Four ways to reduce your business risks in the uncertain business climate
In an unpredictable business environment, such as during the COVID-19 pandemic, it can be difficult planning to eliminate, minimise or control risks to your operations. This article offers four types of insurance that can help you deal with uncertainty.
Retail businesses owners, for example, might be on edge waiting for the next public health order to temporarily shutter their premises. When staff, customers and visitors are not in your commercial premises during a shutdown, it’s considered unoccupied, but not vacant. That’s because unoccupied premises still have equipment, personal property, etc.
Ideally, during a shutdown, you’ll have appropriate management practices including:
- Security such as live CCTV, motion-sensor lighting, 48-hour patrols, a back-to-base alarm and trimmed vegetation etc. to thwart the risk of arson, vandalism, burglary or squatters
- An operational fire-fighting alarm and system
- Equipment protected from dust, insects or pests
- Where practical, storing combustibles inside your premises rather than externally to reduce the temptation for arsonists.
Property insurance policies usually have an ‘unoccupancy clause’. It can exclude or restrict cover if the premises are unoccupied for a set period. That could be anywhere from 30 to 100 consecutive days, depending on the policy. Once that exclusion clause is triggered, you may be left without cover for loss or damage to your buildings, contents & stock.
However, keeping us updated on what’s happening with your business means you can still have this protection during shutdowns. We’ll help you reassess your risk, and that includes if nearby business premises are vacant or unoccupied. You can opt for an unoccupied premises policy to cover you for as short as three months, or longer.
Keeping your workers COVID-safe
What about those workplaces that remain operational and someone becomes infected with COVID-19 there? While each state has its own workers compensation legislation, employers are usually liable because it’s a workplace injury, according to lawyers and unions, and even WorkSafe Victoria says staff may be entitled to workers’ compensation if they catch the virus at work. Safe Work Australia says that as of 31 July last year, more than 500 COVID-related workers’ compensation claims were lodged in Australia. Workplace experts say genomic sequencing will help prove employer liability for COVID-19 illnesses, with substantial payouts a possibility.
So, how can you reduce your risks of litigation? Keep in the know. The pandemic increases employers’ responsibilities to maintain a COVID-19-safe workplace, as this Safe Work Australia website details. Fair Work Australia also explains temporary changes to workplace laws during the virus.
Protecting those at the helm of your business
If you’re not following those requirements, you risk being sued in your capacity as a company director or officer, with your personal assets vulnerable. The law defines who is an ‘officer’ and extends to people who take part in making decisions that affect the whole or a substantial part of the business. This is where directors’ and officers’ insurance can give you peace of mind. That cover came in handy for Woolworths in late January, when it’s understood that its insurer paid out $44.5 million to shareholders put out of pocket by the retailer’s move away from profit guidance in 2015. In 2019-20 the courts awarded $1-billion-plus to more than 35 class action settlements. For broader coverage against litigation risks to your business, management insurance includes those at the helm and staff.
Dealing with cyber risks
Many businesses still have staff working remotely to reduce their risks of coronavirus infections, but that increases the vulnerability of cyberattacks. Hackers are breaching the once-secure virtual private networks that businesses have set up for remote staff to connect with the enterprise’s network.
The Australian Cyber Security Centre says few SMEs businesses are aware of the many effective and inexpensive practices to protect against cyberattacks. That’s despite such breaches costing businesses $300 million in total damages annually. On average, it takes 279 days to identify and deal with a data hack.
Proactive ways to be cybersafe include:
- Backing up your data
- Securing your network and devices and ensuring staff use your computers, not their personal ones
- Encrypting important information
- Using multi-factor authentication to log into your systems
- Using passphrases rather than passwords to access devices and networks – they’re complex, 14-characters or more long with random words, so they’re unique and unpredictable
- Having robust policies and training to guide your staff
- Protecting the information you keep on your customers including about their payments
- Seeking professional advice to keep updated on the latest risks.
Those approaches significantly reduce your risk profile as does investing in cybersecurity insurance.
So, even in economic uncertainty due to a pandemic, you can still be protected. Talk to us about managing your business risks more efficiently.
Code of conduct for SME commercial leasing https://www.pm.gov.au/sites/default/files/files/national-cabinet-mandatory-code-ofconduct-sme-commercial-leasing-principles.pdf
COVID-19 information for workplaces