Uncategorized Archives | Page 2 of 3

Materials commonly used to replace damaged properties, such as building items and even labour, are in short supply, driving up replacement costs.

Steadfast Broker Technical Manager Michael White says in these times, it’s important for small businesses to make sure the sum insured for their assets reflects their current replacement value so that if their property is damaged, the settlement may cover the costs.

“If the sum insured is not accurate, this may impact the settlement they receive if they have to make a claim,” White says.

INSURING FOR THE TRUE REPLACEMENT COST IS CRUCIAL

White says there are several factors to consider.

“The first thing is that in business insurance – but not in home insurance – there is generally a co-insurance clause that states you have to insure for the replacement cost of the building as at the time you take out the policy,” he says.

“That’s relevant in the current inflationary environment because, unfortunately, the cost of materials and building costs have increased significantly.”

It’s extremely important that the sum insured reflects the true replacement cost at the time the policy is taken out, regardless of what the owner believes it to be, White says.

“If the business doesn’t insure for full replacement cost, in the event of a claim, the insurer can reduce the amount of the payout even if there is not a total loss” he says.

The way in which this works is complex and depends on the wording of the particular policy. However, the following is an example from a wording which is widely used in the market.
* Sum Insured on the building: $1,000,000.
* Actual cost of replacement of the building: $2,000,000.
* Cost of repairs: $200,000.
* Amount payable under the policy = ($2,000,000 x 80%) = $1,600,000.
* $1,000,000/$1,600,000 = 62.5%.
* $200,000 x 62.5% = $125,000
* Amount payable = $125,000.

However, White says: “If the building burns down, the insurer only has to pay you the sum insured. If the insured amount is $1 million and it’s going to cost $2 million to replace, you’re $1 million out of pocket.

YEARLY REVIEW OF SUM INSURED RECOMMENDED

Underinsurance can be a serious problem in Australia, especially when people don’t regularly review the sum insured.

“Small businesses should aim to review the value of their assets at least once a year,” White says.

“Maybe at the moment, because the increases are so significant, it should be twice a year, but at least once. And every time a business renews the policy, they should be working out the replacement cost of the asset.”

“If your property or asset has an unusual feature, it’s best to use either a quantity surveyor or a valuer to get a more accurate calculation,” White says. “This should be done at every renewal, particularly in the current environment of rising inflation.”

CALCULATIONS SHOULD FACTOR IN A TIME LAG

Another point small businesses should consider is that if their building or another asset is damaged or destroyed, it may take a while to replace, as some materials are not currently accessible.

“Jobs that previously took six months can now take 12 months because the materials aren’t available,” White says.

“Also, if a significant amount of work is required, it will probably take a while to get council approval. In the time required to get either approval or for the materials to be sourced, costs could have risen again. All this needs to go in the mix when working out how much cover you require.

“This is why having a conversation with your broker is so important.”

Important notice – Steadfast Group Limited ABN 98 073 659 677
This general information does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether this business interruption insurance is appropriate for you. Deductibles, exclusions and limits apply. This insurance is issued by various insurers and can differ. You should consider the relevant Product Disclosure Statement and any Target Market Determination in deciding whether to buy or renew this type of insurance.

The possibility of having cyber criminals make your personal details public is worrying enough, but did you know that criminals can also use this information to damage your business?

“When a company’s security is compromised criminals often put the data they steal up for sale on the dark web, or what is called personal information auction sites,” says Gerry Power, Head of Sales for specialist cyber insurance provider Emergence Insurance.

“One hack might make your name and email address available, which isn’t necessarily a serious loss. However, if a second attack exposes, say, your driver’s license and passport details, criminals could collect all the data they need to steal your identity.”

Loans in your name

With 100 points of identification, a cybercriminal could open a bank account in your name, be approved for a loan or credit card, take the money and leave you to make the repayments. Even unsuccessful applications can put your business at risk by damaging your credit rating.

In that case, you could find yourself locked out of new finance until the matter has been resolved – an often complex and time-consuming process.

