Extreme weather events or natural disasters are a fact of life for Australian businesses all over the country. Either bushfires, cyclones, storms or heavy hail can affect many areas, causing threats to safety, damage to property and interruptions to transport, communications and business activities. It only makes sense to be prepared. Here’s our guidelines to some of the key essentials.
Know your risks and gain adequate protection
1. Knowing the history and predictions of extreme weather events or natural disasters in your area helps you understand the risk of threat to your location.
Local councils and emergency management authorities are useful resources for records of past occurrences and can also provide local plans and recommendations for defending against these threats, as well as future warnings.
Use this information to ascertain what types of insurance protection you will need for your business and whether you are compliant with current safety requirements and recommendations.
2. Assess the vulnerability of your business property and assets — including off site buildings, vehicles, products/stock and supplies and equipment. Consider the materials, condition and other factors such as storage of flammable goods and proximity to other property or perils (a river, for example).
What safety measures do you have in place and are they compliant with requirements and adequate to protect your premises?
Forecast the potential impacts if an event was to occur: the disruption or interruption to your business and the cost of potential losses if your property and/or assets and stock were destroyed or severely damaged by fire or flood, or if access is prevented by road closures and similar events beyond your control.
3. A key learning from many impacted by property damage is not to underestimate replacement costs, so consider getting a quote from a reputable builder for rebuilding your business premises at today’s rates. Your insurance should cover a worst case scenario.
Keep inventory of assets and documents to support any potential claims
If an event does impact your business it’s very helpful to your case to have solid records of your pre-event assets, buildings and valuables to be considered in a claim situation. A claim passes through multiple experts’ scrutiny and the process can be protracted. It’s important to supply as much information and documentation to support your claim as you can.
Along with checking you have the relevant documentation that your insurer needs it’s useful to have up to date inventory of plant and equipment, including vehicles, with records of what you paid for them if possible, recent stocktakes if applicable, photos of the assets, and other relevant information about your business operations stored somewhere off the premises, in an alternative physical location or digitally, in the Cloud, for example.
Check that you’re properly covered
Doing this groundwork provides essential information about the insurance cover you need to protect your business. An insurance broker who knows your business and industry sector can help with identifying any gaps in cover so it’s advisable to take a consultative approach.
Review your insurance before it’s an emergency or too late ‒ don’t leave arranging insurance until the threat is imminent as many insurers place stand down periods on new policies so you may find insurance won’t be available then.
If your business is impacted, here is short summary to support you in the claims process.
Notify your broker as soon as possible, delaying making contact for a potential claim may cause gaps later in the process.
As soon as practicable, photograph or video any damaged plant or equipment, showing the nature and extent of losses or damage, first of the exterior and other buildings on your property, then the interior and contents. Make a detailed list of plant and equipment that captures all your damaged assets. We recommend against disposing of damaged items.
Save all purchase orders, work orders, invoices, time sheets, service contracts or material requisitions for remediating or replacing your business’s property of any kind.
Keep a daily diary to record all the facts and events that have a bearing on your claim and the time that your employees spend on claim-related work also record all lost opportunities or cancelled contracts that support your claim for loss of revenue or reduction in turnover.
We're here to help
Your insurance broker can help you review your business insurance to ensure you have adequate coverage and please get in touch if you need any support.
Official contacts for help in an emergency or disaster situation
SES assistance in floods and storms: 132 500
Police attendance: 131 444 (all states except Victoria)
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient’s industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers’ control.
Insurance brokerage and related services to be provided by Arthur J. Gallagher & Co (Aus) Limited (ABN 34 005 543 920). Australian Financial Services License (AFSL) No. 238312