In this article we will discuss about how may businesses in Malaysia insure their property with weather insurance against storm.
What is Weather Insurance and why is it important for businesses in Malaysia?
Weather insurance in Malaysia is a type of insurance coverage that protects businesses from financial losses caused by adverse weather events, namely storms, hurricane, cyclone, typhoon and windstorm. It is important for businesses in Malaysia, a country that is often affected by devastating storms.
Weather insurance can help businesses to:
- Avoid or reduce debt in the aftermath of a storm;
- Cover the cost of repairing or replacing damaged property, such as buildings, equipment, stock, etc.; and
- Cover loss of gross profit due to storm damage (requires custom design).
Examples of Storms damaging businesses in Malaysia
October 2023 – Megah Rise Mall
A recent example of storm damaging Malaysian businesses is the collapse of the ceiling at the Megah Rise Mall at October 2023.
Jan 2022 – Shah Alam freak storm
A freak storm had occurred in Shah Alam that had caused considerable damage to many businesses including the iconic hypermarket mall, Giant @ Seksyen 13.
How do Malaysian businesses buy Weather Insurance against Storm?
Malaysian Businesses can insure their property against the devastating effects of a storm by purchasing Fire Insurance with the “Storm Tempest” extension. The property to be protected by insurance should be specifically named in the “Interest Insured“. Certain items, such as outdoor fixtures and fittings, must be explicitly mentioned in the “Interest Insured“.
Does Weather Insurance in Malaysia cost extra?
Storm insurance in Malaysia does cost extra. The amount payable is dependent on several factors such as sum insured value and the rate. Insurance Companies in Malaysia may offer different rate for the extension. However, the rate should not vary much amongst them.
Is Weather Insurance necessary for all businesses in Malaysia?
The need for Storm Insurance in Malaysia is highly subjective. One of the most influential factors that should be taken into consideration is location. If you are located in an area that has history of windstorm or exposed to monsoon winds, you should be looking into buying this coverage. A simple location search with the keyword of storm would tell you whether is your location prone to windstorm. Alternatively, you may also ask your neighbours.
However, given the recent climate change in Malaysia, I would HIGHLY recommend buying this extension regardless of location history. Our insurance claims services were provided to a business that had been affected by the Shah Alam freak storm, which had no history of windstorm damage for over a decade. The claim was successful paid at about RM60,000.
Does this cover losses due to flood?
Weather Insurance in Malaysia for Storm does not cover losses due to floods. Flood insurance is a separate type of insurance coverage that covers water damage that rises from the ground whereas Storm Insurance covers wind and water damage from above.
Conclusion
Weather insurance coverage is an important tool for businesses in Malaysia to protect themselves from the financial impact of storm damage. Businesses that do not have weather insurance protection should consider getting a quote today.