Writing in the Guardian newspaper just after the Optus breach, Martha Bedggood, who owns a small business in Sydney, explained how a compromised phone number and email address forced her to put a six-month credit ban on all of her own and her husband’s accounts.

Four years later, the fraudulent activity still visible in her credit history is making it hard for her to get any kind of finance.

FIVE TIPS TO PROTECT PERSONAL DATA

Cybercrime in Australia is continuing to rise and, according to the Australian Cyber Security Centre (ACSC), identity theft was one of the most common threats during the 2021–22 financial year. These tips will help you to protect yourself, your family and your business.

1. Use a different strong password for every account.
2. Backup your data regularly and often.
3. Switch on automated software updates.
4. Never provide more personal information than is absolutely necessary.
5. Check every link in an email or text before clicking on it.

For more details and helpful suggestions, take a look at our article How to protect your business from cybercrime.

New insurance brings greater peace of mind

Taking some of these steps to protect your data can reduce your risk of being hacked. However, no business is unassailable – and attacks can be expensive. The ACSC reports that, on average, a single cyber event costs a small business over $39,000.

Emergence Insurance has developed the only personal cyber insurance policy in Australia for individuals and families that provides cover for identity theft and many other cyber exposures – up to $50,000 in cover for as little as $99 a year plus Government charges.

“You also have access to professionals who can support individuals and families with things like obtaining new ID, cancelling credit cards and contacting financial institutions,” Power says. “That’s how this insurance, which is only available through intermediaries, can make the whole process of recovery less stressful.”

Emergence also has a range of cyber insurance products to protect businesses. Find out more by contacting your broker today.

Important notice – Steadfast Group Limited ABN 98 073 659 677
This general information does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether this business interruption insurance is appropriate for you. Deductibles, exclusions and limits apply. This insurance is issued by various insurers and can differ. You should consider the relevant Product Disclosure Statement and any Target Market Determination in deciding whether to buy or renew this type of insurance.

The recent cyber attacks on Optus and Medibank Private compromised personal information from around 14 million customer accounts. At the same time, companies including Uber, Telstra’s staff rewards program and wine dealer Vinomofo were also under attack.

Cybercrime in Australia is on the rise. According to the Australian Cyber Security Centre’s annual threat report, more than 76,000 events were reported during the 2021–22 financial year, up 13 per cent from the previous financial year.

Costs associated with each one rose by an overall 14 per cent to an average of $39,000 for small businesses and $88,000 for medium sized business – and criminals are targeting businesses of all sizes.

WHAT IS CYBERCRIME?

Cyberattacks extend way beyond the major breaches of security we hear about in the media. Other examples of cybercrime include fraud, financial and identity theft and business email compromise.

“One thing small business owners may not realise is that a breach of their personal data could put their company at risk,” says Gerry Power, Head of Sales for specialist cyber insurance underwriter Emergence Insurance.

“If criminals gain access to, say, your passport and driver’s licence details, they could collect the 100 points of identification needed to start applying for credit in your name. You might know nothing about it until you apply for business finance and find that loan applications have been refused, your credit rating has fallen through the floor, and you can’t get any finance until the situation is resolved.”

These tips to protect personal data can also boost your business security. It’s also important to follow ACSC’s advice for ransomware, business email compromise and other threats.

1. Take password security seriously
Despite all the warnings, the 10 most common passwords in 2022 were 123456, 123456789, qwerty, password, 12345, qwerty123, 1q2w3e, 12345678, 111111 and 1234567890.

“Using strong passwords, and a different password each time, is an effective way to boost security,” Power says. “Consider investing in a password software manager that can create and remember them for you. Multifactor authentication, such as a six-digit code sent to your phone, can add another layer of protection.”

2. Back up your data regularly
Victims of a cyberattack may potentially lose data created after their last backup.

“The more recent the backup, the easier it can be to retrieve vital information,” Power says.

