Global Shipping Crisis & Supply Chain Disruption | How Insurance Can Help

Significant delays in the movement of goods due to the closure of ports, redirection of shipping routes, coupled with a surge in consumer spending are impacting whole industries across the globe – from construction to retail. These forces are causing major business interruptions with potentially devastating consequences for profitability and sustainability.

This article examines the global shipping crisis from an insurance and risk management perspective, setting out how insureds can take action to reduce their risk exposures and the impact on their bottom line.



While many of the above factors can be linked to interruptions caused by COVID-19, supply chain vulnerabilities existed before the pandemic.  Over time, global economic factors have caused shipping companies to restrict their operating costs, leading to reduced investment in new vessels, reliance on older containers, and the rerouting of inefficient shipping routes.  Meanwhile, demand for larger capacity container vessels grew, leaving older, smaller capacity fleets idle.  Fast forward to 2020 when an almost overnight surge of online consumer demand triggered the reopening of abandoned shipping routes.

The scarcity of available vessels and containers, combined with the increased consumer demand for goods has seen a dramatic increase in freight rates.  For example, the World Container Index has seen prices climb for 40ft containers by 360% since August 2020, and over 600% for the Shanghai to Rotterdam route. It is expected that sustained freight cost increases will eventually be added to the cost of goods.

Further delays are occurring in some of the world’s largest container ports in China and the United States caused by closures following COVID-19 infections amongst dock workers as well as additional biosecurity measures being applied.  These disruptions cause spillover into other ports and congesting spikes. Freight companies implemented workarounds such as leasing passenger and cargo aircraft to transport goods. This provided some relief while international travel was restricted, but as borders reopen, this is no longer such a viable solution.   



Industries that import or export products or raw materials have felt the impact of these supply chain disruptions, particularly the Food & Beverage, Retail, and Construction industries. From an insurance perspective, there are key policy considerations that can help reduce your business’ changing risk profile and ensure the appropriate cover is in place to minimise losses.  These are outlined below.


Deterioration of stock (fresh food and perishables) caused by delays

Delays are normally excluded in most Institute Cargo Clauses, however, deterioration of stock is usually covered (depending on the cover written into the policy). This adds an element of complexity when settling a claim and often leads to partial or commercial settlements.  Insurers are willing to offer forms of extended cover to write back some protection for loss or damage caused by the delay with terms and conditions (pricing, limits, and deductibles) linked to the exposure and likelihood of loss.

Insurers are also starting to see claims arising from failure of older, refurbished shipping containers (e.g., refrigerated motor failure) so a policy review to ensure stock deterioration is covered is encouraged.


Conveyance limits

With the shortage of containers, limited access to ship tonnage, and increased freight rates, some insureds may look to consolidate loads, which can cause increases in conveyance limits.  What was deemed appropriate in the past may need to be reviewed and the insurance policy should reflect this.


Additional risk management and inspection conditions

Inspection of containers prior to transit and upon delivery is sound risk management practice and where possible, it should be built into your overall risk protection/mitigation strategy. Larger conveyances can include inspection warranties/conditions at the port. If this is not completed and a claim is made, it can impact an insurer’s view on indemnity. Therefore, clear instructions and effective communication with logistics providers can help prevent claims from being denied.


Indemnity period(s) and limits of liability

Delays in the delivery of raw materials or critical plant and machinery items can, in turn, delay the rebuild, reinstatement, or replacement of insured property in the event a loss occurs.  Increased turnaround times may exceed the policy indemnity periods. This can lead to a portion of the loss not being paid out, underinsurance, or inadequate insurance in the form of the policy limit.

When assessing an adequate policy limit, freight is often considered an uninsured working expense and is factored in the Rate of Gross Profit.  A formal Business Interruption review should be regularly undertaken to ensure cover and limits are appropriate.


Expediting expenses

Costs that are reasonably incurred to expedite the transportation of insured raw materials, plant, and equipment following a loss are covered under most Property policies.  An example here is the additional costs of leasing an aircraft instead of a ship.  Some insurers may have different stances on clients paying additional fees to ‘buy their way up the line’, and whether this is covered under expediting extensions. Therefore, open, and early communication with your broker is vital.


Contract value/limits

Contract Works insurers have also seen significant increases in the cost of construction projects, fuelled by the growing costs and limited availability of raw materials (timber, bricks, glass, etc.) and labour.  Clients are encouraged to undertake regular reviews of their limits, values, and contracts with their customers to ensure they have adequate insurance in place.


