Bushfires And Business Interruption

02 February, 2020

Business interruption cover such as IUA Interruption Insurance*, which provides for weekly payments, have meant that bushfire-affected businesses on the NSW South Coast haven’t had to wait long to have their claims paid.

Having this safeguard has been important in helping affected businesses to stay afloat, even amidst sizeable interruptions. Regular payments allow them to maintain their cash flow and pay ongoing outgoings such as rent and wages. Business interruption policies like IUA’s also enable businesses that suffer an insurable event to claim for loss of income they would otherwise be earning.

Policyholders in the best position have been those that have been able to quickly provide their business’s financial information, including turnover, to support their claim.

Christopher Connolly,  Head of IUA, explains how IUA came to the rescue for insureds who were impacted by recent bushfires. “The fires happened on New Year’s Eve. The first business day was Thursday 2 January. We started to pay claims the following Friday on 10 January, which was within 7 business days.”

Affected businesses with an IUA policy such as restaurants, shops and other local stores have been able to claim under the prevention of access clause.

The clause is triggered because the authorities issued directives that closed the roads. This meant that the annual influx of tourists the South Coast typically receives didn’t reach the businesses in the towns affected by the road closures. Some roads remained closed at time of writing.

The fires and subsequent road closures hit these businesses especially hard given how reliant they are on tourist trade during the summer holiday period. It’s a time when most of them make the bulk of their revenue. Additionally, most of the businesses IUA has assisted affected by the fires were small, family-run operations.

“These people rely on the cash flow from their business to support their livelihoods, so it’s important that their policy responds quickly,” Connolly says.

It’s a timely warning to all policyholders to check their insurance and assess the level and extent of business interruption cover they have in place. In particular, the advantage of a policy that includes provisions for weekly payments cannot be overstated.

This can make all the difference after a major disaster such as the Black Summer bushfires to enable businesses to continue to trade and maintain their obligations while they get back on their feet.


* Terms, conditions, limits and exclusions apply. Please refer to the Policy Wording for details.

This article is intended for insurance intermediaries only. IUA Interruption Insurance is distributed by Miramar Underwriting Agency Pty Ltd (ABN 97 111 534 797, AFSL 314176) trading as Interruption Underwriting Agencies (‘IUA’) acting under a binding authority as agent for the insurer, certain underwriters at Lloyd’s.