The National Insurance Brokers Association (NIBA) has recently pushed Australian state governments to shift focus on natural disasters, moving from response and recovery to management and mitigation.

This was outlined as part of the association’s submission to the Productivity Commission natural disaster funding inquiry.

Disasters have the propensity to substantially impact businesses, requiring interruption policies to dimish the high recovery costs involved. Changes at the government level with a focus on mitigation could make disaster recovery far easier.

“Insured losses occur in the built environment, where governments and government agencies have an influential – and often controlling – interest in the nature, extent and level of development,” the NIBA submission stated.

The submission went on to outline how current funding for natural disasters came from the federal government, and requested that this change  should spread across all levels.

“This would suggest an important, ongoing role for the Council of Australian Governments.”

The National Commission of Audit (NCOA) also recently outlined the necessity of disaster management at both government levels, and explained how initial zoning and planning needs to account for natural disasters, and the effects they have on property and assets.

“Individuals and businesses who build and manage the assets most likely to be affected by natural disasters should, as much as possible, act in a prudent fashion by seeking appropriate levels of insurance,” the NCOA report stated.

The NOCA used the example of Cyclone Tracy, the storm in 1974 which caused millions of dollars worth of damage and wrecked Darwin. They claimed the storm exposed inadequacies in Commonwealth disaster response.

With a stronger focus from governments on disaster mitigation, the insurance costs would likely be reduced substantially. In addition, the recovery issues for businesses would be mitigated.