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Australian summer bushfire risk – What’s the official word?

Business Insurance Property Insurance Business Interruption Insurance Commercial Property Insurance Commercial Property Owners Insurance

With all the rain and floods we’ve experienced recently, you’d be forgiven for thinking that the Australian summer bushfire risk has decreased. Well, it appears that’s not the case as the Australasian Fire and Emergency Service Authorities Council (AFAC) have predicted that the risk of bushfires to be above normal for parts of central western and southern WA, central Australia, Southern Queensland and inland NSW due to increased fuel loads as a result of significant rainfall. Western Tasmania also shows above normal fire potential following a dry Spring period.

So what areas are in danger of bushfires this summer, why is this risk still high and do you have the right insurance in place to cover your risks?

Why is the bushfire risk still high?

Due to higher than usual rainfall events across large parts of Australia in the past 12 months, vegetation has increased fuel loads in many regions. The weather bureau is anticipating 2023 to swing back to hot and dry weather, causing the grasslands and vegetation to dry out and become a potential fire hazard.

Although the Black Summer bushfires of 2019 – 2020 burnt through many areas, this new vegetation will at some stage end up as fuel for bushfires, meaning the fire risk is likely to increase or is currently above normal in some areas.

Policies, premiums and rebuild costs have changed – it’s time to review your property insurance cover and sums insured with bushfire season already impacting some parts of Australia. That’s because many policy wordings have changed over the past 18 months and premiums have again increased for many types of insurance policies.

These increases are in part due to the new building codes (following the Black Saturday Fires) that require buildings in high-risk areas to have a bushfire attack level rating. Dependent on this rating, buildings need to be built using specific designs and materials that significantly decrease the risk of bushfire damage. Unfortunately, these changes have also significantly increased rebuild costs. Some insurers have therefore decided to withdraw from offering bushfire cover in some areas, so it’s important to check your insurance cover.

Of course, these new building codes don’t help the multitude of existing buildings in bushfire-prone areas that weren’t built to survive fires. On top of all these issues is the fact that the cost of rebuilding has significantly increased since the beginning of COVID by as much as 25%, which could result in underinsurance if the sums insured aren’t updated.

Do you have the right business interruption cover?

Business interruption insurance is another policy that can help you recover quickly from a bushfire, getting you back up and running as quickly as possible. This insurance pays fixed costs of the business such as utilities, employee wages, mortgage, or lease, that need to be paid even though you’re not able to trade.

Management Liability Insurance

Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.

Details Get Quote

Business Insurance

A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.

Details Get Quote

Business Package

Purchase up to six products under one Business Insurance Package.

Details Get a quote!

So, if your business is in one of the high bushfire risk areas or your need help identifying if your located in a high-risk area, it’s a good idea to chat with one of our insurance specialists. They can make sure that your property insurance is up to date and explain how business interruption insurance can help minimise your financial risks in the event of a disaster.

To talk to an insurance specialist today find your local adviser.

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Insurance Advisernet, ABN 15 003 886 687, AFSL 240549

This article originally appeared on Insurance Advisernet News and has been published here with permission.