3. Prioritise automated updates
If developers find a vulnerability in their software, they fix it with a patch, correction or change. When you opt to have these updates applied automatically to your own software, criminals can have less time to exploit the weakness.

4. Protect your personal information
Many organisations ask for more personal information than they need simply because it’s useful to have.

“The less information you provide, the less you have to worry about if they’re hacked,” Power says. “For instance, if your birth date isn’t mandatory, why share it?”

5. Check before you click
According to the Office of the Australian Information Commissioner, human error contributes to 41 per cent of data breaches.

“As technology becomes more sophisticated, scams are getting harder to detect,” Power says. “You and your staff must be vigilant, verifying every link before clicking on it.”

Find out more

Emergence has developed cyber insurance solutions for SME’s, corporates and the only standalone personal cyber policy for individuals and families available in the Australian market. Find out more about this and other protection by contacting AIB today.

Important notice – Steadfast Group Limited ABN 98 073 659 677

This general information does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your Steadfast insurance broker as to whether this business interruption insurance is appropriate for you. Deductibles, exclusions and limits apply. This insurance is issued by various insurers and can differ. You should consider the relevant Product Disclosure Statement and any Target Market Determination in deciding whether to buy or renew this type of insurance.

COVID-19 led to many more people starting small businesses from home, often as a side hustle. But even a micro business can affect whether your current insurance policy is valid. So, what kind of insurance may you need to run a business from home? We’ll explore that. But first, it’s time to check what may be covered by your existing policy.

CHECK WHETHER YOUR HOME-BASED BUSINESS IS COVERED BY YOUR EXISTING POLICY

If you operate a home-based business, it’s crucial to check whether your insurance policies cover you if you need to make a claim. In most cases, a home and contents policy will not provide cover for a business, no matter how small that business may be.

Steadfast Technical Broking Manager, Annette O’Brien says it’s important to check the fine print in your policy.

“If you have any doubts, contact your insurance broker who will be able to assess both the type of business you’re running and your individual needs, to advise on the best policy for you,” she says.

One thing to be aware of she adds, is that in some cases, if you only have home and contents insurance, and then make an inquiry about coverage for a home business, you may find your existing policy may be cancelled.

“In one situation, a person based in Canberra who was running a small filmmaking business became concerned when he heard about policies being cancelled if the business was run from home,” O’Brien says. “He rang his insurer and was shocked when they cancelled the policy on the spot without any explanation.”

It is worthy to note that insurance companies cannot cancel policies on the spot. They need to provide an explanation to the policyholder if they intend to cancel a policy or decline a request for insurance cover because the business activity is undertaken from home.

WHAT IF YOU HAVEN’T DECLARED YOUR HOME-BASED BUSINESS?

If you haven’t declared your home-run business to your insurer, then you need to do it immediately, says O’Brien. “If your ABN is registered under your current address, then you should check the wording of your insurance policy to see if there is any cover for a home business – which is generally unlikely,” she says.

“Before you contact your insurance company, you can seek the advice of an insurance broker who can provide guidance around the best policy for your needs.”

It is important for the insurer to be aware of your circumstances as there are severe consequences for non-disclosure or misrepresentation, no matter how unintentional your actions are.

“You should also be aware that if you deliberately conceal from the insurer that you are running a business from home, it could constitute fraud, the consequences of which are very serious,” O’Brien says.

“The Insurance Council of Australia has made it very clear that it’s important to be honest with your insurer if you conduct a business at your home.”

WHAT INSURANCES DOES A HOME-BASED BUSINESS NEED?

O’Brien says there is a number of common insurance mistakes people make when running a business from home. Most of them involve people not thinking about the type of insurance they may need. “And when they do,” she says, “they’re unsure of what items to include.”

In some cases, you may be able to extend your existing home and contents policy to cover your office equipment, such as your laptop. However, it is more likely you may need to take out separate business-specific insurance policies.

