A leading risk analytics expert has urged brokers to remind their clients about impending bush fires, as the season is set to arrive early and with increased ferocity for some regions.
“There is the potential for business-owners to be caught out by the earlier start to the fire season,” warns Peter Cheesman, head of analytics for Aon’s APAC operations.
“Brokers should work with insurance companies to support insureds to understand what proactive steps they can take to improve the resilience of their property to bushfires and encourage them to take early action,” he told Insurance Business. “Focus is obviously given to those properties located inside bushfire-prone areas, including in the regions expected to see above average activity this season.”
According to the 2018 Southern Australia Seasonal Bushfire Outlook, there will be above-normal activity across coastal NSW, south east QLD, south east VIC and south west WA.
“SMEs need to remain vigilant in keeping the areas around, and under, their property free of combustible material,” said Cheesman.
“A property only needs a single weak spot that allows embers to ignite combustible material either inside, on or near the building to cause ignition,” he continued. “Once ignition occurs, and there are no adequate suppression measures in place, a property can easily be lost.”
Ember attacks, in which burning branches and twigs become temporarily airborne and are carried upwind of a bushfire, remain the primary cause of spot-fires, which contribute to the continued spread of a bushfire – however, there are some key ways to minimise risk.
“Insureds should clear away any flammable or combustible material near the property – this includes removing any organic material from the roof, overhanging canopy, gutters or the underfloor area,” says Cheesman. “Embers tend to accumulate in the corners of the roof or deck so it’s also important to ensure these are well cleared of debris.”
Cheesman also said business-owners should seal up any areas of the property where embers have the potential to enter.
“Embers typically enter a property through the underfloor, roof eaves, roof-mounted external air conditioners or windows without metal fly screens,” he said.
Determining the risk of ignition from nearby combustible structures such as outbuildings, neighboring buildings, fencing or decking is also important.
“The more potential sources of ignition nearby, the greater the risk of ignition,” says Cheesman. “Also, determine the risk of ignition from combustible elements of the property such as roof eaves, facades or fascia features – the more features, the greater the risk of ignition.”
Despite the high-risk facing SMEs, Sharon Cannon – a branch manager with Gallagher – said underinsurance remains a major issue for the cohort.
“Underinsurance of farm buildings and commercial buildings in rural Australia is common,” she said. “But it’s a huge risk to take – particularly in areas at heightened risk of natural disasters.”
With many properties now required to comply with Bushfire Attack Level ratings, a rebuild may need to include both heat and flame-resistant measures.
“This can significantly increase rebuild costs, so all property owners need to factor these costs into their insurance policies to make sure they are not underinsured in the event of a bushfire-related incident,” said Cannon.