RESORT NEWS - TIPS SERIES: TIPS FOR INSURANCE
The cost of disasters and the need for accurate insurance The recent and ongoing storm season, as well as the concurrent bushfire risks has brought to the forefront once more, the importance of accurate insurance coverage for businesses in the accommodation sector. “Heavy rain from 25 January caused major flooding in Northern Queensland, where the Daintree River at Daintree reached record levels. The heavy rain continued to fall, affecting areas around Townsville on 30 January. The Queensland State government declared a disaster situation for Townsville on 31 January. Evacuations were carried out in Giru (south east of Townsville) and warnings issued for residents in Alligator Creek, Nome and Julago. The Ross River Dam spillway gates were opened on 03 February and warnings were issued to residents down river. By 05 February, local media reported that over 1,000 people had evacuated and thousands of homes and businesses were flooded after 1.8
metres of rain had fallen in the Townsville area in seven days.” The catastrophic floods that hit Townsville recently have caught unawares hundreds of small business owners that were not aware that their business policies did not provide cover for flood damage automatically. While the floods in South East Queensland of January 2011 did bring insurers into line with the standard definition and application of flood cover on domestic home and contents insurance policies, this did not extend automatically to business insurance policies. Many small business owners are now finding out that their insurance policies did not cover flood as standard, or that in many instances flood cover was not available or far too expensive to purchase. “The Black Saturday bushfires were a series of bushfires that ignited or were burning across the Australian state of Victoria on and around Saturday, 7 February 2009 and were among Australia’s all-time worst bushfire disasters. The fires occurred during extreme bushfire-weather conditions and
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resulted in Australia’s highest ever loss of life from a bushfire. Around midday, as wind speeds were reaching their peak, an incorrectly-rigged SWER line was ripped down at Kilmore East. This sparked a bushfire that would become the deadliest and most intense firestorm ever experienced in Australia’s post-1788 history.” The 2009 Victorian Black Saturday bushfires destroyed over 2000 homes with an estimated 13 percent of all properties uninsured, and for
those properties that were insured 40 percent of the covers were estimated to be either inadequate or underinsured. For many the purchase of adequate insurance cover in rural Victoria at the time was simply not an option, low-income earners and households, combined with the prohibitive cost of insurance that included onerous government taxes and stamp duties, created a systemic issue that estimates put at nearly one billion dollars of uninsured losses.
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By Christopher Traill, EBM
RESORT NEWS - MARCH 2019