What is an El Niño?
Australia’s climate is influenced by two alternating weather patterns, La Niña
and El Niño.
These weather patterns are measured by the Southern Oscillation Index,
which records interactions between the atmosphere and the ocean air.
An El Niño event involves sea temperatures becoming warmer than the air
across the central and eastern Pacific Ocean. El Niño is characterised by lower
than average rainfall, higher and more extreme temperatures and higher fire
danger.
Bushfire events often occur during the El Niño cycle, with the Ash Wednesday
fires in 1983 and the major bushfires of 2002 to 2003 and 2006 and 2007
taking place during El Niño periods. The bushfires that happened in 2019, up
until August that year also took place during an El Niño event.
El Niño is only one of a number of different variables that influence the
climate and the weather. Barometric pressure and local geography are just two
of the other factors that come into play.
An understanding of weather patterns enables businesses whose operations
are influenced by weather such as agriculture, construction and tourism to
plan ahead, so when reasonably predictable weather events occur, they are
prepared.
“El Niño—which means ‘the
little boy’ or ‘the Christ child’
in Spanish—is part of the
most influential natural
climate pattern on the Earth,
the El Niño-Southern
Oscillation, usually referred
to as ENSO”
Insurance Information Institute, What is El Niño and why is it important? 2022
Did you know?
Many businesses think it won’t happen to them but statistics show otherwise. In fact:
$2.46bn
The normalised cost of claims related to
the 1983 Ash Wednesday bushfire.
(Insurance Council of Australia, Historical
Catastrophe List, 2022)
$2.32bn
The cost of claims related to the 2019/20
bushfires in NSW, Queensland, Victoria
and South Australia.
(Insurance Council of Australia, Historical
Catastrophe List, 2022)
$839m
The normalised cost of claims related to
the 2003 Canberra bushfire.
(Insurance Council of Australia, Historical
Catastrophe List, 2022)
What insurance should you take out – and what can it cover?
It’s important for businesses to understand how their insurance cover could respond in the event of weather events
caused by El Niño such as bushfires.
Type of cover | Potential benefit |
|---|---|
| Business Pack | Helps safeguard your business premises and contents against:
|
| Motor Insurance | Takes care of your valuable business vehicles with cover to help:
|
| Workers Compensation | Covers the cost of your employees’ wages, rehabilitation and medication if they become sick or injured through their work. |
Limits, excesses and
exclusions
Policy exclusions, the excesses you need
to pay and limits of liability can vary
greatly depending on your insurer and
the requirements of your business. .
Case Study
Brian runs a water fun park in a popular tourist town. A bushfire in the area didn’t
damage his property, but his business was impacted by a prevention of access order as
authorities shut the main highway, which provided the only way into his business. As a
consequence, visitors couldn’t get to the water park and Brian had to close, suffering a
loss of revenue. Because the interruption was due to the official road closure, rather
than tourists simply staying away, he was able to make a business interruption claim to
cover his losses.
