Your 2024 guide to preparing for natural disasters and flood relief for small businesses

This updated 2024 Guide addresses both: 

• the need for companies to be prepared for natural disasters, and  

• what current relief is available for small businesses in the wake of the regional Victoria and South East Queensland floods.

There is no doubt that Australia – along with other nations – has grappled with severe weather events over the past few years, arguably as a result of the increasing effects of climate change. In late 2023 and early 2024 we have yet again witnessed extreme weather events in both regional Victoria and South East Queensland with severe flooding and the fallout from tropical cyclone Jasper (13 – 28 December 2023) and the continued impact of cyclone Kirrily (January 2024). Western Australia also experienced extreme flooding in early 2023, following ex-tropical cyclone Ellie. 

In the immediate aftermath of an event, businesses will naturally be focused on clean-up, survival and crisis management, including supply-chain issues and business viability. However, in the longer-term the focus will then switch to ensuring financial security and assessing business impacts, including damage to markets and client base. It is vital that all companies have a Disaster Recovery Plan in place. This ensures that a company can quickly mobilise under pressure, stabilise and return to operations and ultimate recovery. 

Seven key takeaways and practical steps you can take: 

1/ Disaster Recovery Plan - Have a Disaster Recovery Plan in place and ensure that this is reviewed, and updated, on an annual basis to address any changed business circumstances. 

2/ Business Insurance - Have an adequate business insurance policy in place which addresses all the known risks to your business. If your business cannot be insured against flooding (for example) because you are in a flood-prone area, ensure that you are aware of this, and have sufficient capital in the bank (at least 3 months’ worth of business costs) to ensure business viability. 

3 / Reserve capital fund – Set aside capital solely for natural disasters. At a minimum, this should equate to 3 months’ worth of the costs of running the business, to get you back on your feet. Ensure that this capital is retained in a separate business account, only to be accessed in the event of an emergency ie. separate from the day-to-day costs of running the business. 

4 / Employment agreements – Ensure employment agreements are in place with temporary staff who you may need to call upon on a casual basis. Ensure that your employment agreements with your permanent staff are also clear on their obligations following a natural disaster / force majeure event. 

5 / Supplier agreements – Ensure that these agreements are clear when it comes to supply and distribution obligations following a natural disaster. Consider putting agreements in place with back-up suppliers if you believe this will be required. If these back-up suppliers are located in different States, you will need to ensure that the agreements take into account the laws of that particular jurisdiction. 

6 / Data protection – Ensure that your business data is regularly backed up and that your client’s personal details are protected and stored securely.  

7 / Know your rights – Ensure that you are aware of your rights under your insurance policies. Ensure that you are also across all government financial support and grants in the event of a natural disaster, to ensure you are getting all the help you need and are entitled to. As always, if you are unclear on your rights, or your business obligations, ensure that you seek professional legal advice.

Note, the generic information provided in this Guide is applicable to all businesses regardless of whether you have experienced a natural disaster.  

Recent severe weather events highlight the importance of disaster-prepping your business so that you can respond rapidly and efficiently when a natural disaster event does occur.