Fines and penalties

Supply chain disruptions are also impacting completion periods within the construction industry as well as industries downstream where project completion has been postponed. Most Contract Works insurance policies do not provide cover for fines and penalties incurred as a result of shipping/transport delays pushing out completion periods.  Some insurers can write this cover back in, however strict underwriting protocols will be applied when assessing the risk to determine pricing, terms, and conditions.



While many factors continue to disrupt the global supply chain and the impacts can be devastating to businesses, our message to clients is that having the right insurance policies in place and reviewing these closely with your broker is an effective risk management strategy. Feel free to reach out at any time to discuss your business needs.


Travis Wendt

Head of Placement 

COVID-19: Business Interruption, Contingency and Workplace Risk


On 30 January 2020, the World Health Organisation declared the Coronavirus outbreak a Public Health Emergency of International Concern. We sympathise with everyone who has been impacted by the virus and Honan Insurance Group have implemented additional resources and contingency planning to ensure that we remain able to provide advice, insurance and support to our clients as the situation develops.


As the impact of COVID-19 on local and international economies continues to evolve, we highlight to all clients the need for management to consider financial, strategic and business risks to operations. In this article, we examine the key areas we have received the most queries about: Property and Business Interruption, Business Contingency and Workplace Risk.


Industrial Special Risks* (Property and Business Interruption) Insurance & COVID-19 

(Potential Policy Response under ISR Mark IV Policy)

It is expected that many businesses will suffer disruption as a result of the spread of the Coronavirus (COVID-19).   With the situation changing rapidly and restrictions on the movement and gathering of people (both at local level and internationally), there is no doubt many companies will suffer from loss of revenue and/or additional expense.


Property Damage

Generally, property policies (including office risks) cover physical loss, destruction or damage to insured property resulting from a covered peril (all risks).  In the case of the Coronavirus, the ISR (Mark IV) policy exclusion 4(a) excludes physical loss destruction or damage occasioned by or happening through disease.  Office-related risks also have very similar exclusions. The ISR policy can include a myriad of endorsements with some coverage writebacks for costs to clean-up a site (where required by order of a public authority), however, this would need to be reviewed on a case by case basis.


Business Interruption

An ISR insurance policy extends to include under Section 2 coverage for business interruption.  This cover traditionally applies only to interruption caused by an insured material damage event such as fire, storm, impact or accidental damage.

In addition, cover is extended to include closure of the business by public authority for several risks including human infectious or contagious diseases.   This coverage was designed to cover events such as an outbreak of Legionnaires disease or measles which could affect one or two buildings and a small number of businesses.  Some ISR policies can extend to provide coverage for outbreaks in a 20-50km radius from the insured location.

Specifically, in relation to the COVID-19 outbreak, the ISR policy contains a specific exclusion for loss resulting from interruption of or interference directly or indirectly arising from or in connection with Highly Pathogenic Avian Influenza in Humans or any other diseases declared to be quarantinable diseases under the Quarantine Act 1908 and subsequent amendments.

Following the H5N1 virus (avian influenza) outbreak in 2006 and the H1N1 virus (swine influenza) outbreak in 2009, insurers adopted this exclusion as a market standard position in Australia.

The Australian Quarantine Act 1908 was replaced by the Biosecurity (Consequential Amendments and Transitional Provisions) Act in 2015.  COVID-19 was added to the Act as a listed (quarantinable) human disease on 21 January 2020, under Biosecurity (Listed Human Diseases) Amendment Determination 2020 (Cth) F2020L00037.


Listed Human Diseases under the Act are thus now:

  • Human influenza with pandemic potential
  • Plague
  • Severe acute respiratory syndrome (SARS)
  • Middle East respiratory syndrome
  • Smallpox
  • Viral haemorrhagic fevers
  • Yellow Fever
  • Human Coronavirus with pandemic potential

As a result of the above, the business interruption section of your insurance will not provide cover for COVID-19 disruptions. As with any other threat it is important to consider what risk management measures you can introduce to mitigate the risk to your staff, customers and business.


Risk Management Tips: How to avoid infection

Here is a short list of ways to minimise the spread of Coronavirus

  • Practice good personal hygiene.
  • Avoid contact with anyone with or suspected of having Coronavirus.
  • Boost your immune system by eating well, exercising, having enough sleep, and keeping your stress levels under control.
  • Cancel or delay any travel until the crisis is over.


