However, with careful planning and risk mitigation, you can keep your business moving forward and reduce the risk of a claim.

So, here are six things to check to ensure your business is summer-ready:

1. Building Maintenance

Check your maintenance programs are up to date and that any outstanding jobs are complete. Some of the jobs may include:

• Roofing: replace broken tiles and fix holes to prevent leaks.
• Gutters: remove debris to reduce overflow and fire risk.
• Trees: prune back trees to minimise storm damage.
• Shade Cover: ensure any shade cover is robust enough to withstand wild weather.
• Stock: protect any stock stored outside or in outbuildings from the weather.

2. Power Outage Plans

A power outage or surge is possible, whether it’s hot weather or a storm. Therefore, it’s prudent to check that:

• Equipment is working and protected.
• Equipment can be quickly relocated or sourced if required.
• Generators or other backup power sources are working and ready to run when needed.

3. Business Continuity Plans

It’s advisable to have a plan to tackle operational issues caused by severe weather events. Be it a flood, fire or storm damage, staff, customers, and suppliers must be kept safe and informed.

Check that essential data and documentation are backed-up and always easily accessible should the premises be impacted by a fire, flood or other event that disrupts your usual operations.

4. Staff Training

Now is an excellent time to explain the continuity plans to your team so they know what to do should the business be impacted by an extreme weather event or other business interruption event.

Whether it’s how to direct customers, remain safe or details of interim working arrangements, your team must know what to do in a crisis.

5. Check Insurance Cover

Check-in with your insurance adviser and review your business interruption cover. After all, it can be a lifeline for your business. Business Interruption cover can provide financial support to cover the loss of revenue and help with the expenses needed to get you back on your feet. Whether you have made no improvements to your premises or undertaken renovations, keeping your adviser and insurer up to date is essential.

6. Seek Professional Risk & Insurance Advice

Your insurance adviser can advise on continuity plans and risk mitigation, and ensure your business remains adequately covered during business interruptions. If you need help, contact Clear Insurance on 1300 721 132 or email info@clearinsurance.com.au.

The floods resulted in 240,000 claims, totalling $5.81 billion, making it Australia’s costliest weather event yet. Whatsmore, according to a report by global reinsurer MunichRe, it was the second costliest insured event in the world that year.

With more than 83% of claims now closed, insurers agree it is timely to have a review.

Image source: www.scu.edu.au

The Independent Review into the 2022 floods

The ICA has appointed leading consultancy and accounting firm Deloitte to carry out the review.

The purpose of the review is to examine the lessons learned from the insurers’ response to the floods. Importantly, it aims to identify best practice to help insurers better prepare and respond to future extreme weather events.

The review will look at insurers’:

• Response timeframes
• Resources deployed
• Claims handling
• Complaints handling
• Communication with policy holders
• Engagement with stakeholders

Image source: www.domain.com.au

Additionally, the review will examine the:

• Impact of regulatory requirements
• Insurer’s interactions with government agencies
• Broader external pressures such as supply chain and labour constraints

Deloitte will use insurers’ claims and complaints data and include a consultation process to gather the views of a broad range of stakeholders, including representative groups of affected policy holders.

The final report and its recommendations are expected later this year.

You can read more about the review in articles on the Insurance Council of Australia and Insurance Business News websites.

Image source: The Courier Mail

Insurance Advice

If you would like advice on flood insurance and how best to manage business risk for extreme weather events talk to a Clear Insurance adviser today.

Our risk and insurance experts help business leaders identify, understand and manage business risk, including flood risk. Our risk and insurance review assesses your current insurance cover and provides the advice you need to move forward confidently.

We work with you and our insurer partners to ensure you have the most appropriate insurance solutions for your business needs, regardless of complexity.

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.

Another wet spring and summer is on the horizon. Image source abc.net.au

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.

Businesses of all sizes are on the long road to recovery following Queensland’s intense February rainfall. However, the ongoing impact on business operations and the supply chain extends beyond those directly affected.

