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With the recent storms and power failures across the State, it is timely for all businesses to review their insurance cover.
Some of the questions to ask yourself (and your insurance company or broker) are:
- Am I covered for storm and flood?
- Do I have enough cover for my business including buildings?
- What does that cover include? Eg business interruption insurance, replacement of stock including perishables , reinstatement of premises/vehicles
- What does the business interruption component cover? (eg wages and/or loss of profits)
- In the event of a claim, how quickly will your company assist me get my business back up and running?
- What are the waiting periods/excess/exclusions?
- How long am I covered for if I make a claim for flood/storm damage for business interruption?
- Does that cover extend to all of my stock (not just the building)?
- Do I have business interruption cover?
- What do I need to cover if I am in rented premises?
These are just a few questions which should be asked. Take into account other types of natural disasters (or unnatural such as arson) which could affect your business. For example SA can be high risk in terms of bushfire damage.
It a is also timely to look at your disaster recovery and business continuity plans. Jot down a brief plan on how you would get your business back up and running if it was seriously damaged or wiped out by a natural disaster. For example: Have you got offsite backup for your debtors and creditors? Have you got or do you need external computer back up? Are there other premises you can operate from?
Cloud based accounting systems have removed many of these risks for small business as they do not rely on a physical presence of a server or IT storage in the business and can be accessed by the business owner from any location.
The power failures we have experienced in recent days prompt the questions for many business owners as to whether they should install their own back up generation. Such solutions should be fully researched and costed to ensure that in the event of power failure, your back-up does exactly that and allows you to continue to operate at the level for which the generation system has been designed.
Office of the Small Business Commissioner
Level 14, 19 Grenfell Street Adelaide, SA 5000 Australia