How to prepare your small business for El Nino
After enduring three ultra-wet summers, Australia is in for some extreme weather of a different kind.
In September 2023, The Bureau of Meteorology declared the country was officially experiencing El Nino weather patterns. That occurs when Pacific Ocean temperatures rise, resulting in a shift in atmospheric circulation.
In Australia, that typically means hotter temperatures, reduced rainfall and increased fire danger. With it comes heightened risk for property and business owners.
Last time the country suffered through an El Nino phase was in 2019-2020 when the Black Summer Bushfires resulted in 39,000 insurance claims, totalling $2.32 billion, according to the Insurance Council of Australia (ICA).
With another big dry session upon us, there’s the potential for bushfires to affect both your business premises and your day-to-day operations.
Here are some measures that could help your business become more bushfire-resilient this summer.
“Last time the country suffered through an El Nino phase was in 2019-2020 when the Black Summer Bushfires resulted in 39,000 insurance claims, totalling $2.32 billion, according to the Insurance Council of Australia (ICA).”
Maintain your premises
Regular maintenance can help to make your building and its surroundings less flammable. Clean the gutters, clear leaf litter and other green waste from around the premises and ensure any combustible materials are safely stored.
Strengthen your defences
Depending on the Bushfire Attack Level (BAL) rating of your premises and your budget, you may consider investing in some building modifications. For example, installing fireproof shutters and fitting seals around doors and windows can help to slow the spread of fire and reduce the damage it can cause.
Plan for the worst
Even if your premises aren’t directly affected, being in a bushfire zone can disrupt your operations. That’s why it’s important to have a continuity plan that details the steps you’d take to maintain ‘business as usual’. Depending on the nature of your business, it might include identifying an alternative location, securing back-up suppliers in case yours are unable to deliver and ensuring your business information is backed up in the cloud so it’s accessible from anywhere.
Review your insurance
Insurance can help you recover, should your business be impacted by bushfire.
Understanding what your property policy covers is critical, according to the ICA. Current BAL ratings may mean a premises needs to be repaired or rebuilt to a higher standard. Building costs inflation may also see you having to spend more than you expected, to make good any fire damage. Obtaining a quote for a complete rebuild from a reputable builder can help you determine whether your current cover is adequate.
It’s also important to consider the ongoing expenses you’d have if your business ceased generating revenue for an extended period – think wages, supplier invoices and loan repayments. Business interruption insurance can help you get through the crisis by protecting your cash flow and helping your business keep running after a catastrophic event.
“Having appropriate insurance in place can help to mitigate the risk posed by extreme weather events, including bushfires.”
Cover for all conditions
Having appropriate insurance in place can help to mitigate the risk posed by extreme weather events, including bushfires.
If it’s been a while since you reviewed your cover, now is a great time to check whether your policies still meet your needs. For a conversation about your cover, contact your broker or adviser today.
How can farmers and primary producers help prepare for El Nino
Speak with your broker or adviser today
Reducing your insurance costs with rising costs can be tempting, but it’s a trap you should avoid.
It’s a more important time than ever to focus on the right protection. Speak with your broker or adviser today about your needs and whether you have the right cover.
Important notice – Steadfast Group Limited ABN 98 073 659 677
This general information 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 insurance broker or adviser as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. These insurances are issued by various insurers and can differ.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Please consider whether the information is appropriate to your circumstance before acting on it and, where appropriate, seek professional advice.