Recommended Actions for your organisation:

  • Implement a home quarantine regime for anyone that has travelled to an infected country or is likely to have been in contact with someone infected with Coronavirus.
  • Review and update if necessary human resource (‘HR’) policies on fitness for work including possible quarantining of employees and formalising the requirement for employees to remain off work if affected.
  • Consider or extending flexible working arrangements to reduce the likelihood of the spread of the virus in the workplace or the community.
  • Update travel rules and arrangements limiting non-essential business travel.
  • If not already in place, provide sanitized hand washing stations for use by staff and visitors.
  • Review arrangements for workplace hygiene and cleaning protocols including “cough and sneeze” etiquette.
  • Protect the mental wellbeing of employees concerned about the Coronavirus.
  • Ensure clear and honest communication to employees on their welfare.


Keep Informed

Everyone should remain alert for updates and advice from the relevant authorities on additional steps to manage the spread of the disease. The health department in each state is providing excellent resources and advice and regular updates. Before travelling, check for and take the advice of any travel warnings on


Business Continuity Management Planning

A pandemic is just one risk facing modern organisations.   Having a fully documented and exercised business continuity management plan is important for every business.  Honan has resources to assist you in developing a business continuity plan and please speak to your Client Manager for further information.

*Property/Office/Business Interruption


Business Contingency

The Coronavirus may impact revenue for businesses through:

  • Production slowdown & disruption to workforce (sick or quarantined employees)
  • Disruption to Supply chains and supplier services
  • Decrease (or increase) in demand for stock
  • Large scale closures of consumer markets and public spaces due to quarantine
  • Delays in customers paying outstanding invoices within normal trading terms
  • Economic slowdown on global and local scale


Whilst there is coverage available under Corporate and Business Travel insurance policies in certain circumstances, there is limited cover available under most standard General Insurance policies for loss of trade and interruption to business operations.

As a general rule, it is not viable for most insurance markets and products to cover “global pandemics” as an insurable event. This is because the financial impacts of a pandemic are not quantifiable, meaning risk cannot be priced accurately or sustainably by insurers. If you do suffer a loss, please contact our team to discuss the specific circumstances and how your policy may respond.

Whilst insurance cover availability may be limited, businesses can prepare.  We would strongly recommend formation of a working committee to evaluate the impact to business as conditions continue to evolve, with accountability to the board or executive team.


Considerations for a COVID-19 working group should include:

  • Review of policies, procedures and protocols in place to protect the safety and wellbeing of employees and prevent further risk of spread of COVID-19 within the workforce and community.
  • Assess venerability of IT Infrastructure (including stress-testing) for an organisation’s ‘Work from Home’ capabilities in the event of premises closure/staff quarantine
  • Consider the impact on supplier and customer contracts to meet delivery/service obligations from both parties (how Contractual Penalties & Force Majeure clauses may be applied)
  • Evaluation of possible supply chain disruptions and how these can be mitigated or bypassed through appropriate work arounds and contingency planning
  • Evaluation and stress testing of stock levels and planning for inventory shortage as supply from China recommences operations
  • Review ability to support alternative revenue streams that are not as severely impacted by COVID-19
  • Review communications with key customers and other stakeholders to maintain relationships and manage challenges in a sensible, commercial & collaborative manner
  • Review credit and debt facilities to ensure that cash is available in the short term to manage financial impacts and support increased business restart
  • Communicate with creditors if a reduction in revenue has the potential to impact on cash flow and financial obligations.



Workplace Risk: Workers’ Compensation and Coronavirus (COVID-19)

There has been much discussion around the exposure and potential liability under Workers’ Compensation should an employee or contractor contract Coronavirus.

As outlined by Safe Work Australia (2020), Workers’ Compensation arrangements differ across schemes, however there are common threshold requirements that would apply in the case of COVID-19:

  • that the worker is covered by the scheme, either as an employee or a deemed worker
  • that they have an injury, illness or disease of a kind covered by the scheme, and
  • that their injury, illness or disease arose out of, or in the course of, their employment.

Compared to work-related injuries, it is difficult to prove that a disease was contracted in, or caused by particular employment. In the case of a virus such as COVID-19, establishing the time and place of contraction may become increasingly hard. We have sought clarity from our legal partners and obtained publications from the governing state regulators. Their view is it will be challenging to prove workplace exposure to Coronavirus as questions will arise as to the exact time and place of contraction.

For coverage to exist, a determining authority would need to be satisfied that the employment significantly contributed to the employee contracting the virus. For viruses, it can be difficult to accurately determine the exact time and place of transmission. As a result, it may be difficult to determine that employment significantly contributed to the virus.

