Right now, insurance embargoes are being placed across parts of Australia, affecting businesses trying to finance new equipment. If you’re looking to secure finance for trucks, excavators, cranes, or any other essential machinery, you might be in for a shock—your loan settlement could be delayed simply because insurers won’t issue new policies due to current embargoes.
With extreme weather events and increased risk factors in certain regions, many insurers have paused new cover, making it impossible for businesses to get the proof of insurance required for finance settlements. If you’re in the process of purchasing equipment, here’s what you need to know before your finance transaction is put on hold.
What Is an Insurance Embargo?
An insurance embargo is a temporary restriction imposed by insurers, preventing them from issuing new policies or making changes to existing ones for certain equipment or locations. These embargoes are typically put in place due to:
- Severe weather events, such as bushfires, cyclones, or floods, which increase the likelihood of claims.
- Major incidents, like industrial accidents or natural disasters, affecting specific areas.
- High-risk factors, such as ongoing regulatory changes or increased claims in a particular sector.
During an embargo, businesses cannot obtain new insurance policies or make changes to their existing coverage. This can be a major problem for those looking to finance new equipment.
How Insurance Embargoes Affect Equipment Finance
Lenders require proof of insurance before they settle a loan. If an insurance embargo is in place, businesses may struggle to obtain coverage, resulting in delays or cancellations of finance settlements.
Delayed Equipment Delivery
Many equipment finance agreements include a settlement deadline. If you cannot provide an insurance certificate due to an embargo, your lender won’t release the funds, which means suppliers will refuse to deliver the equipment. This could put your business operations on hold.
Why Are Insurers Placing Embargoes Right Now?
Some areas affected by Cyclone Alfred in Southeast Queensland and the current bushfires in Victoria are experiencing embargoes due to active weather patterns. This means businesses in these regions cannot secure insurance on new assets, delaying finance settlements.
With embargoes being imposed right now, here’s what you can do to keep your finance on track:
✅ Speak to your insurer or broker
Before proceeding with an equipment purchase, check with your insurance broker to see if embargoes are in place for your area. If you’re in a cyclone-prone, bushfire-prone, or flood-risk region, you may already be affected.
Delays in finance settlements due to insurance embargoes are now a major issue in Southeast Queensland and Victoria. Speak with your insurer or insurance broker to understand how these implications may impact your policies and equipment finance.
Get in touch with the PMG Finance team today on 07 4639 1011 – we’ll work with you to ensure your finance settlement proceeds as smoothly as possible, even during current embargo restrictions.
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LinkedInDISCLAIMER: The above content is to provide general information and does not constitute financial, legal or other advice. This means that duties and requirements imposed on people who give financial advice do not apply to this content. For advice contact your accountant or legal advisor.