Lisa Carter - Managing Director, Clear Insurance
When we talk to business owners about risk, the conversation usually starts with the obvious. A fire may damage the premises. A storm may
cause significant damage. Critical equipment may fail.
However, the event itself is just the beginning. The real challenge is what happens next.
Consider this: if your business couldn’t operate normally tomorrow, how long would it take to get back to where you are today?
After consideration, most business leaders realise it may take longer than they initially thought.
Repairs take time. Specialist equipment may take time to replace, or you may need to find temporary premises. It may change the way you or your team works, and despite it all, the fixed costs continue (rent, salaries, loan repayments). All while revenue may be down.
Depending on the length of time until you reopen your doors, there may be another layer. Customers may have made other arrangements or suppliers moved on. It may take weeks, or months, for the business to return to its previous trading level. The interruption to your business (the gap between when things stop and when they return to normal) is often underestimated.
Your resilience may depend on things outside of your control too. For example, if you rely heavily on a particular supplier or service provider, an incident for them may affect you.
Once you understand the potential recovery time and financial impact, you can plan accordingly. That might involve insurance, cash reserves, operational planning or stronger supplier relationships. Usually, it’s a combination.
What matters is having an actionable plan that you have tested. It isn’t simply having insurance cover; it’s making sure your plan reflects how your business would recover.
If you’d like to explore business interruption planning for your business, we can help review your existing insurance program. It does not mean you necessarily need more insurance. You may have adequate cover. If there are gaps that expose your business, we can explain the options that suit your circumstances. Contact Lisa Carter at lisa.carter@clearinsurance.com.au or call 1300 721 132.
