The Sunshine Coast has seen quite a lot of damage recently, with the onslaught of Cyclone Marcia causing road closures, class suspensions, flight cancellations, and business interruptions, including hospitals. In fact, during the storm, many of the hospitals in the Sunshine Coast had to cancel most of its outpatient appointments as a precaution.
Natural disasters like cyclones, earthquakes, and fires severely hamper business operations that may even prompt a shutdown of activities for days. These events affect the financial prospects of one’s business with days of lost productivity and sales. With roads, businesses, and most public and private services closed down during the onslaught of Cyclone Marcia, and with many business closures for a couple of days until the clean-ups have been completed, some companies might indeed have been thanking their run of luck or insight for having secured a business interruption insurance that would cover most damages (including loss of income) from the storm. For without a business continuity insurance, your business might be counting huge losses, instead.
This Year’s Biggest Risks for Business
According to Allianz Risk Barometer, business interruption once again held the biggest risk this year for most business owners, along with the disruption of the supply chain risk. According to Holger Schaeffer, General Manager of Allianz Global Corporate and Specialty Pacific, this year’s Risk Barometer found that businesses are spending a lot of time assessing the impact of interruption to their business due to catastrophic events, and the associated risks to their suppliers and customers. In Australia, the average business interruption insurance claim is higher at 32 per cent (with US$1.36 million) than the average direct property damage claim (with US$1.03 million).
Aside from natural catastrophes that lead to the interruption of business operations and the supply chain links, the Allianz Risk Barometer also revealed how Australian businesses also worry over a range of other setbacks, such as loss of reputation and brand integrity, intensified competition, talent shortage, aging workforce, market stagnation and fluctuations, changes in regulations, and credit availability. Cybercrime, meanwhile, dropped from the top ten after being tagged last year as the fourth biggest risk facing Australian businesses. The concern, however, is not a negligible one.
For three years in a row, business interruption was at the top of the list of the Allianz Risk Barometer, yet many businesses, it seems, still aren’t getting the picture. Fewer than 25 per cent of businesses are insured against business interruption (also known as business income or business continuity insurance, loss of profits insurance or consequential loss insurance), and those who aren’t covered are inevitably exposed and vulnerable to huge losses, and ultimately, business failure. To ensure that your business will not suffer as huge a loss as would often be expected in the wake a sudden weather event, talk to any reliable Sunshine Coast business continuity insurance broker from established companies like Insuring theProduct. This move can make the difference between survival and business discontinuity.
(Source: What will give Australian business owners sleepless nights in 2015?, Australian Anthill, January 26, 2015)