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Business News

Aussie small businesses at risk of underinsurance

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Aussie small businesses at risk of underinsurance

BIZCOVER

Australian small businesses are at risk of underinsurance, with a recent report showing that many SMEs have become complacent and have no protections in place if a negative event were to occur.

Only 43% of small businesses think they are fully covered from insurable business risks, according to the newly-released bonus chapter of the Vero SME Insurance Index 2022.

While this shows a level of understanding among small businesses about their cover levels, 34% said they have no plan if something bad were to happen, the survey found. Some others haven’t even thought about what might happen or simply choose to cross that bridge when they come to it.

“Small businesses seem to be generally aware that they may be underinsured however due to the additional cost of increasing coverage some may have made a choice to not look further into their cover due to price concerns,” says Jane Mason, Head of Product Channels and Risk at SME insurance platform BizCover,

“What’s worrying is that the dangers of underinsurance can leave the insured in a worse situation if underinsured or not insured at all.”

The conditions are set for an underinsurance crisis  

From floods, bushfires, and the Covid-19 pandemic to supply chain issues and the rising cost of living, Australian small businesses have had to contend with multiple problems in recent years.

This has had an impact on the revenue of many businesses, causing some to look for ways to save money.

Vero’s report suggests that SMEs with declining revenue are less likely to say that they are completely covered and are also less likely to have a plan in place for a negative situation.

“It’s tough out there. And unfortunately, some businesses put their insurance on the chopping block,” says Mason. “But what this also says is that the businesses who are more likely to be hit by underinsurance are already struggling.”

Exacerbating the issue is that rising inflation and major supply chain disruptions are pushing up the claims costs for insurance companies, which ultimately results in higher premiums across some types of insurance.

This can put businesses who are renewing their coverage at the same levels as the year before at risk, as the cost of equipment, stock or machinery has, in many cases, increased beyond what they were originally insured for.

“What was adequate cover a year ago may not be adequate cover now because of the rising cost of materials,” says Mason.

The risk of underinsurance  

For Aussie businesses, what all this means is that some could be left with a serious financial crisis by not having enough insurance to cover their loss.

For example, say you insure your business for $100k and a fire rips through your store destroying it. Once you factor in the cost to repair your business, the total bill comes out to $160k in damages. That’s $60k you’ll have to pay out of your own pocket.

Another way you can fall into the underinsurance trap is by triggering a underinsurance clause.

These clauses are designed to discourage businesses from purposely undervaluing their assets and are triggered by underinsuring usually by 20% under the true value.

Importantly, this occurs even if the damages fall within the insured amount.

So, in the above example, even if the damages were only $40k, your insurer will not cover that full amount if the clause is triggered despite you having $100k of cover.

“Many people may think that the insurer will cover it since the cost of the damages easily falls within the insured amount but that is sometimes not the case if the business is underinsured,” says Mason. “If you purchase below what your business’ true value is, you could become responsible for the share of the loss and not receive full payment for your claim.”

What can small businesses do?  

While the current situation is tough, there are some things Australian small business owners can do to avoid being underinsured.

Regularly scheduling some time to consider your exposure to risks could help avoid problems later down the track. This will allow you to consider what risks your business is exposed to and think about the possible scenarios that could happen if you weren’t protected in the event of a claim.

“It’s important to insure your business for an amount that is sufficient to cover not only the tangible assets, but the cost of repairs and any other variables that might leave you out of pocket,” says Mason. “After that, consider jumping online to compare quotes so you could then decide whether the price of the cover justifies the protection.”

While reviewing your cover at renewal is a great time to consider your options, you could check in at any point throughout the year.

And with inflation and the cost of claims rising, it’s become even more crucial to regularly keep track of the actual value of your building and business contents to avoid being left with inadequate cover if a claim were to arise.

*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.  © 2022 BizCover Pty Limited, all rights reserved. ABN 68 127 707 975; AFSL 501769   

 

Business News

Iconic ice cream and lolly shop turns 10

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Caroline Powell of Muzza's Milk Bar
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Iconic ice cream and lolly shop turns 10

 

By Samantha Elley

It is said, there are two reasons people come to Evans Head.

Obviously, the beach is the first but secondly would be to visit Muzza’s Milkbar in Oak Street.

Owned by Evans Head resident Caroline Powell, the iconic ice cream and lolly shop is turning 10 years old and they are planning a huge party.

The shop first opened on 3rd December, 2013 by Caroline’s mum, Petria Powell after the death of her husband Murray.

“It was a way of dealing with the grief but not have to go into a workplace,” said Petria.

“It was a place for me to go more than anything else, a place to make memories.

