The Impact of Severe Weather Conditions on your Business 

Markey storm damageThis year the Hunter region experienced the most severe weather conditions it has seen since 2007.  The damage and overall effect on businesses was varied and wide spread.

Unfortunately, we cannot control the frequency or severity of such events but they do serve as a reminder to review disaster recovery, contingency and risk management plans within the business.

It is important to also remember that these plans are not ‘set and forget’ and should be reviewed regularly to ensure that they remain relevant and effective.

‘Risk’ is something that all businesses face, and it is important to identify, rate and quantify risk so that adequate plans are in place to deal with it.

Also bear in mind that your insurance policy is one of the most important contracts you enter into and it therefore should work for you (not against you) when a major event occurs.

Business Interruption Insurance

Business interruption insurance covers the resultant loss of business gross profit following an insured event such as storm.  In most cases the loss will be due to damage at the Insured premises but there are other circumstances such as power outages, or damage to the premises of your supplier or
customer which may also affect your business income.  Most businesses require this type of cover and it pays to discuss this risk with your insurance advisors.

Disaster Recovery Plan

We seem to live in a World of natural disasters and sooner or later we could be caught up in one.  A single event to a business is different to a widespread natural disaster that affects a large number of people and businesses.  In the latter, resources are stretched to the limit and it is difficult to source supplies and repairers in a timely manner.  A Disaster Recovery Plan should address these issues as well as identifying strategies which will help the business survive a disaster.

Seek Insurance Advice Early

If you are affected by a major loss, the key is to advise your insurance advisors and initiate your disaster recovery plan asap.  Your insurance
advisors may elect to appoint a loss management consultant to work with you from the outset to ensure that not only are your policy entitlements maximised, but your business recovers as quickly as possible.  The costs of such a consultant may be covered by your insurance policies.

Review your insurance regularly, paying particular attention to sums insured

Insurance is all about protection not price.  It is more important to have the right cover and the correct levels of cover than to pay the cheapest premium you can find.  It is also worth knowing what the insurance does NOT cover.  For example, FLOOD is not a standard cover in all insurance policies.  It is advisable to revisit your insurance coverage at least once a year, or more often if there are changes to the business such as – moving to another premises, a merger with another business, winning a new major contract, a change in business activities.

Business owners:  do not delegate important insurance decisions to employees…always keep in touch with your insurance coverage.

Your Insurance Advisor is Important to your business

Your insurance advisor is just as important to your business as your accountant and lawyer.  Tell them everything!  It is their job to ascertain what types of information needs to be disclosed to Insurers.

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Cathy Thompson, Senior Account Manager, Markey InsuranceMarkey Logo
P:  (02) 4925 6521