Business insurance policies can include:

Public liability insurance (this is very important if you have customers or suppliers visiting your home);
Business interruption insurance;
Accidental injury insurance;
Income protection;
Money insurance;
General property insurance;
Machinery breakdown insurance; and
Tax audit insurance.

Do you have questions about insurance for running a business from home? Talk to an AIB insurance broker today.

Some business insurance packages have changed to adapt to the new circumstances, so it’s important to check what’s covered and whether you need to update your policy.

DON’T COUNT ON COVID COVER

The pandemic affected businesses in unimaginable ways, with premises needing to close and staff having to isolate. However, businesses that believe they can get cover for pandemics will need to think again. Steadfast Broker Technical Manager Michael White says it’s unlikely any pandemic cover will be available in the future.

“The only cover for contracting a disease will likely be related to very specific things, such as food poisoning or Legionnaires disease,” he says. “Cover will be limited to those diseases that are very specific to particular businesses, or particular premises.”

He adds insurers’ appetite for risk has changed since the pandemic. “They are much more conservative now,” he says. “And this is reflected in what they will cover and under what circumstances.”

CYBER ATTACKS A MAJOR CONCERN

COVID led to millions of people working from home but with that came a greater risk of cyber-attacks. White says insurers are introducing what they refer to as silent cyber or non-affirmative cyber into their business packs.

Silent cyber refers to any potential cyber losses that are contained in traditional property and liability policies that were not specially designed to cover cyber risk. Traditional liability polices weren’t set up to include cyber exposures, White says, and may not deal with risks such as software viruses or malicious code.

“You can get business interruption cyber cover in some cyber insurance policies,” White says. “But in traditional insurance policies you need physical damage to have occurred to the property. Some insurers have now removed any possibility of giving business interruption cover, or any other cover, where a cyber-attack doesn’t cause physical damage.”

HOW NATURAL EVENTS HAVE AFFECTED COVER

The natural disasters Australia has experienced are also playing a role in changes to cover. Flood cover has always been difficult to get, especially if a business was exposed to flooding. White says the recent flood events haven’t made the situation any easier. “Flood cover is available but the cost of it can be very high, which means many small business owners just don’t take it out.”

He adds insurers are now more cautious about areas that are exposed to disasters such as bush fires. “For example, some insurers are now looking at access issues in relation to bushfires, such as whether there is only one road in and one road out of a particular area, which increases risk. That’s the kind of thing insurers want to know.”

He adds if businesses have closed their premises recently and moved their operations online, it’s important to speak to a broker to check they are still fully covered for damage to any premises they own.

Brian Hong, CEO of Infintech Designs, says the pandemic made him rethink his company’s insurance needs. “I thought I had the perfect insurance policies in place, but the pandemic really tested us,” he says. “I’m now very particular about policies that prioritise lost business income.”

Is it time to sense check your insurance cover? Talk to youor AIB Insurance broker today.

Important notice – Steadfast Group Limited ABN 98 073 659 677

To say the last couple of years have been challenging for Australian workers is a major understatement. Since the onset of the COVID-19 pandemic in early 2020, they’ve had plenty to deal with, from juggling home schooling and work commitments, to worrying about whether they’d even have a job a couple of months down the track.

Managing post-Covid employee burn-out

Fifty-one per cent of Australians working during Covid-19 reported feeling stressed as a result of changes in work routine and organisation, according to 2021 Ipsos research. The same number cited increased anxiety around job insecurity as a significant challenge.

Those working on the frontline, for instance in healthcare roles, have done it particularly tough. Dedicated employees put in many hours at the height of the crisis to keep the healthcare system operational, the supermarket shelves stacked and the elderly and vulnerable protected. They sweated their way through long weeks and months wearing personal protective equipment (PPE), they contended with staff shortages and they faced the emotionally difficult task of supporting COVID-19 sufferers and their families.

Meanwhile, individuals whose employers pivoted to remote working faced a different set of challenges during the long months of lockdown, with 45 per cent stating they felt lonely and isolated while toiling at home, according to Ipsos.

