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AFMA – IAAA Conference Feb 2012

AFMA – IAAA Conference Feb 2012

CGU IS pushing the value of business interruption to Australia’s regional SME businesses following its latest research showing such cover is badly lacking beyond the metropolitan areas.
It has the potential network of 1000 insurance brokers and authorised representatives to enlist in its campaign.
“While we do not have a plan for a specific business interruption campaign through intermediaries, we continue to investigate ways to assist them provide their customers with informed views on the types of insurance they should have and why,” a CGU spokesman told InsuranceNewsAustralia.com .
“The importance of business interruption cover was the focus of our media campaign last year and we felt it was still an important message for our intermediaries and the broader community to hear.”
To start its drive, CGU has put online a one-page flyer on how business interruption insurance can help a business: www.cgu.com.au/cgu/business-interruption-flyer
CGU’S research released yesterday showed that one in 4 businesses in regional and rural Australia would not survive if they had to close their doors for 3 months.
CGU’s survey of small business owners in regional and rural NSW, Victoria and Queensland found that 25% would have to shut down if they had a major business disruption such as a fire or major machinery breakdown.
Some 38% would shut down if fire or breakdown happened during a busy period in the year. CGU said a further 23% of business owners said their business would struggle to cope with a 3-month closure and their business survival would be threatened.

Less than a quarter of business owners surveyed were covered by BI insurance. The research also reported that those employing less than 20 staff were the most fearful of their prospects if their business had a prolonged shutdown.
Some 62% of those with two to 4 full-time staff said their business could not survive or would have their survival threatened.

About 14% of all businesses surveyed had a shortfall in income because of a business interruption in the past 12 months.
CGU general manager retail Mark Searles said the research findings highlighted the devastating consequences of a business interruption for small businesses in regional and rural areas.
“Small businesses insure their premises, their employees and their equipment � they really need to insure the livelihood of their business too,” Mr Searles said.
“Any business interruption could be a major setback that threatens its very survival, particularly when margins are already tight, as is the case in many businesses.”
He said that small businesses were the backbone of their communities, particularly in regional and rural areas, so it was important for local operators to protect these valuable jobs.
The research was conducted in an online survey of 477 small business owners in Victoria, NSW and Queensland this month. It was conducted by QOR and commissioned by CGU Insurance.
Source: Insurance News Australia

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