Why smart brokers are mastering hospitality fire compliance

For brokers placing hospitality risks, SANS 10400-T is more than technical building regulations; it's the baseline for underwriting appetite and claims efficiency. However, a gap exists between the South African National Building Regulations compliance and insurer requirements, opening significant professional indemnity exposure for brokers.

False security of the occupancy certificate

Many clients (and brokers) assume a valid municipal certificate equals an insurable risk. It doesn't. While insurers still require hospitality businesses to hold correct occupancy certificates as a foundational requirement, they frequently conduct independent surveys and may pose requirements that exceed national and local bylaws. A guesthouse may pass an inspection but still receive additional risk requirements. Here are some important fire protection checks a business can conduct to ensure compliance.

· Water supply & reticulation

- Confirm water flows & pressure for hydrants, hose reels, sprinkler systems.

- Install fire tanks where municipal supply is inadequate.

- Keep water connections unobstructed and accessible.

· Fire doors & compartmentalisation

- Install fire-rated doors in escape routes and key areas.

- Check ratings (30–120 minutes) and self-closing mechanisms.

- Inspect regularly for damage or obstruction.

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· Hose Reels & Hydrants (SANS 10400-T)

- Install hose reels where required and test pressure and flow.

- Position hydrants within 90m of all areas, keep marked and clear.

- Conduct regular inspections to ensure they are not vandalised.

A critical issue brokers must consider is that poor maintenance, inadequate housekeeping, and operational changes can significantly alter the risk profile over time, rendering a once-compliant property non-compliant with insurer standards.

Historic buildings and the "legal non-conforming" problem

Historic properties often claim "legal non-conforming" status to avoid modern upgrades. While legally permissible, insurers price for actual risk, not regulatory exemptions. If you haven't documented fire-spread risks in these older structures, you are at risk. Brokers must document these gaps explicitly, particularly around inadequate fire separation, non-compliant escape routes, and combustible construction materials common in older buildings.

The professional indemnity exposure

When a total fire loss occurs, loss adjusters ask two questions:

1. Was the building compliant with SANS 10400-T and all other relevant industry regulations? This includes compliance with:

1. SANS 10400-T (Fire protection)

2. Occupational Health and Safety Act, 1993 (Act 85 of 1993)

3. National Building Regulations and Building Standards Act, 1977 (Act 103 of 1977)

4. Fire Brigade Services Act, 1987 (Act 99 of 1987)

5. SANS 10287 (Kitchen Fire Suppression Systems)

6. SANS 10105 (Portable Fire Extinguishers)

7. Disaster Management Act, 2002 (Act 57 of 2002)

8. Municipal fire safety bylaws

9. Tourism grading and licensing requirements (where applicable)

2. Did the broker verify this, and carefully explain the required risk improvements, were follow-ups conducted, and were the consequences of non-compliance clearly explained before binding?

In an environment where municipal oversight has deteriorated, the assumption that the certificate of occupancy meant it was compliant, won't protect a broker facing a negligence claim. The professional standard isn't whether the municipality approved it, it's whether a broker took steps to verify actual compliance or documented known deficiencies.

Insufficient file notes create vulnerability. Brokers should document professional fire safety assessments obtained (independent of municipal inspections), discussions about compliance gaps with the insured, recommendations for upgrades, and written acknowledgment when clients decline improvements.

For brokers, the ability to align SANS 10400-T with real-world operations is the cornerstone of defensible placements. It ensures that when the fire marshal or the lawyer arrives, your guidance withstands scrutiny.

Being there, beyond compliance

Quality hospitality insurance extends beyond policy wording to crisis response. Auto and General's recently upgraded hospitality insurance, offers FireAssist in selected areas. We cover the call-out fee and the cost of a private fire brigade service to contain fires and reduce the damage caused. This service is available in most metropolitan areas and can mean the difference between a contained incident and a total loss, particularly in areas where municipal fire services face resource constraints.

Diversifying

The hospitality sector represents one of South Africa's most underserved insurance segments, creating genuine opportunity for brokers willing to develop technical expertise. The South African hospitality industry market size was approximately R200 billion (at current exchange rates) in 2025, highlighting the substantial scale of opportunity available.

While many intermediaries shy away from hospitality placements due to perceived complexity, this hesitation has created market concentration, leaving thousands of guesthouses, boutique hotels, restaurants, and tourism operators inadequately served by generalist brokers.

For practices seeking sustainable growth beyond the commoditised personal lines and standard commercial portfolios, hospitality offers higher average premiums, stronger client retention (due to specialised knowledge barriers), and natural cross-selling into related risks.

Contact our commercial specialists at 0800 1000 11 to learn more about our upgraded hospitality solutions, or email our regional managers directly: julier@Auto and General.co.za or Keaganmi@tih.co.za.

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