Chris Jackson of 1800flood.com.au said that, broadly speaking, the insurance industry is failing to act quickly to claims of water and flood damage. This delay is contributing to substantially higher losses and business downtime, which in extreme circumstances risk sending a business broke.
“Aside from being caught up in a social media or cloud scandal, there is probably not much worse for SME business owners than discovering your office has flooded with water,” Mr Jackson said.
He said the natural first reaction of any business owner, and indeed any building manager, is to call their insurance provider. But the days it takes many insurers to respond is not only making water damage worse, but also costing businesses more in lost trading.
“The longer the issue takes to resolve, the longer your company is out of action,” said Mr Jackson.
“Within just four days, the entire structure is contaminated with mould, soft surface materials have started to swell (which means more costs to replace those items) and hard surface materials will take longer to dry and return to a dry standard.
Mr Jackson hit out at the industry after seeing cases time and again of businesses finding themselves at the mercy of insurers dragging their feet.
“[For example,] upon checking out Westpac Insurance’s terms and conditions, it appears it could take up to four business days for them to confirm your claim and ‘whether a claims assessor will be making an inspection of the loss or damage’. So, it may take even longer for them to actually act on the situation,” he said.
However, a spokesperson for Westpac said the bank only provides insurance to retail customers, not businesses.
Mr Jackson also attacked the opening hours of insurer claims departments for contributing further to the delays, noting that some like Youi Insurance are closed altogether on weekends.
According to the Youi Insurance website, the claims department is open briefly on Saturdays, however its 6am to 9.30am hours are highly restrictive for making a claim.
To minimise the damage to both the premises and equipment, as well as lower business downtime, Mr Jackson urged businesses to engage an insurance-accredited repairer as soon as possible to fix the damage and sort out the insurance reimbursement once you have resumed trading.
Providing the policy terms allow this, it could save a great deal of time. Taking dated photos of the damage could also assist with proving a claim.
“It’s less costly to act immediately on the flood water, get it out as soon as possible before more damage can occur, and then think about contacting your insurance company to start their lengthy process,” he said.
The warning also comes as a timely reminder to check existing policies for the exact nature of coverage, given that an NRMA Insurance branch found itself uninsured following a major flooding incident in 2016.