Over the past months the COVID-19 pandemic has had a significant effect on Australian business. Small and medium sized business has been hardest hit, as have specific industries, namely accommodation and food services.
Some businesses have ceased to operate entirely, while others are experiencing a huge reduction in demand and turnover.
Many aspects of your business may change, including insurance. You might be asking, will my premiums increase, or if I need to make a claim will I have to wait a long time for it to be processed – and will it be accepted?
As Your insurance brokers, we can connect you with the support your insurer is providing during the crisis and can alleviate some of the insurance payments via reduced Premium funding rates.
Some common questions we are asked!
Like any business, insurers are seeing a substantial impact upon their revenue due to COVID-19, in addition to rising claims costs from the recent horrendous bushfire & storms over the past summer. Notwithstanding, some insurers are providing short-term relief through deferred payments & other financial hardship assistance.
Talk to us to find out what your insurer is doing to provide assistance.
While there are measures in place to help businesses as they adjust to the current COVID-19 restrictions on trade, it’s important to make sure you’re making claims that your business is eligible for. After all, it’s a lot of paperwork if it isn’t going to return a positive result.
Business Interruption (BI) cover has been a hot topic, both here and overseas, as Government restrictions prevent many businesses from operating at full capacity or at all.
In Australia BI cover usually covers physical damage or loss to the property. In normal circumstances there is usually an exclusion for pandemics i.e. COVID-19. While some claims could be accepted, it remains unlikely that BI cover will support claims made by businesses in relation to the current coronavirus pandemic.
However, recently the Australian Financial Complaints Authority (AFCA) advised that they will be taking a ‘test case’ to the Federal or Supreme Court to ‘test’ whether the BI exclusions of some insurers can be relied upon to deny claims. We will keep you advised on developments.
OK, so it’s not all good news, and you need to understand how the downturns could affect your income.
If a global recession occurs, so will an increase in bankruptcies, particularly in industries such as Travel & Tourism, automotive, textiles, ICT and retail.
With the increased risk of bankruptcy comes a knock-on effect for debtors insurance (also known as trade credit line of insurance, export credit insurance and accounts receivable insurance).
Debtors insurance protects against the non-payment of debt in cases where your customers may be unable to pay their bills or even go into insolvency.
Unless you always receive payments from your customers and suppliers upfront – and we’re going to place a safe bet that you don’t! – your business is at risk without debtors insurance. However, with an increase in claims in this area it’s likely we will see premiums increase and restrictions on limits, which is something your business will need to plan and account for.
If a decline in trade persists some businesses may have to relook at the key risks facing their business and consider their insurance arrangements in that context.
One of the variables in this decision is likely to be how secure your cyber strategy is.
With a significant increase in employees working from home and using their own devices and internet connections, companies are much more vulnerable to hacking and other cyber attacks. This in turn could lead to a surge of cyber insurance claims.
When it comes time to renew your insurance arrangements or consider new risks to your business, be ready for questions around cyber security such as:
For more information on COVID-19 and support for Australian business talk to Us.Back to News