Minimising the cost of bushfires

Parts of Australia have already experienced an early start to the bushfire season.
Posted on October 30, 2015 in Business, Farm & Crop

Is your business financially protected against the threat of bushfires? With regions across the country at a higher risk this season, obtaining the right insurance is particularly important for farmers. As it can be difficult to prevent and control bushfires, it is essential to protect your assets such as farm vehicles or crops.

Utilising a broker that understands the needs of a farm can help create an insurance package tailored to your risk.

Higher bushfire risk this season

"Victoria is not used to large bushfires in October."

According to the latest hazard report by the Bushfire and Natural Hazards Cooperative Research Centre, the upcoming 2015-16 season has a higher risk.

In particular, southern parts of the country face a high risk for bushfires, however there were various blazes across the country over the past year. This "above normal" risk is also extended to Victoria, largely caused by a lack of rain and overall dry conditions.

The research centre attributes this risk to a particularly strong El Nino gathering over the Pacific, which results in the water having a higher temperature. Furthermore, it notes the significance of Australia's decreasing rainfall over the last decade, which has contributed to extremely dry conditions in conjunction with high temperatures.

Emergency Management Victoria notes the early start to the bushfire season, with fires breaking out in October.

"Victorians have faced significant fires in the past week, and at least two of those fires have had a serious and a significant impact," said Emergency Management Commissioner Craig Lapsley at the time.

"Victoria is not used to large bushfires in October but we are ready and have our resources and firefighters in place."

Are you insured against bushfire damage?Are you insured against bushfire damage?

What are the economic costs of bushfires?

Using data from 2011, the Climate Council estimated that Australian bushfires cost approximately $337 million annually. Furthermore, it predicts that the overall economic cost of bushfires could potentially reach $800 million per year by 2050.

As indicated by the Victorian bushfires earlier in October, Australian residents and businesses should expect an early start to the season. This is in part due to 2014 having the third highest temperatures since the research centre began tracking the data.

Bushfires can cause serious damage to a company and are difficult to prevent. However, the economic costs can be minimised through the right business insurance. For farmers, minimising the financial risk can help provide the cover your farm needs.

Using a broker can ensure your insurance package is tailored to your needs. This can include the extent to which bushfires are a risk and what is likely to be damaged. For certain farmers, obtaining crop insurance is recommended due to the potential of bushfires to cause extensive damage.