However, where an employee’s employment puts them at greater risk of contracting the virus the significant contribution test may be easier to meet. For example, if the employment involves:

  • travel to an area with a known viral outbreak
  • activities that include engagement or interaction with people who have contracted the virus
  • activities that contravene Department of Health recommendations.

Each workplace illness would need to be considered on its individual merits, having regard to the individual circumstances and evidence in relation to the claim. More information is available here: Comcare Australia.

Deeming an illness or disease as work related and unique to the workplace may require court intervention to distinguish medical opinion from legal facts. There is no liability determination available to declare an illness or disease compensable or non-compensable; each case is determined on its own merits and circumstances.

Although you may not be able to eliminate the potential risk of employees contracting Coronavirus while carrying out work, you must do what is reasonably practicable to minimise the risk of employees contracting Coronavirus.


Coverage while travelling overseas for work

Any liability or workplace contribution applies to both employees working overseas and those working within Australia. Each case will be determined on its own merits and circumstances.

Note: For international employees engaged locally, state or country specific legislative conditions will apply. Queries should be directed to Honan. Depending on the state of urgency, travel restrictions and periods of self-isolation may need to be considered and communicated to all employees and contractors.


Employer Support

It is important that employers refer to internal policies and procedures to ensure measures for employee safety are in place. Honan has resources to actively advise on Workplace Risk exposure, as well as Legal and Work Health and Safety partners who can assist with ongoing management of this changing environment.


All companies will need to keep up to date in what is evolving environment.  Please see below some resources to do so:

Australian Government Department of Health

Safe Work Australia


McKinsey & Company have released a briefing paper (9th March 2020) which provides some insight into possible global economic impact as well as some common steps that can/need to be taken in preparation for businesses being affected and the formation of a working group: link here.

For any additional queries or concerns, please contact your Honan client manager.


*Property/Office/Business Interruption

The advice in this paper is general in nature. While the utmost care has been taken in the preparation of this preliminary advice or opinion, you use it at your own risk.

If you have difficulty reading and/or understanding the cover provided in the policy(ies) that you have please contact your Client Manager.

Honan Insurance Group & MBS Insurance partner in JV to improve life insurance solutions for clients

Life Insurance

Joint Media Release

Honan Insurance Group & MBS Insurance partner in JV to improve life insurance solutions for clients

Tuesday December 5 2017

Australian-owned insurance and financial services broker Honan Insurance Group CEO Damien Honan and leading risk specialist practice MBS Insurance partner Drew Burden have announced they have joined forces to create a new company Honan Life Insurance Group.

Launched yesterday, the new life insurance venture is an important step in Honan’s 53 year history of leveraging a broad network of specialists to bring relevant expertise to its clients.

Commenting further, Damien Honan said since the inception of the company over five decades ago, the group has operated to ensure clients are provided the very best insurance and financial solutions to address their needs.

“The alliance with MBS Insurance under the Honan Life Insurance Group gives us the ability to enhance our marketplace and client offering with a more inclusive integrated insurance service”, added Damien Honan.

Drew Burden said, “As a leading life insurance specialist, we are excited to be joining Honan Insurance Group under this new brand. Collectively we bring together the best of our respective organisations to create a new way to engage with clients and support them to protect their financial futures”.

Headquartered in Sydney, MBS Insurance was started in 2006. Over the years the practice has grown steadily through adherence to the highest standards of best practice and through its business infrastructure provides a comprehensive risk offering to clients.

Today, MBS Insurance is a highly regarded rapidly growing national risk specialist. The JV with Honan Insurance Group is both an important milestone and acknowledgement of the organisation’s standing in the financial advisory sector.

Australia is one of the most highly developed and fastest growing economies in the world underpinned by a financial services sector with an overwhelming volume of offerings and complexities between standalone insurance products and offerings inside superannuation funds.

“Through specialisation MBS Insurance has been very successful in this environment over a long time and the JV with Honan Insurance Group positions our brand as an industry leader with distinctive strengths”, Drew Burden said.

Honan Insurance Group has over 180 employees with offices in Melbourne, Sydney, Brisbane, Perth, New Zealand, Singapore and the US.  Evolving into a global organisation was achieved in November 2001 when the group became a member of the Worldwide Broker Network (WBN), the world’s largest network of independent property and casualty brokers and employee benefits consultants, giving Honan the capability to provide a truly integrated global service.

