Preparing for a Zombie Invasion
As part of management training we are encouraged to think out of the square, be creative and question our response to different situations. So after watching the latest series of The Walking Dead at Insure 247 we are preparing for the Zombie invasion.
We are working out the details, which team members we will take with us (definitely planning to take people who are a good shoot), need a team cook, will Google still be there? Will the cloud still help us? Will people still need insurance or will we need a new occupation.
Of all the risk scenarios a business owner needs to consider, Zombie invasions are probably well down the list.
However it’s often the obvious risks that we miss
In business we all assume that nothing will change and if we come across a hurdle we will simply deal with it at the time and move on, and as the people responsible for protecting the assets in our business once our property and building are covered we assume we have done enough.
“if you business burned down today how would you recover?”
But when looking at the risks, and important part of planning should be to consider a recovery plan, simply put if you business burned down today how would you recover? Could you find temporary premises? Could you keep your key employees? Could you meet your clients demands before they could find a new supplier?
And if not you should consider cover to minimize the consequential losses.
Business Interruption Insurance
Business Interruption Insurance provides protection for the consequential loss of revenue resulting from interruption of your business, caused by damage incurred by unforeseen events.
Many insurers and other industry associations offer business interruption insurance calculators. These calculators will look at your gross profit, annual turnover and cost of working to offer a guide to request a quote.
Generally insurers offer indemnity periods of 6, 12 month, two year, three year or extended periods. However 6 and 12 month cover does not match most councils building code and planning requirements and businesses should consider the elongation of the indemnity period, 24 month cover should be a minimum, if not ask your broker.
Many business interruption policies include the “Gross Profit Percentage of the loss of Average Weekly Turnover adjusted for the trend.” So why is Trend so important , if your business is growing this will need to factored into the policy at the time of a claim.
Check the Co-insurance risk with your broker, work through the risks and your recovery plan, insurers can and will exercise any Co-insurance, Under most business policy wordings the insurer is entitled to impose a penalty via under-insurance averaging or co-insurance provisions, under this provision insurance companies assume that the business owners will fully insure their assets, for example if a business insures $100,000 worth of stock, but at the time of a claim they were carrying $200,000 worth the insurer would pay less maybe as low as $50,000.
Business Interruption Insurance Check List
- Use a business interruption insurance calculators
- Consider the indemnity period
- Factor in Trend
- Get the broker to look at any Co-insurance Risk
Stephen Sloan – AR: 441 907
Evitz Nutritional Pty Ltd t/as Insure 247 Australia Authorised Representative of Ausure Associate member of National Insurance Brokers Association of Australia Steve is a licensed insurance broker and marketer. He is an internet insurance pioneer in Australia.
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