Insurance companies in South Africa must take steps to align their services with the new Consumer Protection Act.

"They should begin now by reconsidering their insurance contracts and advising their insureds to word indemnity terms or disclaimers so they are in line with the provisions of the act," said Amelia Costa, an associate at commercial law firm Deneys Reitz, in an interview with Business Day.

"Insurers should consider widening the net of their policy wordings on product liability for extended liability exposure on their insured," said Costa at a recent briefing in Johannesburg on the implications of the Consumer Protection Act .

On the supply of goods, she said, insurance companies should make their insured aware of the intended exposure faced for goods sold and delivered.

The new legislation is aimed at establishing a uniform national benchmark for improved standards of consumer protection and at promoting previously disadvantaged market participants' rights.

Although the act is expected to come into effect in October next year, insurers have the chance to redraft their agreements and to offer the required insurance to suppliers of goods and services .

Source: Business Day