4 Ways to Manage Your Cash Flow During a Pandemic

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Australian businesses can be faced with substantial challenges due to the ramifications of the COVID-19 outbreak. An overarching difficulty impacting the longevity of organisations being maintaining cash flow.

Here are 4 ways Aon can help you to: manage the crisis, stabilise your business, and plan for the future:


1. Funding of premiums and flexible payment options  

Aon encourages you to work with your Broker to determine what premium funding or payment plans may be available to you.

2. Advocate for your unsettled claims

There are typically 3 key challenges when confronting property claims:

  • Timeliness of returning to normal business trading
  • Leveraging insurance cover to maximise recovery and minimise payment delays
  • Addressing complex demands of the claims process

Following substantial impacts of recent bushfire, storm and pandemic predicaments, Australian businesses are desperate to restore normal trading. Increased priority has been placed on minimising payment delays on open claims to keep businesses afloat. Poor claims administration can cause significant delays, impacting balance sheet, cashflow, brand reputation, and longevity of the business.

Is your business experiencing poor claims service?

With over 40 claims professionals Australia-wide, Aon provides expert advocacy for your open claims – including those related to the recent bushfires and storms. Our team have capabilities of undertaking claims preparation assistance at potentially no extra expense as these costs can be covered by the business.

Aon continues to operate at full-force throughout the COVID-19 climate to provide our clients with a high-quality service to help them through these difficult times. Aon can take over the management of your existing open claims and ensure swift handling in providing maximum coverage.

3. Evaluate your current insurance program and reset/adjust accordingly

Short term financial savings may be possible if insurance protection is removed or reduced, however, the risks may outweigh the benefits. The risk profile of many businesses has changed with COVID-19.

Balanced with the need to reassess the insurance program for the new risk profile, is the need to consider it’s appropriateness for the long-term. Any change to insurance protection should be a considered decision supported by careful analysis.

A business which is not adequately insured, will have to fund any shortfall from its own capital reserves. If your business needs to redirect capital to cover uninsured losses it means less capital is available when growth returns to the economy. It’s now more important than ever to protect capital to ensure you can make the most of the recovery. An inability to do so may result in the business closing its doors for good.

Key questions you should address:

- Does the insurance program still provide the best economic value for you? Can it be restructured to benefit cash flow?

Uncertainty on the full impact to stock, staffing, payroll and revenue due to COVID-19 may have prompted businesses to re-evaluate insurance programs to reduce premium costs – however, critical timing and drawbacks are often overlooked.

Here are 5 steps you should be taking (and where Aon can assist) when reassessing your insurance program:

1. Speak to your broker about adjustment possibilities

2. Only adjust once you have fully evaluated the impact to your business

3. Retain your Business Interruption Insurance

Aon advises against removing long-term risk protection for short-term financial saving. Business interruption cover is as much about the future as it is the present. Reducing cover to meet short to medium term lower revenue/profit projections evident today could result in unintended gaps in cover during any subsequent recovery phase.

The insurance needs to be suitable to the end of the indemnity period which could be 2-3 years into the future and reducing levels of cover now for a quick saving could cost in the long run. Say you reduced your business interruption values now to cater for lower revenue projections as a result of COVID-19, a fire occurs during this time period and it takes 12 months to recover.

If the lockdown is lifted one month after the fire occurs, you would be missing out on 11 months of adequate business interruption protection. This would significantly impact your ability to return to your normal pre-COVID-19 operations.

Instead, engage an expert, such as Aon, who has experience working across all available options to ensure that an informed decision is made.  

4. A lockdown does not sojourn risks.  
  • Speak to your broker on where risks can be reduced in your current existing policies – and where they could increase due to COVID-19. Some key questions to ask are:
  • What insurances are you contractually obliged to maintain, and how much?
  •  Are your insurances protecting you from past/undiscovered exposures? (E.g. Professional Indemnity, Directors & Officers, Employment Practices Liability, Crime/Fidelity, Statutory Liability, Cyber and to some extent Product Liability)
  • What are the new risks due to COVID-19?  (E.g. Property (negligence) damage due to lack of human presence for early detection, personal protection for new management exposures and data and privacy breaches due to increased home working)

5. Get an Independent Insurance Health Check

Aon can conduct a complimentary health check for all new clients. The health check will identify potential ways to restructure your program, benchmark pricing, and highlight extra benefits of being an Aon client. Contact us to book your complimentary health check.

4. Insure against payment or performance defaults


Prior to the COVID-19 pandemic and recent bushfire crisis, IMF had depicted a global economic growth of just 3%. The lowest since the 2009 recession. This can cause many companies to potentially investigate protecting against payment defaults and bank utilisation in order to lower costs of working capital finance.
Credit Insurance can help protect companies against unanticipated payment defaults. The security of cashflow and liquidity under Credit Insurance can allow companies to expand into markets with confidence.
Whilst client non-payments can have substantial impacts to on cashflow, a bad debt provision is not the answer. In order to pay creditors and ensure customer demands are met, cash needs to be injected back into your account. This is where Credit Insurance can be crucial in placing liquid funds back into your business and providing guidance through uncertain times.
Surety Bonds

Additionally, we have already seen a rise in companies looking to access the bond market for new funding but with minimum turnover requirements, many companies can’t access this type of funding so need to look to alternative ways to access funding. Companies should speak with their Broker to determine if surety bonds is an available solution for them.


Download the Interactive PDF

4 Ways to Inject Cash Back Into Your Business

Additional Resources

COVID-19 Planning & Resource

Aon Insights:
Debt Gloom: Avoiding the Avoidable 
Good Riddance to Bad Debt

Managing impact of COVID-19: Cash flow and liquidity changes

COVID-19 Response Site:
Aon Infectious Disease Response
Task Force

Download our global report:
Decision Making in Complex & Volatile Times: Key to Managing COVID-19