Australian summers can bring long stretches of extreme heat. For many businesses, the biggest risk isn't the heat itself but what comes with it: power outages, overloaded equipment and stock that can't be kept cold.
Cafes, restaurants, food manufacturers, pharmacies, florists, medical practices and retailers that keep chilled or frozen goods are especially exposed. Here's what to look out for, and how insurance can help.
How heat and outages cause losses
Stock spoilage. When refrigeration fails, food, medicines, flowers and other perishable goods can spoil within hours.
Machinery breakdown. Air conditioners, coolrooms, compressors and production machinery work harder in hot weather and are more likely to fail.
Electrical damage. Power surges when supply is restored can damage motors, computers and electronic equipment.
Lost trading time. If you can't open, cook, produce or keep premises at a safe temperature, you lose income.
Covers worth knowing about
Deterioration of stock
This section, often found in business packages, can cover stock that spoils because refrigeration breaks down or the power supply fails. Policies differ on whether they cover failure of the public power supply, how long the outage has to last, and what limit applies, so it's worth checking the details.
Machinery breakdown
Machinery breakdown cover can pay to repair or replace machinery and equipment that suddenly breaks down, including coolrooms, compressors and air conditioning plant. It's different from fire or damage cover, which usually doesn't cover mechanical or electrical failure.
Electronic equipment
Electronic equipment cover can help with damage to computers, point-of-sale systems and other electronics, including damage caused by power surges.
Business interruption
Business interruption cover is designed to replace lost gross profit after insured damage. Some policies extend this to losses from machinery breakdown or a failure of the power supply. Check whether these extensions are included and what waiting periods apply.
Practical steps before the hot weather
Get refrigeration and air conditioning serviced. Regular maintenance can reduce breakdowns, and insurers may ask about it at claim time.
Use temperature monitoring and alarms. A simple alert to your phone can give you time to move stock before it spoils.
Have a plan for outages. Know who to call for backup refrigeration, a generator or a refrigerated trailer, and where stock can be moved.
Protect electronics. Surge protection and an uninterruptible power supply can help protect computers and point-of-sale systems.
Keep good records. Stock lists, invoices and temperature logs make a spoilage claim much easier.
Look after your team. Plan for safe working temperatures, breaks and hydration on very hot days.
If you have a loss
Keep spoiled stock until the insurer says it can be thrown away, or take clear photos and a detailed list if it has to go for health reasons. Keep repair reports and invoices for broken equipment, and contact us as soon as you can. Our claims page has more on the process.
How we help
We've been broking since 2005, and we work with businesses Australia-wide. We can check whether your policy includes deterioration of stock, machinery breakdown and electronic equipment cover, explain how power outages are treated under your policy, and adjust your cover to suit your business.
Get summer-ready
If you'd like us to check your cover before the hot weather arrives, call us on (03) 9078 6473, email info@mminsure.com.au or contact us to arrange a review.