Over the years Honan’s partnership with the WBN has strengthened, with Honan solidifying their position as the Risk Partner of Choice in Australia and New Zealand, eventually encompassing the entire Asia Pacific region.

Damien Honan concluded, “Honan Life Insurance Group is on an exciting growth journey and this new alliance will provide a valuable point of difference for us as an organisation and increase the value we provide to our clients.”

Issued jointly by

Honan Insurance Group


MBS Insurance         


Media Enquiries:

Mr. Joe Perri

Joe Perri & Associates Pty Ltd

Telephone / fax:    +61 3 9324 0362

Mobile:                  +61 412 112 545


Are you a small business in NSW? You may be eligible to save on your insurance in 2018.

Biotech & Life Science

The NSW Government recently introduced a new small business stamp duty exemption under the Duties Act 1997 (NSW) for eligible insurance acquired on or after 1 January 2018.

This means you may be eligible for a potential saving of 2.5 – 9.5% on your current insurance costs, a welcome cost reduction for any small business.

Am I eligible?

You need to the fit the definition of a small business.

As per Revenue NSW, the definition of a small business is “an individual, partnership, company or trust that is carrying on a business and the business has an aggregated turnover of less than $2 million. Aggregated turnover is your Australia wide annual turnover plus the annual turnovers of any business entities that are your affiliates or are connected with you”.

What types of insurance may be eligible for the exemption?

A range of insurance policies are covered by the exemption including:

  • Product and public liability
  • Commercial vehicle
  • Workers Compensation
  • Compulsory Third Party for motor vehicles
  • Marine transit
  • Group life
  • Occupational indemnity Insurance (including professional indemnity) covering liability arising out of the provision by a person of professional services or other services (other than medical cover).

It also applies to insurance acquired for specific industries such as:

  • Not for profit
  • Education
  • Defence
  • Charities

Penalty fines of up to $11, 000 plus penalty stamp duty, interests and costs, may apply to a small business that wrongly claims the exemption.

How do I apply for the Exemption?

To be eligible for the exemption, you must complete a declaration confirming their entity is a small business. This needs to be provided to Honan along with your clients insurance renewal declaration.

This declaration can be filled out online. Click here to complete your declaration.

When does the new exemption take effect?

The exemption will take effect on or after 1 January 2018 on eligible insurances.

How do I get more information?

For more information, please refer to the NSW Revenue website.

Honan Insurance Group Pty Ltd (“Honan”) ABN 67 005 372 396, AFSL 246749. Honan is not the underwriter for any insurance product that you may decide upon and insurance is issued subject to the terms, conditions and exclusions as set by the particular underwriter.

This flyer contains information of a general nature only and is not intended to be advice. It is important for you to consider these matters and read the Product Disclosure Statement (“PDS”) and policy before you make a decision about an insurance product. You can get a copy of the PDS by calling 02 9299 0767.

Is your property compliant? What you need to know about cladding.


Following the devastating Grenfell Tower fire in London, there has been increased public concern and media exposure on the use of cladding in buildings, specifically in the use of Expanded Polystyrene Sandwich panels (EPS).

What does this mean for the insurance industry?

Honan has started seeing a shift in approach from Insurers: they have started requesting additional information in relation to cladding and EPS. Longitude Strata Insurance has taken a formal stance and advised all their stakeholders that they will no longer quote properties with more than 25% EPS construction. Furthermore any properties that they are insuring which fall within this category will be declined upon renewal.

Although disclosure of information and declines are nothing new to our industry, the strong stance taken by the Insurers demonstrates their aversion toward such materials.

According to InsuranceNews, the Insurance Council of Australia (ICA) has put forward a suggestion for a nationwide audit on cladding as they are doubtful Insurers will be willing to pay out claims on non-compliant buildings. Allianz has moved towards this and has started to put exclusions on their Professional Indemnity products for Strata Managers, stating that they will no longer indemnify for claims arising directly or indirectly out of any building cladding that is not compliant. At Honan we do not believe this is an isolated incident, we believe the market is likely follow.

Are you concerned your property is non-compliant? 

