Occasionally, stories arise that put the threat of nature into perspective. Currently, the most powerful tycoon of 2014 is making its way towards the coast of Japan, with swirling winds of up to 160 miles per hour leaving people and businesses waiting for the inevitable, according to ABC.
The news provider said communities are expecting for the worst and preparing as best they can for heavy rain, strong winds and mudslides over the next few days.
With so much of Australia’s metropolitan areas on the coast and susceptible to the sea, it can be easy to forget the importance of protecting a business from a range of natural disasters.
How appropriate, then, that mitigating for disasters has recently come under the spotlight, with experts calling for a restructuring to further strengthen the protection of business insurance.
In late September, the Productivity Commission released a report that called upon the federal government to increase its funding five-fold to help mitigation.
State mitigation funding currently sits at around $40 million annually, with the commission recommending that this rises to $200 million, Insurance & Risk Professional reports. The commission said that the balance is currently too focussed on rebuilding after a disaster than it is preventing future ones.
Specialised business interruption insurance
In the report, Commissioner Karen Chester said the way disasters are mitigated in the current system resembles Groundhog Day.
“We heard many firsthand accounts of assets repeatedly damaged by successive natural disasters, only to be rebuilt in the same location and to the same standard,” she explained.
Insurance Council of Australia (ICA) CEO Rob Whelan said business interruption cover can be used in a more sustainable way to provide support after a disaster, with insurance brokers relied upon to find a balanced approach.
“Australian governments have traditionally been too focused on handing out billions of dollars in an ad hoc manner following a disaster rather than looking at the long-term benefits of investing in permanent mitigation infrastructure to protect vulnerable communities,” he said.
“The ICA agrees land use planning does not always incorporate natural disaster risk, and more attention should be paid to regulations and codes that govern the built environment.”