So, while we support the reinsurance pool, we hope it includes more businesses across Australia.

What is the reinsurance pool?

The reinsurance pool is a pot of money to help cover the cost of a cyclone and flood-related damage to homes and businesses located in Northern Australia. It includes wind, rain, rainwater, rainwater run-off, storm surge and riverine flood damage caused during, and up to 48 hours after, a cyclone weather event.

Importantly, it seeks to make the cost of renewing home and business insurance premiums for cyclone and flood-affected areas affordable for more home and business owners.

To explain, insurers can confidently finance claims thanks to the Government and insurer funded pot of money. So, a small business owner with medium to high cyclone risk can gain some relief on the insurance premium price rise after a claim for cyclone or related flood damage.

The reinsurance pool will have an annual $10 billion Commonwealth guarantee. Over ten years, it expects to reduce insurance premiums by up to $2.9 billion across the eligible household, strata, and small business policies.

The reinsurance pool will help many flood effected businesses. Image credit: theguardian.com

So, what does the reinsurance pool mean for you?

The Government expects over 880,000 eligible residential, strata, and small business property insurance policies in northern Australia will benefit from the reinsurance fund.

It’s welcome news for business owners struggling with the high costs of insurance premiums and brings financial relief for our underwriter and insurer networks.

With an active reinsurance pool to reduce premium costs for medium to high-risk cyclone exposure, we expect insurer appetite to increase. Thus, helping more business owners protect their business and livelihood.

What types of policies and property types will it cover?

The pool will cover household, residential strata and small business property policies, including:

• residential home and contents, including landlord insurance and residential farm cover
• commercial property policies with less than $5 million total sums insured across risks covered by the pool. For example, property, contents, and business interruption; and
• residential strata. Including mixed-use strata schemes, where 80 per cent or more of floor space is used mainly for residential purposes.

The Government has said that the reinsurance pool will include coverage for small business marine property insurance policies from 1 July 2023.

Futureproofing

General insurers with eligible policies have to participate. Further, those insurers pay reinsurance premiums into the pool that reflect the expected insurance claims and the pool’s operating costs.

Such plans highlight how critical it is for you to give the correct information to insurers. Crucially, when you provide insurers with details of all business activities and likely claims, insurers can accurately underwrite the risk.

It is worth noting that the Government’s proposal includes incentives to encourage risk reduction. Specifically, discounts for properties that take steps to mitigate cyclone damage.

What can you do to prepare?

Book a risk discovery review with a Clear Adviser. We will help you understand the risks for your business and location. We’ll guide you through the options to reduce risk and help secure the most appropriate insurance program for your business.

With Clear Insurance’s fee-for-service approach, you can feel confident that all advice is in your best business interests and not swayed by insurer commissions.

If you would like to discuss your insurance program with an experienced adviser, you can contact Clear Insurance on 1300 721 132 or complete our online enquiry form.

Help for a flood affected business with insurance

Firstly, it’s essential that you contact your Clear Insurance adviser or insurer as soon as possible to commence your claim.

There are steps you should take to assist the process, which include:

• capturing footage and photos of the damage
• gathering evidence of ownership where you can
• write a list of all the damaged property and stock, including quantities
• document the clean-up process

While this can be challenging at such a fraught time, it will assist your adviser and insurer in moving your claim forward.

Image credit: 9news.com.au

Help for an insured and uninsured flood affected business

It’s a relief to know insured and uninsured business owners can access a range of services for financial and emotional support.

Help for flood affected businesses in Queensland includes:

Small Business Disaster Hub

The small business disaster hub offers resources, including a natural disaster checklist to help your business respond and recover. The resources include advice on a range of topics such as:

• help with insurance and tips for cleaning up.
• re-establishing your premises and business records
• assessing your finances
• managing and paying staff
• communicating with key people

Image credit: fidelitycharitable.org

Financial Assistance

It’s good to know there are government grants available to eligible businesses. They include:

• Personal Hardship Financial Assistance
• Emergency Hardship Assistance Grants
• Essential Household Contents Grant
• Australian Government Disaster Recovery Payment
• Disaster Recovery Allowance (Australian Government)

Legal Aid Queensland

For legal assistance you can contact the Legal Aid Natural Disaster Legal Helpline on 1300 527 700. The service provides help and advice on the legal issues you may face due to severe weather or flood damage to your property.