We suggest taking the following steps:

  • Inspect your property, strata plans, council records, certificate of occupancy and any relevant documents available for any possible aluminium cladding and EPS
  • Advise concerns to any immediate interested parties such as Building Managers, Real Estate Agent, Strata Managers or your Executive Committee
  • Obtain a report from qualified experts which highlights the amount of cladding and their fire resistance properties
  • Update the relevant parties of the findings e.g. Real Estate Agents, Strata Managers, Building Managers and most importantly your Insurer
  • If your property has been recently built, you will need to notify the builder’s home warranty Insurer and possibly the developer
  • Obtain legal advice and expert opinion on the topics of liability, sustainability of materials and who is liable for the cost of repair and replacement of your property
  • Arrange quotes and scope of works for the repair and/or replacement of these materials
  • Raise levies, complete works and update your Insurers


Terrorism Insurance Levy Update


In light of the continuing  risk of terrorist attacks and the fact most insurers do not cover any loss or damage as a result of a terrorist act, to protect the commercial property sector, the Australian Government set up the Terrorism Insurance Scheme (“TIS”) which is administered by the Australian Reinsurance Pool Corporation (“ARPC”).  Through this arrangement, the ARPC protects insurance policyholders through premium payments to provide cover in the event of a declared terrorist incident (“DTI”).


Amendments to the TIS

Changes to Australia’s TIS have been approved and will:

  • broaden the definition to include buildings with a floor space of at least 20% used for commercial; or
  • apply if the building sum insured of $50 million AUD or greater, whether used for commercial or other purposes. 


What this means for you

If your insurable property falls within the new definition, you will notice a new terrorism levy on your policy to adequately reflect the terrorism levy charges.

It means that residential buildings over $50 million will now be subject to a Terrorism levy where previously they were not required to contribute to the premium pool.

The shift in commercial floor space from 50% to now 20% means there will now be a number of mixed use buildings, which will now need to contribute a premium.


When does the change take effect?

These changes will take effect from 1 July 2017 and Honan will issue all renewals due on or after 1 July according to the new definition.


How is the terrorism levy calculated?

The applicable levy is set in line with a tier allocation as determined by the ARPC.

Tier Allocation and % levy

The premium is charged by postcode and split into three tiers according to population density.

The ARPC levy is currently calculated as follows:

  • Tier A: up to 20% – are those cities with a population of more than 1 million covering the CBD areas.
  • Tier B: up to 6% – are those covering the urban areas of all state capital cities, and cities with a population over 100,000.
  • Tier C: up to 3% – Postcodes allocated to Tier C are those geographic postcodes not allocated to either A or B.


If you are unclear about these changes or would like more information please contact us or speak with your Account Manager.

Further details are also available at the ARPC website

National Insurance Brokers Association (NIBA)


Since 1988 Honan Insurance Group has been a member of the National Insurance Brokers Association (NIBA), an organisation which represents the interests of the insurance broking sector in Australia.

NIBA members range from large international brokerages to small suburban brokerages and through representation, communication, information and education, NIBA ensures the insurance brokers’ interests are protected and their professional standing enhanced.

The insurance and risk business is highly regulated, and intermediaries are subject to a wide range of professional and legislative pressures. To thrive in such a demanding environment they must be able to keep pace with constant changes in the risk factors Australian businesses face.

NIBA supports its members through its lobbying, education, technical and information services and our members are recognised as having a high standard of professionalism and knowledge through ongoing educational support and technical development.

SMEs Embrace Facebook & Instagram


Younger small and medium enterprises (SMEs) have responded to the need of using new media technologies for business with almost 41% of SME owners under the age of 44 using social media as the primary tool for communicating with their customers, according to a new Westpac index.

The Westpac Survey was conducted with 522 Australian SME owners and decision makers who were whittled down to those who had an annual turnover of less than $5 million and under 20 employees.

The survey results were promising, with 35% of SME owners using social media to network with existing or potential customers. Further, 71% of SME owners used at least one networking channel for their business and 59% networked online.

Westpac has the following tips on how to use social media as a business tool:

1. Understand how social media can work for you and your customers

Decide if social media is right for your business by considering the time spent on maintaining the platforms, responding to posts, generating content and engaging with followers.

It is important to have a clear understanding of what you are trying to achieve by using social media, which platform is right for you and how it aligns your business plan and strategy.

2. Be clear on who your customers are and what you want them to do

Content is crucial to effective social media strategies – know what you are trying to say and say it clearly.

Tailor your messages so they are the appropriate length for your customers, and be clear on the call to action – it is important not to mix messages and ensure you provide links to the page where customers can purchase your products or communicate with your business.

3. Develop a social media policy for your business

Respond carefully and thoughtfully to customer posts on social media channels.

Have a process in place to ensure the responses to customers are on message and enhance their customer experience.


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