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
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

“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:


The normalised cost of claims related to
the 1983 Ash Wednesday bushfire.

(Insurance Council of Australia, Historical
Catastrophe List, 2022)


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) 


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:
  • • damage caused by fire, storm or accidental damage
  • • equipment or machinery breakdown
  • • employee dishonesty
  • • glass damage
  • • legal issues, such as with public and products liability
  • • tax audits
  • • theft, and theft or loss of money
  • • business interruption, which provides cover for financial loss as a result of an
  • interruption to your business caused by an insured event
  • • the risk of flooding
Motor Insurance Takes care of your valuable business vehicles with cover to help:
  • • replace or repair a vehicle damaged by fire or water
  • • if you or your staff damage another person’s vehicle
  • • repair your vehicle after an accident or replace it if it’s written off
  • • replace a lost or stolen vehicle
  • • safeguard you against legal liability.
Workers Compensation Covers the cost of your employees’ wages, rehabilitation and medication if they
become sick or injured through their work.

Limits, excesses and

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. .

Management Liability Insurance

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.

Management Liability Insurance