Lawrence Yule, Mayor of Hastings talks to business owners at Pipi Cafe in Havelock North about the recent water contimination. Photo / Paul Taylor
Opinion
Several media reports relating to the Hawke's Bay water crisis have alleged that insurance cover for some businesses 'does not kick in unless a state of emergency is declared', or 'does not apply to contagious diseases.'
Given that these media reports focused on food outlets, you would have to say
these businesses have arranged poor quality or inadequate insurance cover. The surprise of the owners at their lack of cover indicates that the limitations of their insurance policies were never explained to them.
So now the business owners are asking for compensation from government or the local council. If they receive it, it's the taxpayer who loses out, all because business owners seem to have been poorly advised by their insurance brokers. The owners need to get rid of their poor quality policies and find a quality insurance adviser.
This case highlights the need for all business owners, large or small, to spend time and effort understanding their risks, spend time finding a quality business insurance adviser, and spend time and money selecting better policies. Insurance needs to cover all sources of risk, whether physical, like lack of customers due to a health crisis, or personal, like the owner suffering a heart attack.
All possible sources of loss need to be carefully examined and contingency plans made. Policy triggers need to be understood. For example, some policies are very restrictive in that they require physical damage to the business premises. But the Canterbury earthquakes showed that businesses' premises may be fine, but loss occurs because customers cannot get there.