BATTLING BURN-OUT

It’s little surprise many workers are now battling physical and mental health issues including, in some cases, overwhelming feelings of stress and exhaustion. This is the definition of employee or workplace burnout, a condition which can lead to fatigue, behavioural changes, anxiety and depression.

Individuals who develop employee burnout may be entitled to workers compensation for mental injuries they suffer in the course of their employment, provided they can show a substantial connection between their work and the symptoms they are experiencing.

That means demonstrating that their condition constitutes an ‘injury’ under the workers compensation legislation in the relevant jurisdiction.

If an employee burnout claim is disputed, the assessor will examine work and non-work related factors before making a determination.

MAINTAINING A HEALTHY WORKPLACE

Prevention is always better than cure. Fostering a healthy workplace is the best way to minimise the incidence of employee burnout within your team.

In volatile and uncertain times, it’s critical to support mental well-being, says Steadfast technical broker manager Annette O’Brien.

“Depending on the nature of the business, leaders may need to support a gamut of measures,” O’Brien says. “These could include providing the right equipment so employees can discharge their duties effectively, ensuring work-stations are ergonomically sound, and having enough staff available to manage the workload.”

Offering support, counselling and treatment services – and encouraging workers to make use of them – can help teams maintain good mental health when circumstances are challenging.

“Employees who don’t have access to appropriate support mechanisms are far more likely to suffer psychiatric injury or quit their jobs,” O’Brien says. “Providing them with support that could prevent this occurring is good for them and good for your business too.”

A broker can help you determine whether you have adequate workers compensation cover for your business. Contact your AIB broker today to find out more about your business insurance and the level of protection it provides.

Important notice – Steadfast Group Limited ABN 98 073 659 677

Like so many things, business travel is now back on the cards since most countries have re-opened their borders after the easing of COVID restrictions. But if you’re heading away for work, it’s important to make sure your insurance covers you if fall ill before or after you take off.

Let’s say you run an import business and you want to travel to India to see your suppliers. You’ve booked your flights and accommodation and you’re ready to leave. But a few days before you’re due to go, you test positive for COVID. Aside from the inconvenience, you want to ensure you have the right corporate travel insurance policy in place so you’re not out of pocket for your travel costs.

“Most corporate travel policies provide some form of COVID insurance cover for medical expenses if you contract the corona virus overseas and also for cancellation costs if you get COVID and it stops you from travelling,” says Steadfast Broker Support Manager John Clark.

It’s important to understand how the policy will respond if you contract COVID overseas and are required to self-isolate, for instance in in a hotel, serviced apartment or other rented premises.

“Those costs typically won’t be covered by the medical expenses section of the policy. So, make sure your policy covers expenses incurred as a result of contracting COVID that are not medical expenses, such as missed flights. Travel costs are volatile right now and re-booking cancelled flights may cost substantially more than the original booking. So make sure your policy covers this cost,” says Clark.

“It’s quite possible to incur hundreds of thousands of dollars in expenses if you’re hospitalised overseas after a car accident, break your leg or fall seriously ill, especially in the US. So make sure your policy includes cover for a large amount for medical expenses, hospital admission and medical evacuation,” he recommends.

Clark says the relevant consideration for business travellers is to ensure their corporate travel policy has sufficient cover for medical and hospital expenses overseas, and not just for COVID. You also may want to make sure you’re covered if you can’t travel because you are a close contact and have been required to isolate or if your business travel partner can’t travel because of COVID and you are consequently forced to change your travel plans.

What’s key is to read the policy fine print so you truly understand what it covers before you need the insurance. It’s also essential to know the limits of the policy and its exclusions, as well as whether you are still covered should your trip be extended.

POST-COVID WORK TRAVEL CONSIDERATIONS

There is a number of other considerations business travellers need to make before embarking. It’s vital you understand the COVID testing rules in the country to which you are travelling, as well as your airline’s rules, and comply with them.