Mental health support

There is a range of mental health and wellbeing resources for business owners. They include tips, advice and support.

Beyond Blue offers a free, confidential mental health coaching support program for small business owners and sole traders called New Access for Small Business Owners.

Small business financial counsellors

Small businesses suffering from hardship can contact the Small Business Financial Counselling Program.

Southern Queensland – www.rfcssq.org.au or call 1300 732 777

North Queensland – www.rfcsnq.com.au or call 07 4652 5669

Queensland Tourism Business Financial Counselling Service

Tourism operators can access free financial counselling support at the Queensland Tourism Business Financial Counselling Service.

Natural Disaster Business Survey

The Department of Employment, Small Business and Training survey will build a picture of the help businesses need to recover. It focuses on South-East Queensland, Maryborough, the Fraser Coast and Toowoomba.

Queensland Small Business Commissioner

Small businesses can access support from the Office of the Queensland Small Business Commissioner. The service helps with advocacy and dispute resolution through mediation.

Fair Work Australia

Fair Work Australia has resources to help business owners understand employee entitlements during natural disasters.

Need advice on your flood affected business?

Clear Insurance is ready to help. We can provide support to all existing and new clients and guide you through the flood claims and risk assessment process.

If you would like to discuss your insurance program with an experienced adviser, you can contact Clear Insurance on 1300 721 132 or complete our online enquiry form.

9. Natural Disasters: 2019-2020 Bushfire Season

• Death toll: 120
• Damage costs: $18.6m
• 300 homes destroyed
• 1.5m hectares of public and private land burned

During the Australian summer of 2019-20, fires burned across more than 24 million hectares of southern Australia. This natural disaster was named the Black Summer. It started after lightning ignited a series of fires in East Gippsland, affecting local communities. As the storms increased emergency crews were swamped with calls for help due to fallen trees and building damage. Over 130,000 homes were without power.

150 fires were burning across Victoria and by the end of the day 60 fires remained alight. The fires continued to spread across the region over the coming days and months. The fire caused 120 deaths and 1,317 hospitalisations. It affected critical animal habitats and water catchments.

The Australia Council of Australia estimate the bushfires in Victoria generated 3,050 insurance claims with insured losses of about $18.6m.

10. Natural Disasters: Cyclone Yasi

• Death toll: 1
• Damage costs: $1,412m

Tropical Cyclone Yasi formed in Fiji and as it moved towards the Queensland coast it intensified to severe tropical cyclone status. It brought destructive winds of up to 285 km per hour and 200-300mm of rain in 24 hours. The cyclone affected areas from Mission Beach to Mount Isa, Cairns and Townsville.

The Australian government estimate the cyclone led to $300m loss in agricultural production, with the banana and sugarcane sectors most affected. Over $250 million grants were processed to aid the recovery. The Insurance Council of Australia estimates the damage cost $1,412m.

Transferring Risk for Natural Disasters

Sadly, natural disasters are unavoidable and will continue until the end of time. However, we can prepare and take steps to protect our loved ones and businesses.

We are here to help.

If you would like to discuss your insurance program with an experienced adviser, you can contact Clear Insurance on 1300 721 132 or complete our online enquiry form.

Wind speeds of 141 km/h (88mph) were recorded with multiple reports of large destructive hail in the city and the surrounding suburbs.

Supercell storm approaching Brisbane city during peak hour.

What caused this destructive storm?

What seemed like a typical muggy summers day in Queensland quickly changed, as warm humid air over South East Queensland was hit by a cooler southerly change causing instability. Multiple cells formed near the New South Wales border and tracked northwards, with one storm intensifying into a strong supercell. While supercell storms are not uncommon for Queensland, it was rare for one to strike the central parts of Brisbane.

