More than one-third of Australian small to medium enterprises (SMEs) surveyed as part of this quarter’s The Executive Connection (TEC) Confidence Index Survey experienced the negative effects from recent extreme weather events across the country.
The survey found 35 per cent of all respondents reported some impact from a natural disaster, with respondents in South Australia (58 per cent) and businesses with a turnover above $100 million (61 per cent) the most likely to be affected.
Nationally, loss of productivity was the greatest impact reported (17 per cent) followed by power outages (8 per cent) and absenteeism (6 per cent).
These results have highlighted the importance of business interruption insurance to ensure the organisation can quickly and efficiently recover from a natural disaster.
“What is really interesting is that one in four businesses (24 per cent) are now doing something to prepare for extreme weather events, a further 9 per cent plan to do something and 8 per cent would like to do something but don’t know what to do,” TEC Chief Executive Officer Nikki Potter said in a February 21 media release.
Ms Potter believes this shows how important it is for government initiatives to increase awareness and provide assistance for businesses of all sizes to prepare for and recover from extreme weather events.
“Of those preparing, respondents in the most affected state, SA, and those in the $1.5 million – $5 million turnover bracket, were most likely to be examining their business planning and risk management for future extreme weather events when compared to other groups,” she said.
Extreme weather events and natural disasters can also have lasting economic impacts, including significant loss of productivity. Respondents who reported being affected by these incidents felt less positively about future sales revenue (58 per cent, compared with 68 per cent overall).
If your organisation has been affected by an extreme weather event, or operates in a high-risk area, you may wish to review your business insurance policy. For more information, contact MGA Insurance Brokers today.