Have you got the right cover to match your business growth?
Get into the habit of reviewing your insurance before you renew them, and adapting it throughout the year.
The start of 2020 saw plagues of extreme weather descend on Australia, with destructive hail, dust storms and flooding. These were preluded by bushfires which began earlier than usual, fuelled by drought and extreme heat.
The severe weather events are a reminder to business owners to review their insurance cover. Here’s what you should look at.
Work out whether your business is in an area that carries a risk of severe weather events, such as flooding, bushfires, cyclones, storms, droughts, earthquakes or even tsunamis. Local knowledge might not be enough to get you there, as extreme weather events typically occur years or even decades apart. Start by checking with your local council and the Bureau of Meteorology.
Work out the likely risk – for example, your business may be located on a flood plain, but how often have floods occurred in the past? Are there plans, for example new infrastructure or other developments, that might change the risk in the short or mid-term? Understanding what has happened in the past as well as what’s likely in the future is the key.
How might extreme weather damage your business? For example, flooding may cause water damage, damage to electrical appliances, stock damage, injuries to you or your workers, loss of profits and liability for ongoing expenses.
You also need to work out what steps you might have to take to recover your business, and what they’d cost. This can range from a new equipment or a shop fit-out to data recovery, finding new business partners and more. Develop an emergency plan so you know the steps to take to prepare for an emergency to help mitigate loss or damage. This should form part of your business continuity plan so that you are prepared both before disaster strikes and to assist your business to recover following the event.
Your policy type and its coverage will make a big difference to how quickly your business can recover after extreme weather. This means that you should be well covered to protect against all eventualities. In addition to the financial cost, you should consider additional assistance such as ‘make safe’ repairs and access to trades which will be critical to your recovery post the event.
As your broker, we’ll advise you on the local conditions and risks, and should be able to tailor your cover so it meets your needs where you feel comfortable on the cost/risk calculation. Don’t forget to consider issues such as removal of debris, which is an important first step in rebuilding and recovery, and could involve significant costs.
Your insurance investment will depend upon:
In case disaster strikes, know where your insurance documents are located. Keep copies off-site so if you lose everything in a flood or fire, you can still access the information. Alternatively, all business critical documents should be stored safely with backups stored off-site or in the cloud.
Understand what is covered. For example, storm damage may be covered but not flood damage.
When your policy is due for renewal, we can help you conduct a risk analysis of your business each year and ensure that your insurance policy provides adequate cover.
An extreme weather event can be traumatic for anyone, but when it affects a business, it can be devastating with ripple effects on the employees, the community and the local economy. Even though, by definition, extreme weather events are rare, they are becoming more and more prevalent and it pays to be protected – because what they lack in frequency, they more than make up for in ferocity.
Article supplied by OneAffiniti
Photo by Phillip Flores on Unsplash