It’s also essential to check the federal government’s Smartraveller site before you go. Most insurance policies won’t cover you if the government’s alert level for the country to which you are travelling has escalated to ‘do not travel’. If the alert level has risen, it’s wise to reconsider your plans. Policies will also typically not respond if authorities change or instigate rules such as lockdowns that prevent you from travelling.

Your AIB Insurance broker can help you to choose the right corporate travel policy for you. Talk to us today to find out more.

The small-business sector was hit hard by the pandemic. The Reserve Bank of Australia found the sector was disproportionately affected by COVID because these businesses are more likely to be in industries that were affected by restrictions on movement, such as cafes and restaurants, as well as arts and recreation.

If your business was more permanently affected by COVID constraints, it’s time to map out the major shifts that have happened in it such as staff changes and moving into different premises. These changes may affect the amount and type of insurance you need.

UPDATE YOUR BUSINESS PLAN AND STRATEGY

It’s time to update your business plan once you’ve mapped out any new risks. This will include your risk-management strategy. As part of your plan, include your sales pipeline and projected revenue. Knowing what’s coming up regarding future sales gives you an idea of how your business is likely to perform and this will be a factor in determining the amount of insurance cover you need.

Creating a budget and cash-flow forecast is another important management tool that should form part of your plan. It enables you to see at a glance what you need for your day-to-day commitments and helps you understand and plan for any gaps. These types of forecasts also help you make informed decisions about future expenditure.

KNOW WHAT YOU CAN CLAIM

Make sure you understand which insurance is tax deductible . While your accountant is in the best position to help with this, generally the ATO allows you to claim a deduction for most operating expenses in the same year you incur them. When it comes to insurance, you are generally able to claim for cover such as fire, professional indemnity, public risk and workers’ compensation.

IS YOUR INSURANCE RIGHT FOR YOU?

When reassessing your insurance, it’s important to know if it’s fit for purpose. Steadfast Broker Technical Manager, Michael White, says any physical property needs to be reviewed to ensure the sum insured is correct. “There are online tools you can use to calculate the replacement cost for buildings,” he says. The sum insured needs to be the replacement value of the building, not its market value.

White adds that ideally, a valuer or a quantity surveyor should be used to prepare a more detailed calculation. “Don’t just pluck a sum out of the air, which is what many people do,” he says. “And don’t just roll over the figure that you had from the previous year and add a minor increase for inflation. The costs of building works are going up significantly and this needs to be reflected in your insurance cover.”

There are risks to undervaluing your property or not increasing the amount you insure it for, he says. “The main one is that in the event of a catastrophe, such as a fire, you won’t have enough cover to rebuild.”

Your Steadfast broker can help ensure your insurance cover will protect you in the event you need to make a claim. Contact us today to find out more.

Important notice – Steadfast Group Limited ABN 98 073 659 677

More businesses are embracing the principles of the circular economy in the pursuit of better environmental outcomes and as part of the push towards a net zero economy by 2030. Insurers are working alongside these businesses to support their efforts to achieve a clean, green future.

HOW ARE INSURERS SUPPORTING THE CIRCULAR ECONOMY?

The circular economy is a business model through which manufacturers consider the whole of a product’s life cycle, or multiple life cycles, during design. The idea is to maximise a product’s use through recycling and refurbishing, to help reduce the use of natural resources.

AXA is one insurer that is becoming an active participant in the circular economy. It has said, “our ambition is to be the collaborative economy’s principal partner.”

To this end, since 2015 it has been the global insurance provider to the BlaBlaCar car sharing platform and it has subsequently provided cover to other businesses that are part of the sharing economy, including OuiCar, Uber and Deliveroo. AXA cites Ernst & Young research that indicates one shared car can replace between 9 and 13 individually owned vehicles as evidence to support its foray into this area.

The insurer says, “the circular economy offers an opportunity to insure new activities related to product disassembly, refurbishing and recycling, as well as to imagine new kinds of insurance to promote the circular economy.”

INSURANCE SUPPORTS NET ZERO

The insurance sector is also an important contributor to the move towards a net zero emission economy and the circular economy is part of that.

