Some insurers have already started to pay claims to bushfire-affected businesses on the NSW South Coast, as their business interruption insurance policy provides for weekly payments.
Having this support has been important for affected firms to stay in business. It allows them to maintain their cash flow and pay regular outgoings such as rent and wages.
Under a business interruption policy, a business that suffers an insurable event can claim for loss of income. Policyholders in the best position have been those that have been able to quickly provide their financial information to support their claim.
Christopher Connolly, underwriting manager with underwriting agency Interruption Underwriting Agencies (IUA), explains.“The fires happened on New Year’s Eve. The first business day was Thursday 2 January.
We started to pay claims the following Friday 10 January, which was within 7 business days” he says.
Affected businesses such as restaurants, shops and other local stores have been able to claim under a prevention of access clause in their policy.
The clause is triggered because the authorities issued directives that closed the roads. This meant the annual influx of tourists the South Coast receives could not reach the businesses in the towns affected by the road closures.
Some roads remained closed at the time of writing.
This article from the Steadfast online magazine Well Covered, discusses risks of underinsurance, how to avoid mistakes and ensure homeowners have the right insurance in place, particularly in fire-prone areas.