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How NZI can help you fully recover after major loss
Here’s a sobering statistic: following a disaster, 40% of US companies do not reopen and another 25% fail within one year.
One of the main reasons? The absence of appropriate insurance.
It’s an issue that we also see in New Zealand. Here’s how you can be in the best position to recover following a disaster – and so you can rest easy at night, knowing everything is taken care of.
Why worry about business interruption?
A major, unexpected event can have a profound impact on a business. Imagine a fire destroying your premises. Not only will the business be out of action for some time, it will also be at risk of customers forming relationships with your competitors, staff leaving for new opportunities, and reputational damage arising from your inability to service customers at the level they are used to.
While all this is happening, you will still be required to run the business while also contending with all the issues arising from the fire.
As in the US, however, many New Zealand business owners underestimate the impact of a catastrophic event as well as the time it takes to have the business fully reinstated.
Chris Hughes, Executive Manager Complex & Specialist at IAG, has seen this happen many times. “A recent fire in Christchurch left the premises still smouldering weeks later,” he says. “This delayed the assessors’ ability to do their work, and that significantly delayed the reinstatement period.”
Then there is supply chain uncertainty. Right now, it’s taking longer to procure specialist machines. If a business loses its means of production or service delivery, it can’t expect to replace its equipment as quickly as it could a few years ago.
Issues like this can have a significant compounding effect. Reputational damage can ensue from a business being slow to reopen, and hard-to-replace staff may leave. It’s easy to see how a business can then end up in a downward spiral from which it can be difficult to recover.
How to get the most from your broker
As a business owner, it makes sense to use your broker as a source of information, ideas and advice. A good broker will support you in choosing the best cover to ensure your business is protected. They can help you recognise and reduce risk, anticipate the time it will likely take to get back up and running after certain kinds of events, and recommend the most appropriate policies and extensions for your business.
“The relationship between a business owner and broker has to be mutual,” says Hughes. “It is essential to regard your broker in the same way you would your accountant or your lawyer. Those relationships are built on openness and straight talking, which are critical for any successful business.”
How an insurance broker will help your business
Business owners are often surprised by the extent of their broker’s practical knowledge. Brokers see a lot of where it goes wrong for customers and are well placed to offer good support.
“During recovery brokers have a duty to advocate – they will be at your side throughout the process,” says Hughes. “A good broker will encourage you to conduct a pre-loss review, which will help safeguard your business from being under-insured and leave you well positioned to survive major events.”
It is a relationship worth fostering and developing. Talk to your broker about how NZI can support your business or find a broker here to help ensure you have the right cover for your business. If you’re insured with NZI, your broker can also arrange a Risk Consultant visit.