The storm continued to track north, threatening suburbs in the Moreton Bay region. It passed near Redcliffe and North Lakes around 30 to 40 minutes after impacting the city, before finally shifting out to sea not long before dusk.

Supercell storm causes flash flooding in Brisbane CBD.

The Aftermath

To make matters worse, the supercell storm struck Brisbane during peak hour. Although the storm was of short duration (lasting just half an hour), it didn’t lack in destruction. Reports of giant hail were widespread throughout the city. A senior forecaster at the Bureau of Meteorology described the storm as the worst in a decade. More than 100,000 homes lost power supply, 642 power-lines were brought down, around 2,000 homes experienced roof damaged caused by hail and 39 people were injured with 12 treated at hospitals. A number of planes were flipped at Archerfield Airport, and more than 12 schools were closed following the storm. Brisbane City Council and State Government buildings suffered $50 million worth of damage.

It was estimated that the short storm caused $1.1 billion worth of damage. Many drivers were caught unaware and unable to escape the hail. According to the Insurance Council of Australia 100,000 insurance claims were lodged with almost two thirds for vehicles. It was believed that hail-damaged cars were undergoing repairs 18 months after the supercell hit!

Record hail stones hit catch Brisbane residents off guard.

The aftermath of Brisbane’s supercell.

The estimated insurance recovery bill is over $1 billion

[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

The year 2020 will be a hard one to forget. Not only did we endure a global pandemic, but our country was also victim to a spate of natural catastrophes that rocked Australia to its core.

After healing from the bushfires, the eastern coast of Australia was hammered with small to mid-size hailstorms classed as ‘secondary perils’ (in the world of reinsurance when a storm is not as significant as a cyclone it falls into a ‘secondary peril’ category). Whilst these secondary perils aren’t as big, they still pack a punch.

One such secondary peril was the Rockhampton Hailstorm which hit the east coast on 19 April 2020. Whilst Rockhampton residents aren’t strangers to wild storms, this particular event left a trail of significant and widespread damage to commercial and residential properties.

Social media was inundated with videos and photos of hailstones as big as 10cm in diameter. The frequency of hail events with hailstones greater than 9cm has increased over the decades. Up until the 2000s, only 1% of hailstorm events were recorded at 9cms or greater. From 2010 to 2019, this had increased to 3% of events.

However, it’s not just the size of hailstones that are increasing.

Unsurprisingly the frequency of hailstorms has also been on the rise. Hailstorms now make up 12% of all declared natural catastrophes in the last decade in Australia, compared to 4% from 1981 to 1990.

The size of hailstones that smashed through parts of Rockhampton.

Hailstorm Stats

Not only was the town of Rockhampton caught off guard by the hailstorm, but also the insurance industry. Some interesting statistics include:

• Solar panels:
  • The extensive use of solar panels in the region has likely contributed to the increase in average claims size. Assessment, repair and replacement of damaged solar panels is complicated with very little governance in the industry on best practice.
• Property age, roof repairs & building codes:
  • 61% of homes in Rockhampton were built pre 1980
  • The age of properties led to challenging roof repairs requiring tie-downs and roof frame upgrades
  • 92% of roofs in Rockhampton were metal sheeting, which usually requires whole sheet/roof replacements.
  • Tiled roofs by comparison are more straight forward requiring specific tile replacement
  • Cyclone building codes by the LQD building Construction Committee, require total roof replacement if damage to roof is greater than 20%
• Claims farming/Disaster chasers:
  • A significant number of consultants were reported in the area, soliciting for work with reports of misrepresentations to consumers. The impact of these activities was seen in the higher portion of late claim notifications that kept occurring months after the date of loss.

Whilst the event caught the industry off guard, the most important thing was to ensure the industry was there to help the communities get on with the rebuild of the Rockhampton area. The focus shifted to what lessons from the event in order to be better placed and prepared for the next one.

