The bushfires currently raging in LA are a stark reminder of the risks that we also face in Australia. A wetter than average summer can lead to a higher risk of bushfires in the drier period due to the increased vegetation growth. In our recent blog, Disaster Preparedness For Businesses, we highlighted the measures you can take to prepare and deal with a natural disaster. But there are steps you can take now to ensure peace of mind that your business is well insured when the fire risk is high.
Bushfires can flare up at any time of year in Australia. While the dry season, which is usually Winter and Spring, is generally peak bushfire season in the Northern half of the country, in the Southern states, Summer and Autumn can pose the biggest threat. Australia’s hot, dry climate makes it one of the most bushfire-prone regions in the world. For businesses, this natural hazard poses significant risks, from property damage to prolonged operational disruptions. Taking out adequate insurance is not just a precaution; it’s a crucial investment in the resilience of your business.
Why Insurance Is Essential For Businesses With Bushfire Risk
Research shows that bushfire risks are rising across Australia, especially in coastal WA, central Queensland and in large parts of NSW, Victoria and the ACT. Bushfires can spread with little warning and can be unpredictable, with the potential to cause damage due to smoke or water as well as the fire itself. Even businesses outside of the fire zones can feel the impact of bushfires, with supply chain disruption affecting their ability to access goods and demand surge increasing the difficulty of accessing some services.
Bushfires can devastate businesses by causing:
- Property Damage: Direct destruction of buildings, equipment, and stock.
- Operational Disruptions: Forced closures and income loss during recovery.
- Safety Risks: Threats to employees and customers.
With bushfires becoming more frequent and severe, ensuring your business is prepared is vital.
Who Should Consider Business Insurance For Bushfires?
While you can’t control the weather, insurance can help to protect small businesses across Australia from the risks bushfires pose to both their premises and trading. Contrary to popular belief, bushfires are not just a threat facing rural businesses. Thanks to the urban sprawl of our cities, outer metropolitan suburbs are meeting the bush and increasing the risk to more businesses Australia-wide.
While all businesses should evaluate their risk exposure, bushfire insurance is particularly important for:
- Businesses in High-Risk Areas: Regions with dense vegetation, dry climates, and limited access to firefighting resources.
- Industries Reliant on Physical Assets: Businesses such as retail stores, warehouses, and farms that depend heavily on premises and stock.
- Rural and Remote Enterprises: Businesses located in rural areas where bushfires are more likely and response times may be slower.
Business Insurance For Natural Disasters
Having adequate business insurance can give you peace of mind that if a natural disaster, such as a bushfire, impacts your business, you are well positioned to recover more quickly.
The types of business insurance you should consider include:
Property Insurance
Property insurance covers damage to your business premises, equipment, and stock caused by fire.
- Mitigates repair or rebuilding costs.
- Ensures replacement of damaged assets.
Business Interruption Insurance
Business Interruption Insurance protects against income loss during and after a bushfire.
- Covers ongoing expenses like wages and rent while your business recovers.
- Provides funds to maintain cash flow until normal operations resume.
Contents Insurance
Ensures your business’s furniture, equipment, and other contents are covered.
- Replaces items damaged or destroyed by fire or smoke.
Motor Insurance
If your business relies on vehicles, commercial motor insurance is essential.
- Covers repair or replacement costs if vehicles are damaged by fire.
- Provides protection for company cars, delivery vans, or heavy machinery.
Liability Insurance
Liability insurance protects against claims if a bushfire originating on your property causes damage to neighbouring properties or injuries.
- Covers legal fees and compensation costs.
How to Choose the Right Insurance for Bushfire Risks
When evaluating your options, consider the following steps:
- Assess Your Risks: Use government fire maps to determine if your business is in a high-risk area.
- Evaluate Your Needs: Consider your property, stock, vehicles, and operational setup.
- Consult a Broker: Speak to an insurance broker who can tailor policies to your specific requirements.
- Check Policy Exclusions: Ensure your coverage explicitly includes bushfire damage and understand any conditions or limitations.
Business Pack Insurance can cover a number of these areas in one easy-to-manage policy.
Don’t wait until the threat of bushfires is higher, contact an AIB broker today for a review of your current policies. Contact us today for expert advice and tailored policies to protect your business against bushfires, motor vehicle damage and other natural hazards.
Important notice
This article is of a general nature only and does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. You should consider any relevant Target Market Determination and Product Disclosure Statement in deciding whether to buy or renew these types of insurance. Various insurers issue these types of insurance and cover can differ between insurers.
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Important notice – Steadfast Group Limited ABN 98 073 659 677
This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.
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