Retailers preparing for insurance claims: business interruption and flooding events

Written by Luke Stratford, Marsh Australia

It has been a year of risk. Keeping the doors open for business has been a constant challenge.

Many retailers have faced interruption due to either COVID-19, or another event such as the devastating floods experienced across parts of Australia. On top of revenue and cash-flow issues, bills have only kept piling up and resilience has truly been tested.

Impacted retailers have likely suffered financial loss from property damage, interruption to normal operations, supplier interruption and, in some cases, prevention of site access. 

During these difficult times, managing claims can take retailers away from their focus – whether that be reopening or rebuilding.

So how can retailers better position themselves to prepare for and respond to these claims?

Practical advice to prepare for flood claims
  • Record what happened: fully document via video and/or photo the sequencing, if possible, and damage to property, plant and equipment. 
  • Identify the source of the damage: collect reports, drawings and photos as appropriate to adequately establish the source and nature of damage. 
  • Do not remove any damaged plant and equipment: until viewed in situ by the loss adjuster, unless necessary, for example, due to safety, to reduce further damage or to recover. If plant and equipment needs to be removed, place in temporary storage, do not dispose.
  • Conduct a detailed stock take or reconciliation: of property, plant and equipment to ascertain damaged assets and loss sustained. 
  • Repair or replace considerations: utilise suppliers of damaged assets to assess the extent of the damage, including their recommendations for stabilising or temporarily repairing assets. Advice from suppliers should be provided in writing.

Read Marsh’s complete list of top claims tips for floods.

Getting back in business following business interruption

Despite retailers now having experienced over a year of COVID-19 restrictions in varying degrees, a large number of eligible businesses are still yet to explore whether they have a recoverable claim for business interruption losses.

For those policyholders who may still have business interruption losses to notify, Marsh recommend prioritising a review immediately. 

To determine whether retailers are eligible to instigate a business interruption claim under the insured’s policy, consider the below:

  • Do you think your business has suffered a loss due to COVID-19? Has there been a downturn in your revenue or business?
  • If ‘yes’, review your business interruption policy’s:
    o insuring clauses, particularly any extensions that may apply. If unsure, reach out to your insurance broker or advisor for guidance and clarification;
    o exclusions; and
    o limits and sub-limits.
  • Consider and collect information on relevant facts in respect of:
    o nearby outbreaks at business locations (if relevant);
    o what official orders or decisions have been made that have impacted your business operations? When and how long were they in place?
    o details of financial losses.
  • Consult with your insurance broker to:
    o notify insurers immediately if there is a possibility of a claim;
    o determine/clarify the value of the claim and guidance for next steps; and
    o conduct coverage assessment.

Read Marsh’s full article on Claims considerations for Business Interruption Insurance.

For more details and guidance on property, business interruption insurance and flooding claims, contact Marsh today by completing the contact form on the ARA Insurance page.

Looking for insurance and risk management solutions tailored to retail?

ARA Insurance is a unique insurance program for members harnessing the industry experience of the ARA and the risk management expertise of global leading insurance broker, Marsh.

As a member benefit, ARA Insurance members can receive a free 30 minute insurance risk consultation with Marsh. Premium members also receive a complete risk analysis report.

To access this benefit, or for further information, please complete this form and an ARA Insurance representative will contact you to schedule your consultation.



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This article contains general information and does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. Any advice is general in nature only and is provided by Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (‘Marsh’). Marsh arrange this insurance and are not the insurer. For full details of the terms, conditions and limitations of any covers and before making any decision about a product, refer to the specific policy wordings and/or Product Disclosure Statements available from Marsh on request. The Australian Retailers Association (ARA) receives a financial benefit when an insurance policy is arranged by Marsh for ARA members. © 2021 Marsh Pty Ltd. All rights reserved. LCPA No. 21/169.



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