How is a commercial Record of Advice different from a personal-lines one?

The FAIS requirement is identical — record the basis of the advice — but commercial cover spans many more sections (business interruption, liability, plant, stock), so the recommendation must be motivated per section rather than for the policy as a whole.

Does the ROA need to address business interruption specifically?

Yes. Business interruption is a common source of disputes on commercial advice, so the indemnity period and gross-profit basis should be recorded and agreed with the client explicitly.

Can Broker AI handle multi-section commercial schedules?

Yes — it extracts each section, its sum insured and settlement basis from the schedule and structures the ROA around them. You then check each section against the schedule before you finalise.

The client gave me the sums insured — is that on them?

Not entirely. The figures are the client’s, but the duty to explain what each figure must represent and what happens if it is understated is the adviser’s. Record the basis the client gave the figure on, and that the averaging consequence was explained.

Does a commercial renewal need a new Record of Advice?

A renewal that simply continues the same cover with the same insurer is not automatically a new advice event, but a commercial risk rarely stays the same. Where sums insured, sections or the business itself have moved — or the renewal goes to another insurer, which is a replacement — the file needs to show the advice was revisited.

Where does Sasria fit in a commercial ROA?

The Sasria coupon attaches to the underlying policy and carries its own limits, so it is a separate position to motivate rather than an assumed extension. Record what was offered, what the client took, and the limit.

/ CROAGUIDE

Commercial Record of Advice for South African brokers

A commercial Record of Advice carries more moving parts than a personal-lines one — multiple sections, business-interruption values, higher sums insured and a wider set of exclusions to motivate. The FAIS duty under section 9 of the General Code is identical; what changes is that a single policy-level motivation no longer covers it, because each section is a separate recommendation the client can be underinsured on independently. Here is what a defensible commercial ROA covers, section by section, and how Broker AI drafts one from the client’s schedule for you to review.

Updated 19 September 2026

What a commercial ROA has to motivate

The FAIS duty is the same as personal lines — record the basis of the advice — but commercial cover is broader, so the recommendation must speak to each section:

01The sections of cover recommended (buildings, contents, plant, stock, business interruption, liability, motor fleet) and why each fits the business.
02Sums insured and the basis of settlement (reinstatement, indemnity, first-loss) agreed with the client.
03The business-interruption indemnity period and gross-profit basis.
04Material exclusions, warranties and conditions the client must meet — and that they were disclosed.
05Average / underinsurance implications, explained per section.

Why "per section" is the whole difference

A personal-lines ROA can motivate the policy as a thing. A commercial one cannot, because the client can be adequately insured on buildings and 40 % underinsured on stock in the same document, and the average condition will apply to the stock claim alone. A motivation written at policy level is silent on exactly the section that fails. The practical test is the one a claim applies: take any single section, assume a partial loss on it, and ask whether the ROA explains what the client would receive and why that was the agreed position.

Sums insured are the client’s figures, and the ROA has to say so

On commercial risks the values almost always come from the client — stock at cost, plant at replacement, gross profit from the management accounts. That does not make them the client’s problem alone: the adviser’s duty is to explain what the figure has to represent, what happens if it is understated, and to record the basis on which it was given. The defensible form is "the client confirmed stock at R X, being average stock at cost, and was advised that the average condition applies at 100 %" — not a number in a box. Where a figure was supplied without a basis, say that too.

Business interruption: the section that is most often wrong

BI is a frequent source of disputes on commercial advice, and the problem is often the indemnity period rather than the sum. The period has to reflect how long this business would actually take to return to its pre-loss trading position — including lead times on plant, landlord reinstatement, re-licensing and customers who went elsewhere — not the twelve months that happen to be on the schedule. The Ma-Afrika judgment is the case brokers quote here: the SCA held that the 18-month indemnity period printed in the schedule applied, not the three months the insurer argued for. The ROA should record the recovery timeline the period was based on.

Warranties: recommended is not the same as achievable

Security, fire-protection, alarm-activation and record-keeping warranties are conditions precedent in many commercial wordings — breach them and the claim fails whatever the sum insured says. So the ROA has to record more than that the warranty exists: it has to record that the client was told what it requires in practice and confirmed they can meet it. A warranty disclosed but not discussed is the shape of a denied claim the client did not see coming.

Where commercial ROAs go wrong

Business interruption under-scoped

The indemnity period or gross-profit sum doesn’t match how long the business would actually take to recover — a common commercial gap.

Section-level averaging missed

Underinsurance on one section (e.g. stock) isn’t flagged because the ROA only speaks to the policy as a whole.

Warranties not motivated

Security, fire-protection or record-keeping warranties are recommended but the ROA doesn’t record that the client can meet them.

Sasria treated as automatic

The Sasria coupon attaches to the underlying policy and its limits are its own; a commercial ROA that never mentions the special-risk position leaves the client assuming cover they may not have.

Renewals are where the file drifts

A commercial risk changes between renewals more than a personal one: stock grows, plant is added, a second premises opens, turnover moves and with it the gross-profit figure. The ROA that was defensible at inception describes a business that no longer exists. And if the renewal moves the client to another insurer it is a replacement under the 2020 Code definitions, which brings section 9(1)(d) and its comparison requirement with it. The renewal conversation is an advice event, and the file should show one happened.

Draft a commercial ROA from the schedule

Upload the commercial policy wording and schedule and Broker AI extracts every section, sum insured and the business-interruption basis, then drafts a commercial Record of Advice you review and finalise — section by section. Built for South African brokers.

Start free trial

Frequently asked questions

How is a commercial Record of Advice different from a personal-lines one?: The FAIS requirement is identical — record the basis of the advice — but commercial cover spans many more sections (business interruption, liability, plant, stock), so the recommendation must be motivated per section rather than for the policy as a whole.
Does the ROA need to address business interruption specifically?: Yes. Business interruption is a common source of disputes on commercial advice, so the indemnity period and gross-profit basis should be recorded and agreed with the client explicitly.
Can Broker AI handle multi-section commercial schedules?: Yes — it extracts each section, its sum insured and settlement basis from the schedule and structures the ROA around them. You then check each section against the schedule before you finalise.
The client gave me the sums insured — is that on them?: Not entirely. The figures are the client’s, but the duty to explain what each figure must represent and what happens if it is understated is the adviser’s. Record the basis the client gave the figure on, and that the averaging consequence was explained.
Does a commercial renewal need a new Record of Advice?: A renewal that simply continues the same cover with the same insurer is not automatically a new advice event, but a commercial risk rarely stays the same. Where sums insured, sections or the business itself have moved — or the renewal goes to another insurer, which is a replacement — the file needs to show the advice was revisited.
Where does Sasria fit in a commercial ROA?: The Sasria coupon attaches to the underlying policy and carries its own limits, so it is a separate position to motivate rather than an assumed extension. Record what was offered, what the client took, and the limit.

This page is general information about FAIS record-keeping, not legal or compliance advice.