Do you know how to protect your business during extreme rainfall events? As if Australia hasn’t suffered from enough extreme weather events over the past few years, the BOM has just announced a negative Indian Ocean Dipole which means more wet weather is on its way. This will last for a few months at the very least, resulting in more rainfall over southern and eastern Australia during September and October.
It’s also likely that we’ll experience another La Nina event later this year, with climate models predicting that La Nina will return by early-to-mid spring. This will result in the wet conditions of the negative Indian Ocean Dipole combining with the wet conditions of La Nina. So, if you’re on the east or southern coast of Australia, the risk of storms and floods is going to last well into the second half of 2022.
Wet weather risks for businesses
The biggest wet weather risks to businesses are from floods or storms. However, you need to understand the differences between these two weather events because not everyone is covered for both.
Definition of a flood: Water that’s released, overflows or is from a dam, canal, reservoir, creek, river or lake.
Definition of a storm: a storm generates wind and “stormwater” or “rainwater” or “water run-off”. These items are usually covered by property insurance policies. The specific definitions of these terms vary depending on the policy, so it is important to make sure you’re aware of what you’re specifically covered for. If you’re confused about your cover, consult an insurance adviser to clarify your risks and insurance cover.
So, if the local creek overflows and floods your warehouse during a storm, this would be flood water and usually not be insured, unless your insurer has agreed to add flood cover to your insurance, and you have paid an additional premium. Following the extensive flooding over recent months, some insurers will no longer offer flood cover in some areas. Another example would be heavy rain pooling at the end of the street because the drains cannot handle the volume of water. This is storm water and is covered under a property insurance. This means that to protect your business, you need to know the difference between Flood and Storm damage and the risks of these happening in your area to ensure that you have the right cover in place. An insurance adviser can help you assess these risks and provide you with recommendations regarding what types of cover you need.
Preparing for floods and storms
Sometimes floods and storms appear with little warning, and you have limited time to protect your business. However, the BOM has already alerted Australian’s that these weather events will occur, and that the eastern and southern states will likely experience more wet weather during spring and summer. So, reviewing your weather-related risks and managing these is important for your business, as well as employees and customers. Secondly, you need to have a plan that can be put into action, if faced with clean up and damage.
Wind, thunderstorm, and flood preparation
These are common-sense strategies that help to protect your business, as well as your employees and customers. For example, do you know what the main weather risks are in your area? Have you checked whether your buildings are in a storm or flood prone area and have a plan to move stock, plant and machinery from flood waters?
There are a number of state government websites with checklists or specific information for your area. Insurers also provide risk management advice like this from Zurich Insurance.
Of course, there’s the usual preparations for storm season, such as getting a builder to check that the roof, windows and doors are able to handle storms in your area. Also clearing out gutters, as well as trimming trees that are too close to buildings.
Emergency plans – basics
If an extreme weather event is imminent, you need an up-to-date emergency plan, also ensure that you have discussed this with your employees, and they understand their roles.
The plan should include monitoring the radio, rehearsing responses with staff and having emergency plans and kits at hand.
Reviewing your risks and insurance cover for extreme weather
Preparing for extreme weather includes having the right insurance cover in place to help protect your property and assets and recover if the worst does happen. As more wet weather, floods and storms are expected over the coming months, it’s sensible to check that your policies cover all your wet weather risks. You also need to ensure that you have all the insurance cover you need to get back on your feet when everything settles down.
Find your local adviser to discuss your risks and insurance cover, they will be able to provide valuable insights and information that can help to minimise your financial risks. They can also advise about Business Interruption Insurance and discuss the type of coverage available for storm and flood damage.
This communication including any weblinks or attachments is for information purposes only. It is not a recommendation or opinion, your personal or individual objectives, financial situation or needs have not been taken into account. This communication is not intended to constitute personal advice. This type of insurance product is designed for small and large businesses, that want to be covered against financial loss relating to accidents or personal injury involving contractors or sub-contractors.
We strongly recommend that you consider the suitability of this information, in respect of your objectives, financial situation and needs before acting on it. This document is also not a Product Disclosure Statement (PDS) or a policy wording, nor is it a summary of a particular product’s features or terms of any insurance product. If you are interested in discussing this information or acquiring an insurance product, you should contact your insurance adviser to obtain and carefully consider any relevant PDS or policy wording before deciding whether to purchase any insurance product.