I’ve run a small business from home for the past 6 or 7 years, in various forms. I thought I had a good handle on the various risks that could be involved with running a business, such as IR35 legislation in the UK, through to Public Liability, Professional Indemnity and of course Safe Workplace risk reduction and things like that.
I also have in place Life Insurance and Permanent Total Disability Insurance along with Income Protection Insurance. All these are of course good things to have in an uncertain world, to ensure your income is at least somewhat maintained if something awful should happen that means you can no longer work.
But, one form of insurance I never considered was Business Continuity Insurance. I figured that since I was running a small business that consisted of myself and my wife and we were both had life cover, and TPD cover that we’d covered off every eventuality. Of course, hindsight suggests you can never cover off every eventuality and there was one consideration we certainly missed. Which is where, Business Continuity Insurance could have stepped in.
Now, I am NOT an insurance expert, and I have no affiliations with any either. If you read this article and decide you ought to look into Business Continuity Insurance or covering off the aspects of business interruption I’m about to talk about, then you MUST speak to your Financial Advisor or Legal Advisor or Insurance Broker to find the best cover that’s suitable for you.
February 7th 2009. Anyone reading from Australia will probably know where I am heading with this. At about 4pm that afternoon our world went black, sooty, and very very hot. We’d moved all our important data and documents into a safer place just in case the Victorian Bushfire that approached that day, and made the headlines for weeks and months afterwards, came to get us.
The bushfire itself passed by us. We were one of the lucky ones. We watched it burn all around us for the night, and we waited for it to come through, but somehow we were protected. It was the weeks and months afterwards that affected us more than the fire itself. Being self employed in a local community that is devastated by natural disaster means that even though you’re not physically affected there are a myriad of reasons why you’re emotionally and financially affected. And, being in business means you’re extremely unlikely to receive any Government help because they cannot be seen to be giving an advantage to a business in the natural disaster zone over one which is outside the zone.
That’s what we found. There was almost no assistance for business after the Victorian Bushfire. This isn’t in any way a criticism of the Victorian or Federal Government, I understand the reasons their hands are tied. They did help us out personally, and Business Mentors were provided to help us navigate a way through, but there was no assistance financially to help us get through. Why does this matter?
There was no power for the first week.
The police had closed the road for weeks after the fire, so they could control who had access to and from the area.
We were not mentally capable of concentrating on business aspects for MONTHS.
A number of our clients lost everything and no longer wanted what we offered.
So for months we had little to no income, and little interest due to the emotions of the event for generating an income. As a result, over a year later we’re still playing catch up. Credit cards are maxxed – mortgage is maxxed – a number of key assets have been sold in order to meet the commitments. It’s not pretty.
We NEVER considered that we’d be caught up in a natural disaster. And if you’re thinking ‘Its ok, even if we are in a natural disaster, the Government will look after us’ then think again if you’re in business. If you’re in business it’s YOUR responsibility to plan for the unplannable. Aid agencies and governments quite rightly focus on the citizens of their jurisdiction. Business will not be given a leg up because, at least in the Western Capitalist world, there is international trading legislation which forbids subsidies to most businesses – and that’s how the legal eagles see financial assistance such as this. And to be honest that’s only right and fair. If you take the bounty when times are good you have to take the pain when they’re not.
If you’re running a small business, whether it be from home or an office, you really do need to consider Business Continuity Insurance so that if the worst happens, you won’t end up falling (too far) behind. If we could do it again, we’d have had Business Continuity Insurance on Feb 7th.
I’d like to say a very public thank you to New Horizons Whittlesea church, The Salvation Army, Combined Churches of Whittlesea and Linfox and the Clayton Bushfire Relief Warehouse because without each of these, our family would be out on the street now with no home to live in.