Skip to main content

Bushfire disaster payment: How to prepare for insurance claims

The purpose of insurance is to provide protection from financial loss. Discovering your insurance fails to respond, as and where expected, in the event of a loss, can result in unwanted financial stress and ultimately may result in business failure. 

In the period of a week, Western Australia experienced the threat of both tropical cyclones and bushfire. Business leaders have already ranked weather events as their number one risk by likelihood. When devastating losses like the 2019/2020 Australian bushfires occur, this should serve as a reminder to policy holders to review their business insurance to ensure it reflects the risk profile and will effectively transfer risk. 

What are potential sources of bushfire insurance loss? 

Significant property damage, power interruption, prevention of access and supplier and customer interruption due to bushfires are likely sources of Business Interruption and loss. Managing a claim can take you away from your business focus; whether that be reopening or rebuilding. 

Does insurance pay for arson? 

Arson is typically covered to the extent that the insured is not party to the arson and there is not a specific exclusion under the policy. 

Getting claim ready

Responding and navigating the claims process is complex and challenging. Here are some general tips to ensure it’s as smooth as possible: 

  1. Know the process. Ensure you are clear about the process and what is required of you. If you don’t understand something, ask your broker or insurer and ensure you are satisfied with the response. 
  2. Check your critical policy conditions such as dates and times for the notification and/or presentation of claims. This information is on your policy paperwork. If your paperwork is damaged, destroyed or inaccessible, contact your insurer or broker who can provide these details. 
  3. You are responsible for proving your claim. The onus is on you to fully document and evidence your claim. 
  4. Detail matters. The quality of claim presentation and supporting documentation is critical to a successful settlement. Ensure that all documentation passed to insurers is accurate. 
  5. Communicate, communicate, communicate. Keep insurers’ experts informed of progress throughout the period of the claim. 
  6. Your claim may take time. Due to the significant losses, claims assessors and loss adjusters will be reviewing a much larger number of claims than usual. Complicating what is already a difficult situation, there are challenging logistics of accessing affected areas. 

Insurance policies can cover claims preparation costs

 The vast majority of policies will cover the costs of retaining your own expert to prepare and submit your claim. Your own claims preparation expert will:

  • Advise on strategy/policy response
  • Quantify the financial impact
  • Prepare detailed & documented submissions
  • Seek to maximise the settlement outcome and reduce delays 

Tips for insurance claims documentation

Proper documentation is vital to achieving the best possible outcomes. We’ve compiled our top ten tips:

  • Document as you go. Organise the systematic collection of information as it becomes available - searching through historic files at the end of the claim is harder and important elements may be missed. 
  • Photograph any damage. Collect reports, drawings, photographs as appropriate to adequately establish the nature and extent of all loss and damage sustained. Fully document (video or “still” photograph) the damaged property, plant and equipment. 
  • Conduct a detailed stock take or reconciliation of plant and equipment to ascertain damaged assets. 
  • Do not remove any damaged property, plant and equipment until viewed in situ by loss adjuster, unless necessary (i.e. due to safety, to reduce further damage, to recover). If the property, plant and equipment needs to be removed place in temporary storage, do not throw out. • Document best and worst case loss and cost estimates as soon as feasible so they can be provided to your insurer to assist with your claim. Make sure you consider the long-term business impacts. 
  • Advice and quotes should be provided in writing. Retain damaged assets to assess the extent of the damage (repair v reinstatement) and to obtain a quotation for the recommended response.
  • Consider what steps can be taken immediately to either stabilise or temporarily repair assets. 
  • Document conversations. Document all conclusions of discussions and action points arising from each meeting, leaving no room for misunderstandings or incorrect assumptions.
  • Support all costs with appropriate documentation such as purchase orders, work orders, invoices, time sheets, service contacts and material requisitions. Justify business continuity decisions (i.e. alternative suppliers or relocation of offices) with all relevant documentation. This might include emails, meeting minutes etc. 
  • Record all lost sales opportunities in writing immediately. The ability to prove a reduction in turnover may rely on your ability to identify sales impact. 
  • Track time spent on claims. Ensure that all the time spent by company employees on claim related activity is properly recorded (including details of the work carried out), this has particular relevance for overtime, temporary employees and casuals. 

What is a Loss Adjuster and what is their role?

Loss Adjusters and other insurer appointed experts act for insurers to assist with quantifying the size of the loss and managing the claim. They are paid by the insurer.

We recommend that you discuss with the loss adjuster all material costs prior to them being incurred and on key decisions, such as reinstatement methods, mitigation expenses, time lines. Ensuring loss adjusters understand and appreciate the circumstances and uncertainties can provide greater clarity and may reduce the possibility of disagreement as to whether the policy will respond. 

As they become apparent, communicate any problems with any suppliers, timetables or work schedules to the loss adjuster immediately, and include them in the problem solving process. 

Marsh Claims Solutions 

Our Claims Solutions team seeks to deliver a seamless claims experience from initial strategy and evaluation of a loss right through to the presentation, negotiation and optimal settlement of the claim. We focus on maximising insurance recovery whilst avoiding unnecessary delays. We are a multidisciplinary team of Claims Professionals, incorporating claims advocates and claims preparers. 

We have travelled the road to recovery hundreds of times to assist clients with ensuring that claims are prepared accurately, submitted in a timely manner and advocated strongly to get positive outcomes. 

Need help now? Contact us here.

The information contained on this page provides only a general overview of subjects covered, is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Insureds should consult their insurance and legal advisors regarding specific coverage issues. All insurance coverage is subject to the terms, conditions, and exclusions of the applicable individual policies. Marsh cannot provide any assurance that insurance can be obtained for any particular client or for any particular risk.

LCPA: 21/024

Luke Stratford

Head of Claims Solutions, Marsh Advisory, Property Risk

  • Australia

Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from JLT Risk Solutions on request. Full information can be found in the JLT Risk Solutions Financial Services Guide.”