurance companies (referred to as Agent companies) who are responsible for the administration of Sasria cover. Clients who have brokers can speak to their brokers to arrange Sasria cover for their assets, on their behalf.

6. Who qualifies to buy Sasria cover?
Sasria cover is available to individuals and businesses that have property situated within the borders of South Africa, as well as South African waters.

7. Does Sasria cover war?
No, war is an exclusion in terms of Sasria.

8. Does Sasria cover pandemics such as Covid 19?
No, Sasria does not cover pandemics or any financial loss as a result of a pandemic.

9. Am I covered by Sasria if I get injured in a strike or protest?
Sasria does not have a license to cover personal injuries or loss of life, therefore excluded.

10. Does Sasria cover natural disasters such as hail, floods, earthquakes?
No, natural disasters are excluded under the Sasria cover.

11. Who may issue Sasria cover?
Sasria Coupons and Policies may only be issued by Insurance Companies (referred to as Agent companies) who have received authority from Sasria and have signed outsourced and intermediary agreement.

12. Sasria cover attaches to the underlying policy, does this mean my property is covered for Sasria in the same territories as the underlying policy?
Sasria cover is restricted to property situated within South African borders and waters.

13. Does Sasria provided any liability cover?
No, Sasria does not cover liability.

14. As a government employee, is my property automatically covered for Sasria, since it is a State-owned Company (SOC)?
Sasria cover is not automatic to any client or government employees. Cover must be bought, by
way of premium through an underlying insurer.

15. Does Sasria have shareholders?
Sasria has a sole shareholder which is the South African government.

16. Does Sasria charge an excess at the time of loss?
Sasria does not charge an excess at claims stage except in a case of Contract works claims.

17. Does Sasria provide car hire?
Sasria does not offer car hire cover.

18. Does Sasria cover Looting or any riot that occurs during lockdown or due to COVID-19?
Sasria cover remains unchanged even during this period of lockdown. Clients who have Sasria cover on their policies will still enjoy the normal Sasria cover for Perils defined on the policy wording.

19. Sasria cover excludes theft. What happens if a riot breaks out and goods or stock are looted
during the riot?
Looting is not a stand-alone Sasria peril and will only be covered, if it occurs during an active Sasria peril for which Sasria accepts liability.

20. To avoid Looting, can the client appoint security guards if they have unrest in their area?
Security cost cover for imminent danger can only be activated if there is an active Sasria peril within a 10km radius of the insured premises.

21. Due to the lockdown, Liquor businesses are being burgled and alcohol is stolen from the premises due to the lockdown non-alcohol sale. Please advise if this will be covered under Sasria.
Sasria does not cover loss or damage due to burglaries or theft, this should be referred to the underlying insurance company on cover. If you have any other information that suggests this incident may be Sasria-related, please liaise with the insurance company and they will follow the normal claims process. Sasria will treat such claims like any other Sasria claims by looking at the circumstances and merits to decide whether the claim is valid.

22. Does Sasria cover my business for loss of income during this COVID-19 epidemic or
lockdown?
The general rule dictates that the Sasria Business Interruption (BI) cover must always follow the material damage of the property listed in the policy schedule. Secondly, our BI cover is a standalone cover and does not follow the underlying policy. In our view this BI following a nonmaterial damage in the case COVID-19 or lockdown cannot be a claim in terms of Sasria.

23. Is it a Sasria rule that the Insured must prove that material damage caused to insured property, is related to riots, strikes etc?
Should the insured suffer damage or loss that they suspect could be Sasria related, a claim should be submitted through the right channels, even when not sure Sasria would cover it. This will give Sasria an opportunity to investigate fully and be in a position to make a proper decision on liability.

24. How will Sasria ensure you remain financially sound to continue to pay claims even if there is large outbreak in claims over the next year?
Sasria has a strong balance sheet and is well capitalised backed by a strong reinsurance programme. Sasria has also embarked, as it would behove any business in these uncertain times, to construct a sustainability and recovery plan due to the expected drop in premium.

25. Please clarify looting and when this will be a valid claim under Sasria?
Looting is not a stand-alone Sasria peril and will only be considered as a valid claim in terms of Sasria if it occurs during an active Sasria peril for which Sasria accepts liability.

26. Will Sasria look into offering cover or a product with regards to BI – infectious diseases in the future (as most insurers are busy excluding this as a general exclusion)?
The Saria Act limits Sasria cover to specific special risks and we are not licenced to cover infectious disease. This will require changing the act. It is also subject to finding adequate reinsurance to cover this risk and the reinsurance market is currently averse to offering this cover.

27. If a Sasria claim arises where a client has not abided to the national lockdown regulations – will the claim still be entertained?
Sasria cover follows but does not attach to underlying policies. Any exclusion pertaining to duty of care and or non-compliance to the law may be considered when the claim is being validated. However, each claim is treated based on its own unique circumstances and merit and therefore we are only able to determine the liability on investigation of the claim.