Wednesday, May 27, 2020

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Insurance Implications for Altered Operating Models: 3 Key Actions for Business

Severe storms, devastating bushfires, hailstones the size of golf balls and a global pandemic - enterprises across Australia have faced a challenging six months to say the least. For many, securing long term survival has demanded rapid changes to operating models. We’ve seen bricks and mortar retailers shift to online trading tycoons, and boutique brewers reinventing their production to meet hand sanitiser shortages. Adaptation in all its glory!

While such measures taken by businesses have been nothing short of impressive, ‘innovation at pace’ can also place organisations under heightened risk. Via live webinar on May 21, Honan leaders Travis Wendt, Poppy Foxton and Brad Tymmons addressed Insurance Implications for Altered Operating Models, with 3 key recommendations as follows:

1. Revisit your risks - have they changed?

The pace at which businesses have adapted has also increased the potential for non-realised risks and exposures across (but not limited to) financial, regulatory, client service & engagement, technology and workplace. For example, a business shifting to an online trading platform must now address risks associated with cyber crime and threats, particularly the protection of customer and third-party information.  Furthermore, with many workforces now operating remotely, businesses are legally required to extend their safe working environments; from an often previously ‘physical office setups’ only, through to stress management and mental health.

2. Review your current insurance program

It’s important to identify and understand the impacts of other key risks on the business. These risks aren’t always easy to identify, but the following offers a helpful framework to guide your initial audit:

3. Check your balance sheet

Balance sheet protection is critical to ensuring your operations can withstand a significant ‘insurable’ event, and should be supported by three tiers of capital: Equity, Debt and Risk (Insurance). In order to remain protected, business should review the adequacy of its balance sheet protection by way of:

  • Scenario testing: identify balance sheet vulnerability and weakness
  • Analysis: what are the financial consequences of a major insurable event?
  • Prioritise: pivot your insurance program to these identified risks, prioritising those with the greatest impact on the balance sheet.

We're with you all the way.

Through this webinar and supporting materials, we’re pleased to support businesses in maintaining  adequate protection against risks, and building overall resilience. As always, we recommend close consultation with your broker to ensure your cover is truly fit for purpose. To learn how Honan can further support your business, please reach out at any time:

Travis Wendt– Head of Corporate Insurance and Risk Solutions

Brad Tymmons – Group Head of Client Engagement

Poppy Foxton – Head of Claims

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