Insurance to Protect your Business - Don't Risk Being Under Insured.

By Peter Vickers Insurance Brokers | business insurance, fire season safety |

A longer, more severe bushfire season is expected this summer, and the Bureau of Meteorology (BOM) has warned Australian’s to be extra vigilant. But while bushfires are an ever increasing risk, it is only one of a host of fire risks for businesses.

Many Australian homeowners will ensure their home is protected from a fire but what about your business?

Fail to prepare, prepare to fail

While fire is standard cover in home insurance it is critically important to have it included in your business insurance package. It is important to review your policy and ensure that your business is properly covered in the event of a fire. Many Australian businesses are unprepared for the devastating impact and financial losses that can occur after a fire. Not only this, but business owners must be aware that the recovery process can take weeks, months or even years before operations return to pre-loss levels.

It is therefore important to ensure you are adequately prepared for a fire and your business is maintained to be fire safe.

Preparing for a fire

It is crucial that you are vigilant and well-prepared for an unforeseen emergency. Here are some of the ways in which you can prepare your business:

Make a plan

Take the time to sit and develop a fire evacuation and survival plan. It is important that all employees and family (if appropriate) are trained and understand what to do in the event of a fire. Practice the plan and evacuation drill, as many lives have been lost due to individuals being unprepared and evacuating at the last minute.

Mitigate fire risk

It is important to remember that often in your insurance policy there can be loss mitigation clauses. This means that if you haven’t taken the necessary precautions to protect your business you will not be eligible to claim should your business be affected by a fire.

Fire and Rescue NSW recommend this checklist to assist your small business in preventing damage that could be caused by fire:

Avoid storing or stockpiling flammable materials such as packaging materials or waste
Make sure all machinery is serviced as recommended by manufacturers and is kept clean. If possible, switch machinery off when the business is unattended.
Secure all doors, windows or other access points when the business is unattended, and make sure your business has adequate lighting to deter trespassers.
Ensure your business has an adequately serviced and functional fire alarm system eg: Remote serviced alarm systems, sprinkler systems, thermal or smoke alarms etc.
If your business stores dangerous goods, ensure their storage and use adheres to legislative requirements.

Business continuity

There are many ways that a fire can interrupt business operations and it is crucial for business owners to plan for the aftermath of a fire. Examples of business interruptions caused by a fire are:

Property could be damaged and this could mean your business will have to operate under an alternate building whilst the original is restored
An adjoining premises suffers a fire and you are not allowed to enter your building – restriction of access
Business owners and their staff could be impacted through smoke inhalation or even burns, and would be unable to return to work immediately
An often overlooked business interruption is the impact on data and documents for the business. It is important to not only ensure all your documentation is backed up electronically, but also these and any secure data you may have (such as customer data, product inventory etc) are also backed up to an offsite database or cloud. Business owners should not store their only records onsite

Remember purchasing additional fire insurance doesn’t automatically cover you for business interruption. It is important to speak to your insurance broker to ensure that the right insurance in place as a safety net should the worst happen.

Understanding your insurance cover

Once a fire has started it is too late to check your cover or insurance policy – wait periods are a crucial part of your policy. For some it might be up to 3 days after purchasing your policy before you are covered.

It is also important to constantly review whether your sum insured under the policy is accurate. As your business grows you may have new equipment or valuables that are left uninsured due to you not updating your policy.

“Inadequate insurance cover is often a problem in the event of fire damage,” Simon Pilbeam, Head of Peter Vickers Insurance Brokers explains. “Despite fires, floods and cyclones being an annual feature of life in Australia, many people are not financially protected, therefore it’s also important to have the right level of business interruption cover so the risk of the business failing because it can’t operate is reduced.”

In addition, insurance policies can contain wordings and language that have special meaning or can be hard to decipher by a non-insurance expert. Our specialist brokers work with business owners to ensure they are properly covered and continue to try and mitigate fire risk. If there is a claims event, our brokers have our client’s best interests at heart to help negotiate the best outcome for clients affected by a fire or other sever incident.

Don’t risk being underinsured

When reviewing the level of cover you may need, the first step is understanding your risks. Talking with your insurance broker can help keep peace of mind, as you will be consulting with an expert who can help you assess what insurance your business has, and what other covers you need to make sure you don’t risk being underinsured.

If you're a business that uses technology for everything from e-commerce through to point of sale, cyber insurance is also worth considering. Cybercrime is growing at an increasing rate in Australia and there are aspects of cyber that are not covered by standard business insurance. Here are the 5 reason’s SME’s should be considering cyber insurance.

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