A New Zealand Manufacturers and Exporters Association (NZMEA) survey of manufacturers in the Canterbury region has identified business interruption as the biggest insurance problem for firms after the earthquakes. The survey was conducted between the 13th and 17th of February.
The survey asked respondents to rank their insurers from ‘very good’ to ‘very poor’ on overall performance, rolling over policies, material damage and business interruption, as well as collecting comments.
Business interruption claims received the worst rating with half of the respondents reporting their insurer had been ‘very poor’ and only 20 percent giving a positive rating. Insurers rated the best in rolling over policies with half of all respondents ranking them positively.
NZMEA Chief Executive John Walley says, “The indemnity period for business interruption ran out on February 22nd for half of the firms surveyed so it is not surprising business interruption was the biggest issue.”
“The comments centred on payments being too slow making it difficult for firms to meet costs, and fine print making it difficult to substantiate a claim. Delays in dealing with material damage mean that repairs, and the business lost while they occur, will occur outside the business interruption indemnity period for some firms. There is a view that the indemnity period should be extended in these cases and there is some talk of legal action if insurers do not comply.”
“It is pleasing to see policies getting rolled over, even if premiums and excesses are increasing, and it is noticeable that where insurance companies have communicated the reasons for delays then they have tended to enjoy better ratings,” says Mr Walley.
“It is important that this performance improves and insurers start to take on new risks so that firms can get back to focussing on their own activity rather than building and insurance distractions.”