By Claire Reilly
The Australian Retailers Association has come out to warn Australian retailers on the dangers of failing to insure (or underinsuring) their business, especially in light of recent natural disasters and the arrival of the bushfire and flood season.
“This is a timely reminder to Australian retailers that they’re operating in a land of fire and floods, and the consequences of cutting down on insurance costs means they could find themselves underinsured,” said ARA executive director Russell Zimmerman.
“One in every 500 businesses will suffer from a natural disaster in Australia and 43 percent of businesses that experience a natural disaster never reopen.
“Many retailers find out too late they don’t have the insurance cover they need to rebuild their businesses after a fire or flood, which is a sad realisation given they could have recouped their business by insuring to the full value of the business.”
Whilst Zimmerman conceded that insurance would be an additional expense to retailers, he also noted that it was a worthwhile precaution to take in order to prevent much greater costs down the track, should something unfortunate occur.
“The benefits of insuring to the full value of the business outweigh the costs if and when disaster strikes,” he said.
“To ensure adequate cover and avoid underinsurance, retailers can engage the assistance of an insurance broker who has the specialised knowledge to see whether the business is underinsured and understand each and every policy wording of each insurer.
“An insurance broker is also able to incorporate business interruption insurance into an insurance policy, which puts the business back in the same financial position as it was before the loss.
“Given retailers have to pay employees, meet customer needs, pay off debt and maintain a lifestyle this is more than worth considering.”