Why Personal Accident insurance?

“As the right of the injured to sue the wrongdoer has been removed by the RAF Act, the need for Passenger Liability insurance has effectively been obviated in South Africa, although we are advising our clients to retain their Passenger Liability insurance until such time as the Act has been constitutionally challenged" continues Des. "We recommend that travel and tourism stakeholders secure Personal Accident insurance in addition to the Passenger Liability insurance".

This is a very simple cover with a capital benefit or sum insured that will be paid in full following death. The cover is paid in terms of a sliding scale based on the severity of the injury in the case of permanent disablement. There is also medical costs insurance cover that is included to be used to cover such costs resulting from an accident.

One of the main differences between a Personal Accident insurance and a Passenger Liability insurance policy is that a Personal Accident policy will respond on a ‘no fault’ basis, which means that it will make payment to an injured passenger regardless of fault. A Passenger Liability policy will only make payment to the injured person where there is legally proven liability as a result of negligence on the part of the insured operator that resulted in injury to the vehicle passenger.

A typical example of this difference would be a situation where an insured operator with six guests in their vehicle is hit by a third party vehicle and two of the passengers are injured and one killed. The cause of the accident had nothing to do with the insured operators actions as the third party vehicle was completely at fault. With a Passenger Liability policy nothing would be paid to the injured or the deceased passenger’s family, as there was no fault on behalf of the insured. Likewise a legal action against the operator would not have been successful for the same reason. In the same situation, a Personal Accident policy would pay out in terms of the injured and deceased passengers, despite the fact that there was no fault by the insured.

‘PAXSure’ Personal Accident Policy

“Unlike a basic Personal Accident policy, which covers a named individual, SATIB’s ‘PAXSure’ Personal Accident policy attaches to the nominated vehicle and covers the unnamed passengers being transported in the insured vehicle on a per seat basis", says Des.

The sums insured against accidental death or permanent disability have been structured to be appropriate to the tourism industry with cover limits available at R500 000 and R1 million per seat with either R250 000 or R500 000 medical expense cover. Higher cover options at R2 million and R5 million per seat are also available on application.

Security is important in terms of the insurers ability to pay claims, especially in light of the current global economic recession. SATIB have placed PAXSure through an underwriting syndicate at Lloyd’s, which is rated A+ plus by the Standard & Poor’s international rating agency. Another benefit of the PAXSure product is that it covers all Africa territories south of the Equator, which means that insured operators who conduct tours in, for example, Botswana or Lesotho, can assure their clients that they have Personal Accident cover in place in addition to their Passenger Liability cover for these countries.

SATIB are advising the tourism industry in general to secure appropriate Personal Accident insurance cover immediately, so that they can show their clients and inbound agents that they do have an insurance cover in place that will provide compensation following a road accident in South Africa and to not cancel their Passenger Liability cover as in SATIB's opinion the RAF Act may be declared to be unconstitutional, thus allowing for common law claims. Therefore legal actions can still follow in the future for incidents that take place now under the current RAF legislation, for which Passenger Liability cover is still best suited to deal with.