An earthquake near your business premises can have devastating consequences.
Powerful tremors can destroy entire businesses, obliterate vital equipment and endanger the lives of your staff. These events are common in Papua New Guinea. In May this year, a magnitude 7.2 quake that hit to the south-east of Bulolo was felt all the way in Port Moresby. While this particular example did not cause any serious damage, it did lead to widespread power outages that impacted businesses in the affected areas.
However, imagine if a stronger earthquake hit your locality. Are you prepared financially to effectively start your business from scratch? For the majority of people, the answer to this question is no, so in this article we will show you how buying business insurance can help protect your company against earthquakes. On top of this, we'll give you some practical tips on earthquake proofing your organisation.
How does business insurance protect against earthquakes?
For businesses in PNG, there are lots of reasons to take out business insurance – protection against fire, theft and cyber attacks are just three examples. However, when it comes to earthquakes, and other 'acts of God', there are usually a few changes to the way that insurers go about offering plans.
The reason for this is simple. Take theft protection as an example – an insurer can look at the area where you operate and analyse how likely it is that someone might rob your premises. This means they can then analyse how likely it is that they will have to pay out under this clause of the policy.
However, it is very hard to predict when earthquakes will strike, and damage can occur to buildings even when they are far from the epicentre. As such, earthquake insurance is usually sold separately to a standard business policy. This means that if your premises is effected by flooding and fire following an earthquake, you will often not be covered if you do not have specific earthquake insurance.
When you have an earthquake insurance plan in place, you will usually be covered against:
- Damage to the buildings where your business conducts operations.
- Damage to the assets you and your staff use.
In addition, you may also be covered for loss of income due to the interruptions caused by the earthquake. However, this will depend on the insurer and specific policy you take out.
If you come to Trans Pacific Assurance Limited (TPAL), we will conduct a survey of your business' location to determine whether or not you're eligible for our additional earthquake insurance. From there, we will ensure you are completely aware of what damage you are protected against, what excesses exist on your policy and how the claims process works.
Additional ways of protecting your business against earthquakes
1. Conduct an assessment of your structure
Whether you are moving into a new office, or plan to stay in the one that has served you for years, it is important to know how safe it would be in the event of an earthquake. A quick Google search will show you organisations that can help you carry out this assessment.
This will show you any potentially weak spots in the construction or layout of your space, and allows you to make any necessary adjustments.
2. Create a contingency plan
An earthquake contingency plan for your business will lay out how you plan to continue operations in the aftermath of an earthquake. Among its contents could be where you plan to work from should your building be unsafe or destroyed, and will take charge for various aspects of the rebuilding process.
3. Keep copies of vital documents
Floods and fires can sweep through buildings in minutes, destroying everything in their paths. Keeping copies of documents offsite, or in water and fireproof containers is a sensible approach to ensuring you do not lose crucial information following an earthquake.
4. Conduct regular drills
During an earthquake, your number one priority should be your staff. The best way to keep them safe is to ensure they conduct regular earthquake drills in your space. This means they know where is safest to take to cover, and the quickest routes out of the building.
While all of the above can be effective it is important to realise that they are all preventative in nature. If they fail, and your premises or equipment are damaged, you will have to deal with the consequences alone. This is what insurance has over all of them – when you have a policy in place, you know that you have someone to help you financially cope with the process of rebuilding.
For more information on purchasing earthquake insurance for your business, get in touch with the experts at TPAL today.