Eight leading insurance companies including AXA and Allianz have formed the Net Zero Insurance Alliance to work towards net zero greenhouse gas emissions by 2050. Insurance and reinsurance companies recognise they have an important part to play in achieving the transition to net zero emissions economies. Many have ratified the Paris agreement, which is an international climate change treaty to keep limit global warning to two degrees Celsius above pre-industrial temperatures.

BETTER ENVIRONMENTAL OUTCOMES AFTER DISASTERS

Insurers are exploring other ways to achieve better environmental outcomes after a claim. Insurable events and natural disasters often involve significant damage to property. They increasingly want to make sure materials are disposed of in an environmentally-friendly way and recycled where possible.

An Insurance Council of Australia (ICA) spokesperson explains residential waste removal and disposal is a key part of the overall claim cost. “By working with suppliers across the claim supply chain, insurers can contribute to a broader level of decarbonisation beyond their own operational footprint.”

If you need to make a claim on your insurance policy, it’s important to contact your insurer who can provide guidance about safe and environmentally-friendly disposal of rubbish and other damaged goods. Your AIB Insurance broker can assist you through this process.

Important disclaimer – Steadfast Group Limited ABN 98 073 659 677, its subsidiaries and its associates.

The views expressed are those of the author only and do not necessarily reflect those of Steadfast.

This magazine provides information rather than financial product or other advice. The content of this magazine, including any information contained on it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.

Information is current as at the date articles are written as specified within them but is subject to change. Steadfast, its subsidiaries and its associates make no representation as to the accuracy or completeness of the information. Various third parties, including Know Risk, have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.

Mould is invariably associated with damp conditions. Australia has experienced its fair share of those in the summer of 2021-22, with widespread flooding across Queensland and northern NSW as well as scores of soggy days elsewhere around the country.

WHY YOU CAN’T INSURE AGAINST MOULD DAMAGE

April 2022, for instance, saw many sites in greater Sydney record rainfall totals equal to 150 to 250 per cent of the April average. Some suburbs received a bucketing that was close to, or more than, their April monthly average, in a single day.

Outbreaks of wet weather mould can damage your property, fixtures and fittings. Unfortunately, that type of damage is unlikely to be covered by your property and contents insurance. Most policies exclude mould damage as a matter of course. That’s because the damage caused by mould can be minimal if it’s addressed promptly. As such, outbreaks are considered to be preventable events.

COLLATERAL DAMAGE

It can be a different story though if mould damage is associated with another claimable event, such as flooding or water ingress, according to Steadfast Group’s Broker Technical Manager, Michael White.

“While policies may exclude mould damage per se, the individual circumstances of your claim will determine whether the damage is covered,” White says.

“If your house has suffered cyclone damage, for example, and has been locked up, then a mould outbreak that has occurred as a result would likely be covered as part of that claim. Or if the pipes in your house burst while you’re on holiday and there’s water running through the property for an extended period of time, any mould damage associated with that event should be covered,” he says.

If, however, you have suffered a mould outbreak merely as a result of moisture in the air, the cost of replacing damaged items will inevitably be on you.

TAKING PREVENTATIVE MEASURES

Prevention is always better than a cure. There are steps you can take to reduce the incidence of mould outbreaks in your property and to remediate them effectively when they occur.

They include opening windows and doors to air out damp rooms, wiping hard surfaces with detergent, white vinegar or a commercial mould removal product and sponging soft furnishings with white vinegar or baking soda before drying them out thoroughly.

It’s also important to attend to any underlying causes of mould as soon as a problem is detected. This includes leaky showers, pipes and ceilings and structural issues such as rising damp.

COVER WHEN IT COUNTS

The right insurance cover will help you safeguard your personal and business assets, in the event of damage or loss. If you haven’t reviewed your policies for a while, now is a great time to consider whether the cover you have is appropriate for your needs. Contact your AIB Insurance broker today if you’d like to review yours.