Understanding “Territorial Limits” in Your Insurance Policy

Imagine this: your vehicle is damaged while being towed in Namibia, or a body corporate trustee travels to Mozambique for a business meeting, but takes along the BC laptop for the AGM prep and it gets stolen — only to discover later that their insurance claim has been declined because it happened outside the policy’s territorial limits.

It’s a frustrating (and costly) surprise that many policyholders could easily avoid, if they understood one small but important clause: Territorial Limits.

What Are Territorial Limits?

“Territorial limits” define the geographical area in which your insurance policy provides cover. If loss, damage, or liability occurs outside of that defined area, your insurer may not be obliged to pay the claim, even if it would normally be covered under your policy.

Think of it as the map of your insurance protection. Your policy only protects you within the borders it names.

A Typical Example

You might see something like this on your policy schedule:

“Territorial Limits: All the premises as stated in each section owned or occupied or used by the insured for the purposes of The Business and where applicable any premises owned or occupied by the named director(s) as private residence(s), all situated in the Republic of South Africa, Namibia, Botswana, Lesotho, Eswatini, Zimbabwe and Malawi.”

Here’s what this means:

• Your policy covers the property or premises listed in your schedule.

• These must be located within the named territories (for example, South Africa and certain neighbouring countries).

• Any property, activity, or incident occurring outside these areas may not be covered.

For Trustees, Managing Agents, and Scheme Owners

In sectional title or homeowners’ schemes, this clause applies to the buildings and common property insured under the body corporate or homeowners’ association policy.

If, for example, your scheme owns a caretaker’s unit or storage facility located outside South Africa, or if trustees travel abroad for scheme-related business, those activities might not be covered under the current policy.

Trustees and managing agents have a fiduciary duty to ensure that all insured assets fall within the policy’s territorial limits — and to discuss any exceptions with the broker.

For Business Owners

For businesses, territorial limits define where your business activities are covered. If your company provides services, delivers goods, or takes on projects beyond the listed territories, those operations might fall outside your policy’s protection.

Always confirm your cover before expanding operations or sending assets across borders.

For Homeowners and Personal Policyholders

Even in personal insurance, territorial limits apply. For instance:

• A household contents policy may only cover your belongings within South Africa.

• Your car insurance may exclude incidents that happen outside the listed countries unless you’ve arranged cross-border cover in advance.

If you’re moving, travelling, or storing items elsewhere, always double-check where your cover stops.

Why Territorial Limits Exist

Every country has different laws, risk factors, and insurance standards. By defining territorial limits, insurers can manage risk, ensure claims are handled under familiar legal systems, and keep premiums reasonable for everyone.

Your insurance policy doesn’t automatically follow you wherever you go, it protects you within defined borders.

Before assuming “I’m covered anywhere,” take a moment to ask your broker or insurer:

“Does my policy cover me in this country or location?”

That simple question could save you a costly lesson later.