Insurance Review
RISK TRANSFER
Review insurance policies for coverage against physical impacts of climate
According to a recent estimate, only 43% of the global overall losses (US$280 billion) to natural disasters in 2021 was insured. While losses within the Asia-Pacific region have remained modest at 18% of overall losses, the insurance gap was still extremely high at 83%.
With natural calamities, such as floods, occurring more frequently due to the effects of climate change, SMEs should review their business insurance coverage to ensure that their interests are adequately protected for.
Having insurance can protect your business’s equipment, structure, income, as well as your livelihood from severe damage.
Ensure that you have adequate coverage to pay for the indirect costs of the disaster, which includes the disruption to your business and the cost of repair or rebuilding.
For a business, the costs of a disaster can extend beyond the physical damage to the premises, equipment, furniture and other business property. There is the potential loss of income while the premises are unusable, and possibly the extra expense of keeping the business going at a temporary venue.
Make sure the policy limits are sufficient to cover your company for more than a few days. After a major disaster, it can take much longer than many people anticipate to get a business back on track.
Ensure that you have adequate coverage to pay for the indirect costs of the disaster, which includes the disruption to your business and the cost of repair or rebuilding.
For a business, the costs of a disaster can extend beyond the physical damage to the premises, equipment, furniture and other business property. There is the potential loss of income while the premises are unusable, and possibly the extra expense of keeping the business going at a temporary venue.
Make sure the policy limits are sufficient to cover your company for more than a few days. After a major disaster, it can take much longer than many people anticipate to get a business back on track.
Insurance products
There are several insurance products that may be suitable for SMEs to insure against physical risks of climate change. Some examples include:
Property Insurance
This type of insurance policy covers the physical assets of a business, such as buildings and equipment, against a variety of risks, including natural disasters.
Business Interruption Insurance
This type of insurance policy can help a business recover from financial losses that result from a natural disaster or other event that disrupts operations.
Flood Insurance
This type of insurance policy covers damages caused by flooding, which can be a common risk in many parts of Southeast Asia.
Transportation Insurance
This type of insurance policy covers the risks associated with transporting goods, including losses or damages due to natural disasters.
It is worth noting that the specific coverage offered by these insurance products may vary depending on the location and the specific policy. It is always a good idea to carefully review the terms and conditions of any insurance policy before purchasing it.
Role of Management