“To see children enjoying ice cream and sweets, families coming in, it was everything Murray and I stood for.”

Sergeant Murray Powell of Byron Bay police station was a police officer for 39 years, 25 of those in Byron Bay.

“Unfortunately, he got pancreatic cancer,” said Caroline.

“He died on 28th December, 2011.”

Petria started to expand by opening a Muzza’s store in Lismore, followed by a shoe store.

“I was 20 when we opened the shop and I worked part-time for mum on and off,” said Caroline.

“In the last year before I took over I was working for mum full-time.”

With the three stores, Petria knew it was too much for her and Caroline put her hand up to take over the Evans Head store.

“At the age of 25 I took on the shop,” said Caroline.

“I loved the ice cream and the lollies, and we just continued the same business model, affordable prices so that families can come in and make memories.”

Then Covid hit and Caroline’s business was closed and her plans turned upside down.

“I was actually overseas when Covid hit,” said Caroline.

“I came home and had to do two weeks home quarantine, and I was not able to leave the confines of my tiny little unit.

“I was jotting down ideas into a notebook and I thought ‘Why don’t we just deliver?’”

And so Muzza’s started delivering.

Caroline Powell of Muzzas Milk Bar

Caroline Powell of Muzzas Milk Bar

With a freezer in her car and a will to make her business succeed, Caroline was delivering ice cream and lollies as far as Casino and Lismore.

“Customers can’t come to me but I can come to a customer if I have to,” Caroline said.

“Some people were literally buying five kilos of lollies.

“We worked out for families, it was a way of treating their kids was with sweets; they were homeschooling so they needed something to bribe their kids.”

They were so successful, not only did the business survive 2-3 years of Covid but they also didn’t take any government covid payments.

Now on the eve of celebrating 10 years of the business, Caroline said it has grown ten-fold.

“We offer ice cream, lollies, milk shakes, thick shakes, in winter we supply donuts,” she said.

“We do ice cream cakes. Give me an idea and I will try and make it work.

“Gift boxes and lolly jars are working well.”

The biggest seller, of course, is the ice cream, then thick shakes but the range of lollies is international.

“I get stuff out of the US, stuff from the Netherlands, Germany,” Caroline said.

“We’ve got Dutch liquorice in at the moment, we’ve got Barnett’s sour lollies out of the UK which claim to be the most sour lolly in the world.”

There is also a great range of nostalgic lollies that many parents of the children who come to Muzzas, remember from their own childhood.

“I’ve got suppliers who still stock them,” Caroline said.

“I am hoping to get more of the ‘Old Favourites’, I am calling it.”

The popularity of the shop is reflected in the amount of ice cream they are able to sell.

“The company we buy our ice cream from, Everest ice cream, we are their largest customer in Queensland,” Caroline said.

“They supply as far south as Newcastle and to as far north as Rockhampton.

“Even their customers, Dreamworld and Australia Zoo, we beat them in ice cream sales.

“At Christmas time we get three weekly deliveries of over 300 tubs in each delivery.”

Caroline has plans to expand and open another Muzza’s store and possibly a warehouse to house all the extra stock they have.

“She has made it what it is today,” said Petria.

“I am as proud as punch. She has looked outside the square especially during covid and found a way to beat it. She has a lot of resilience.

“Whatever she does she will put 120% into it.”

Muzza’s is having a party on December 3, 2023 from midday on, behind Club Evans RSL where there will be live music, food trucks and plenty of ice cream and lollies.

“Bring a rug or a chair and come and sit by the river,” said Caroline.

“It’s our way of giving back to the community for all the support they’ve given us.”

 

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SETTING OUR INFRASTRUCTURE PRIORITIES

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infrastructure priorities - Infrastructure Policy Statement.
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SETTING OUR INFRASTRUCTURE PRIORITIES

 

The Albanese Government has released the Infrastructure Policy Statement to guide the Commonwealth’s funding of properly planned and targeted infrastructure to help unlock a range of significant economic, social and environmental objectives.

For too long under the Coalition, Commonwealth infrastructure spending focused on electoral rather than national benefit and in doing this it expanded the Infrastructure Investment Program from roughly 150 projects in 2012-13 to nearly 800 in 2022.

That needs to change.

The Policy Statement commits the Government to delivering nationally significant infrastructure.

This means projects will need to have at least two of the following characteristics:

  • Australian Government contribution of at least $250 million; and/or
  • alignment with Government priorities as articulated in the Infrastructure Policy Statement; and/or
  • situated on or connected to the National Land Transport Network and/or other key freight routes; and/or
  • supporting other emerging or broader national priorities – such as housing or critical minerals.

