How to ensure a facility is insured against disaster
Given the large number of disasters over the past few years, it is important to know how to best protect your facility. ADAM GRANT, managing director of AJ Grant Group, divulges how best to insure your facility against disasters.
Disasters are typically said to be an effect of the earth’s natural hazards and in the past happened infrequently. Whether or not these acts of nature occur more frequently due to global warming or climate change is still a topic of debate amongst scientists today.
Nevertheless, when these types of events occur they lead to human casualties, environmental catastrophes and financial losses for those affected and can also have a knock-on effect for others who may not have been directly involved.
Support from various forms of assistance is fundamental for businesses and facilities, as well as communities and families, involved in disasters. Whether this is via insurance companies, government collaboration, community volunteers or fundraising efforts, it is of great importance to have such support when disaster strikes.
TAKING PRECAUTIONS AND HAVING SUPPORT IN PLACE
Given the large number of disasters over the past few years, it is important to know how to best protect a facility and/or property. It is humanly impossible at times to stop a wall of water from penetrating a property, a fire from engulfing a premises or a large tree from falling and destroying property. Nevertheless, there are steps that can be taken that may assist in preventing a heartbreaking outcome, providing the necessary measures have been taken and maintained in the first instance.
These steps include being mindful of a facility’s surrounding environment. Inspect the area and report any concerns to the local council. For example, large trees close to the property may be hazardous during a storm or fire.
In addition, a facility’s zoning should be checked with the local council. If the facility is within a fire or flood zone, extra precaution may be necessary to protect or prepare it, such as keeping gutters clear and/or removing overhanging branches.
Overall, using a common-sense approach to property will be beneficial. The most common method of ensuring a facility is protected from disasters, however, is through insurance.
Australia has a large and mostly well-known selection of insurance companies that can offer their services in the event of a disaster or misfortune. Insurance protection is an invaluable form of support that should be considered for any form of property. Paying weekly, fortnightly or monthly premiums is small change in comparison to what can happen in times of disaster or misfortune if a facility is not insured.
ENSURING THE RIGHT INSURANCE
Each insurance company’s policies and the level of protection they offer differs; therefore, it is imperative that policies are reviewed and analysed vigilantly prior to deciding on purchasing a particular product and level of cover. Certain circumstances, such as prior incidents and where a facility is located, may have an impact upon the level of insurance a facility can receive. Some insurance companies may not offer protection depending on various risk factors; for example, if a facility is sited in zones or regions where flood and fire are imminent dangers.
When choosing an insurer, make thorough comparisons between what each one is offering. It may seem that some charge excessively for a product similar to one being offered for less by others. However, a similar policy with a lower charge may have specific stipulations on what is not covered. Don’t be fooled by basic policies. Depending on the facility or property, additional specialised coverage may be required.
Insurance brokers can assist in providing expert knowledge on products, policies, associated risks and pricing on insurers and what they offer. Some may also assist during the claims process and will review policies on an annual basis. All insurance brokers are legally required to hold a valid registration with the Australian Securities and Investment Commission (ASIC).
FLOOD COVER UNDER THE MICROSCOPE
Over the past 12 months, we have seen a flow-on effect of rises in premiums throughout the industry. The one that stands out the most is flood cover. Since the devastating effects the Brisbane floods had on so many lives, the whole insurance industry has been under the microscope regarding flood cover.
Insurance companies have all been forced to include this in polices and, in turn, this has pushed up premiums.
Some insurers will automatically include this in a policy, while others will allow you to opt out of the flood cover if you choose to do so. It is very important to understand the area where your facility is located and whether it could be affected by floodwaters. The local council can provide advice on the region and information on which areas are affected by floodwaters and which areas are not affected.
For example, a facility may be located in a designated flood area, but it may be at the top of a hill in the region; therefore, the chance of it flooding would be minimal. In this case, a cover that has other options that suit the property better for less money should be chosen. This is just one example of how you need to know the facility you manage and the region in which it is located.
REGULARLY REVIEWING INSURANCE POLICIES
Knowing what a facility is worth is valuable and reviewing a property’s value in comparison to the market is necessary given recent property market booms around the country. A facility’s value needs to be regularly updated and passed on to the facility’s insurer.
Previous disasters across the country in recent times have impacted insurance premiums. It is important to review a facility’s insurance policy annually to assess any changes or additions from the insurer. And, if referencing terminology within a policy is unclear, liaise directly with the insurer to have these explained in further detail so each element of the policy is understood.
MAKING A CLAIM
In the event of you needing to make a claim on a facility’s insurance following a disaster or hardship, insurance companies will have a number of reputable builders and contractors on file with which they conduct business on a regular basis. These will assist throughout the process of making the site safe, conducting assessments and facilitating repairs, and minimise the inconvenience caused and financial loss a facility endures following a disaster.