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As you prepare for storm season it is critical that you ensure your business assets and cashflow are adequately insured.

Like your assets, it is equally important to insure your cashflow with business interruption insurance. Ask yourself… “What would happen to my business if I was without cashflow for 3 months, 6 months…2 years?”.

Over 80% of businesses will not survive a disaster because they run out of cash…

The Australian and World economy has shifted dramatically since Covid-19 and the conflict in the Ukraine.

Delay in supplies and builder availability have caused significant delays in construction and increases in material costs and equipment. It is important that you take an inventory of your core equipment and check current prices and availability of stock. We have one client who is currently waiting 13 months for delivery of replacement light trucks at an increased price of just over 20%.

If your business relies on premises (rented or owned) you need to determine the cost to rebuild in the current economic climate. Estimate your replacement costs and add 20% to factor in the low Australian dollar and increasing inflation which is impacting prices across all business sectors.

We recommend you increase your period of cover for business interruption to at least 24 months…

This will ensure you have sufficient cashflow while you rebuild or search for alternative premises.

It is critical to forecast what your gross profit would be during a period of disruption. Look to the future and forecast how much gross profit your business would generate from the last day of insurance cover to the date your indemnity period finishes. For example, if your business suffered severe storm damage on 31 December 2022 (the renewal date of your policy) and you have 24 months cover, you need to forecast what your gross profit would be from 1 January 2023 to 31 December 2025. Make sure you consider growth in your business, new work contracts, new equipment that increases sales or capacity and efficiency in your operations.

Being under-insured can have catastrophic consequences for your business…

Contact your insurance broker today to ensure you are correctly insured and explain what happens if you are under-insured.

Andrew is a CPA and owner of Xcelerate, a specialist business interruption claim preparation service that has over 23 years experience in the insurance industry. If you have any questions regarding business interruption and lodging claims, please do not hesitate to contact Andrew on 07 3124 8600 or by email at

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