There are three priorities for our investment: productivity, liveability and sustainability.

It means cutting congestion, ensuring supply chains are resilient, building equity into the heart of where we live, improving prosperity, reducing our emissions and encouraging more sustainable ways to travel.

infrastructure priorities - Infrastructure Policy Statement.

The Albanese Government has released the Infrastructure Policy Statement to guide the Commonwealth’s funding of properly planned and targeted infrastructure

We are committed to working in partnership with the states and territories who are our primary infrastructure delivery partners.

We are reshaping how the Commonwealth funds projects, returning to a preference of 50:50 funding with the states and territories for future investments, so both levels of government carry an equal share of both the benefits and the risks.

This will mean the Commonwealth’s infrastructure spend – which is being maintained at $120 billion – can go further, maximising the benefits of the Commonwealth’s investment and ensuring shared accountability. It will help end the perverse incentives that saw the Federal Coalition throw money at projects that states did not want to build.

The Government may consider funding a greater share of projects in jurisdictions with less capacity to raise revenue on a case-by-case basis.

We also want to share the benefits of construction.  We will seek to encourage local employment and procurement, as well as increase the participation of women, First Nations communities and other marginalised groups in the delivery of these projects.

The Albanese Government will invest in the projects that only the Commonwealth can – those which shape our cities, our regions and our nation.

Together with the states and territories – and with clear priorities and proper planning – we will build a better future for all Australians.

 

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New $18M partnership building digital tech for safer workplaces

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The $18 million Tech4HSE program unites leading researchers in emerging technologies such as generative and immersive artificial intelligence (AI), augmented reality and cybersecurity, to develop tech to aid those working in dangerous environments.
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New $18M partnership building digital tech for safer workplaces

 

CSIRO, Australia’s national science agency, will join forces with five universities to keep Aussies safe at work using the latest digital technologies.

The $18 million Tech4HSE program unites leading researchers in emerging technologies such as generative and immersive artificial intelligence (AI), augmented reality and cybersecurity, to develop tech to aid those working in dangerous environments.

The program is led by CSIRO’s data and digital arm, Data61, and the University of Queensland (UQ). Swinburne, UNSW, Curtin and ANU have also signed up as partners.

Science Director of Data61, Professor Aaron Quigley, said the technologies developed will support health, safety and environmental (HSE) objectives across a wide range of industries.

“Whether they’re working with electrical equipment, heavy machinery or on our roads, millions of Australians put themselves in harm’s way every day to help and serve others,” Prof. Quigley said.

“We’re bringing the best researchers in the nation together to help get everyone home safely, by creating advanced digital tools for training, identifying and monitoring hazards, and planning responses and actions.”

According to the Australian Bureau of Statistics, 497,300 Australians suffered from a work-related injury or illness in 2021-22.  

All participating institutions are contributing funding and research expertise to the program, with UQ administering the funding.

The $18 million Tech4HSE program unites leading researchers in emerging technologies such as generative and immersive artificial intelligence (AI), augmented reality and cybersecurity, to develop tech to aid those working in dangerous environments.

The $18 million Tech4HSE program unites leading researchers in emerging technologies such as generative and immersive artificial intelligence (AI), augmented reality and cybersecurity, to develop tech to aid those working in dangerous environments.

UQ Tech4HSE Science Lead Dr Mashhuda Glencross said these projects present an exciting opportunity to make an impactful difference.

“The innovative technologies we are researching and developing in this initiative are aimed at supporting the safety of Australians during disasters and when working in potentially hazardous environments,” Dr Glencross said.

Prototypes will be built over five years and trialled in real-world job scenarios, with a focus on developing commercially viable products which are responsible by design.

In the first project currently underway, researchers from Data61 and UQ are developing technologies to support crisis preparedness and response for workers in the energy industry.

Data61 Tech4HSE Science Lead Dr Matt Adcock said one example of the technology being developed will combine state-of-the-art computer vision models and 3D generative AI.

“Our aim is to take smart glasses to a new level by enabling the placement of helpful digital holograms within the physical work environment to support emergency response safety training and assisted decision-making under heightened stress levels,” Dr Adcock said.

Researchers are initially working with stakeholders in the power industry to ensure prototypes are sensitive to industry needs.

The $18 million Tech4HSE program strategically seeks to bring Australia’s university expertise and CSIRO’s capabilities together to maximise the impact of science, research, and development for Australians.

The program was announced by Minister for Industry and Science, the Hon Ed Husic, at the launch of Australia’s AI Month, coordinated by CSIRO’s National AI Centre. From November 15 to December 15 more than 50 free and ticketed AI-related events will take place across the country.

 

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