La Nina: 5 Ways to Prepare Your Business

It’s time to prepare! The Bureau of Meteorology predicts another La Nina weather pattern, so now’s the time to shore up your business for a wet spring and summer.

After the destructive floods of 2021 and 2022, business owners are understandably on edge, with many still recovering due to skills and supply shortages.

According to the Insurance Council of Australia, the insurance damage bill for the 2021 and 2022 storms and flooding is $5.92bn, with over 296,000 claims lodged.

However, don’t fret. There are steps you can take to prepare and mitigate the risks.

Here are five steps to prepare your business for La Nina:

Step 1:

Review your insurance program. Specifically, check your cover for:

• Building
• Contents
• business assets
• Stock/Inventory
• Flood
• Business interruption
• Loss of income

You can access the funds you need to maintain cash flow with the most appropriate cover. It will help cover ongoing fixed costs, temporary relocation, loss of income or allow you to continue trading.

Step 2:

Check that the replacement values for business inventory, buildings, plant, and other equipment are up-to-date and accurate.

Underinsurance is a widespread problem in Australia. Likewise, self-insurance can be incredibly high risk and costly for a business. With a suitable insurance program, you gain peace of mind.

If in doubt, talk to your insurance adviser, who can explain your policies and put you in touch with a suitable quantity surveyor for your industry. They will create an asset schedule for the business that helps you decide if you have enough insurance and accurate sums insured.

Step 3:

Keep a list of all business assets for easy reference at claim time. Your asset schedule is handy here, so keeping it close to hand is vital.

 

La Nina Case Study

In 2022 an Interior Design Business was affected by a La Nina flood event. Around 2 ft of water entered the building. The waters rose in a matter of hours, and the owner could not gain access until the water receded two days later.

It took one week for the owner and employees to clean up. They could not trade for one month while temporary premises were found and set up.

It took four months to complete the repairs before the business could return to the building.

The Outcome:

The client’s business interruption policy paid for:

• Staff wages during the business closure
• Cleaning equipment hire
• Rental costs for temporary premises
• Moving fees
• Advertising costs for the temporary changes
• Lost trading income

Step 4:

Beat the embargo! Did you know that insurers often place a stop on new policies and changes before predicted weather events?

Reviewing your insurance now is vital because once an embargo starts, you may be unable to increase your policy limits or secure cover.

“It’s better to look ahead and prepare than to look back and regret” – Jackie Joyner-Kersee.

Step 5:

Start preparing your property now. Clear out downpipes, stormwater drains and gutters to keep water flowing away from buildings and property.

Fix leaks and check that the roofing, windows and doors are fit to withstand heavy rainfall.

Decide what you can move to higher ground or remove from the premises.

It’s better to act now to reduce the risk of damage.

 

La Nina Case Study

In 2022, a large hospitality venue suffered significant water damage due to roof defects and maintenance issues. As a result, it caused wide-scope damage to the building and cost $150,000 to repair.

The cost to fix the roof was $11,500 and not covered by insurance.

The Outcome:

Although their Industrial Special Risks policy covered the repair costs, the large claim amount will impact their insurance program and premiums for the next five years.

Regular checks of the roof, guttering, flashing, seals and waterproofing membranes, for example, could have reduced or stopped the water damage.

 

How can Clear Insurance help you prepare for La Nina?

We use our extensive risk and insurance knowledge to help you navigate the full suite of insurance products. We guide you through the pros and cons of each to help you choose the most appropriate insurance solution for your needs.

Our risk discovery journey helps you streamline existing insurance programs, align renewal dates, and provides recommendations to address critical gaps in cover.

With our fee-for-service approach, you can feel confident that our fee is calculated based on the insurance services you receive rather than the policies themselves. It also helps reduce the taxes payable on your premiums.

Contact us today to see how we can help.