You can read the full article “Rockampton Hail – A Cautionary Tail by Swiss Re.

If you’d like to discuss your insurance program or request a risk and insurance review, contact the Clear Insurance team on 1300 721 132, email info@clearinsurance.com.au or complete our online enquiry form and an adviser will be in touch.

“The new agency will help communities rebuild and recover from natural disasters, helping many Australians in their greatest time of need, while strengthening our defences against future major disasters,” Prime Minister Scott Morrison said today.

“Immediate funding will support resilience projects across the community and for individuals’ homes, such as bushfire and cyclone proofing houses, building levees and improving the resilience of telecommunications and essential supplies.”

About the National Recovery & Resilience Agency

The agency will be led by Coordinator-General Shane Stone and bring together the former National Drought and North Queensland Flood Response and Recovery Agency and the National Bushfire Recovery Agency, including the $2 billion National Bushfire Recovery Fund.

The agency will also take responsibility for supporting the long-term recovery of communities rebuilding after recent storms and floods in NSW and Queensland and cyclones in WA.

“Insurers have been calling for some time for this scale of investment, and it’s pleasing to see the Morrison Government has heard these calls with this action,” Insurance Council of Australia CEO Andrew Hall said. “We look forward to seeing the details of these projects in the Federal Budget next week.”

The Government also announced $4.5 million to support disaster recovery scenario training to help regional communities prepare for high-risk assets.

A coordinated approach

IAG says today’s announcements are a positive step in ensuring the nation has a co-ordinated approach to disaster management and targeted investment in mitigation projects for vulnerable communities.

Insurers yesterday highlighted the importance of increased mitigation spending, while welcoming the Government’s $10 billion guarantee for a new cyclone-targeted reinsurance pool aimed at reducing premiums in Australia’s north.

The Australian Reinsurance Pool Corporation (ARPC), formed to cover terrorism events, will take on cyclone risk from July next year, with details to be hammered out by a Treasury-led taskforce.

“With deep experience running a Government-backed reinsurance pool, ARPC is well positioned to engage with stakeholders in development of the new scheme,” it said.

Defining the risks

National Insurance Brokers Association (NIBA) CEO Dallas Booth says pricing structures and fundamental issues around the nature and location of the risks to be covered must be decided and it’s still to be clarified how the guarantee will flow through to provide real benefits for policyholders.

“We will be doing what we can to support the process and to work with Treasury and the ICA to achieve a good result for policyholders in Queensland in particular and northern Australia more broadly,” he told insuranceNEWS.com.au today.

“The pricing has to reflect the risk to a large degree, but it also has to be reasonably manageable in terms of the circumstances of the community, so that is what brokers are looking for, and what NIBA will be working to try and ensure this initiative produces.”

Assistant Treasurer Michael Sukkar says the pool will cover cyclone and related flood damage north of the Tropic of Capricorn, extending across Queensland, NT and WA.

Allianz Chief Corporate Affairs Officer Nicholas Scofield says a cyclone pool, long supported by the insurer, will be very different from a terrorism pool, which covers low frequency, high impact events.

Other matters to consider

Matters to be considered for the new government-backed model include cover wordings and retention levels for insurers, he says.

“At the high level, it is obviously very much consistent with the mechanism we have been advocating for, but there is an enormous amount to be done in designing exactly how it will work,” he said.

Mr Scofield says having legislative processes and the design phases well advanced in the December half could be important for insurers looking at reinsurance program renewals for next calendar year.

Strata Community Association (SCA) is also seeking a seat at the table as the Treasury-led taskforce thrashes out the pool details.

“Hopefully what it will do is bring more capacity and competition into the northern Australian market,” SCA President Andrew Chambers told insuranceNEWS.com.au.

“Our members are working with these issues, day in day out, so we certainly have a lot of data and information that we can contribute.”

If you would like to discuss your insurance program with an experienced adviser, contact Clear Insurance on 1300 721 132 or complete our online enquiry form and an adviser will be in touch.