Is your business ready for disaster?

A new report commissioned by Business Australia has found despite the impacts of COVID and natural disasters, small business owners still fail to insure their businesses against unforeseen events.

The report found 62 per cent of Australia’s small business owners still have not taken out adequate cover. This leaves many businesses vulnerable to cost blowouts should another natural disaster strike.

Richard Spencer, Business Australia Chief Customer Experience Officer said business insurance falls into a ’lazy cost’, an administration burden that many SMEs don’t have time to keep on top of.

“If the last year has taught us anything it’s that we can’t assume the future will be fine just because we’ve had a good run,” Spencer said.

“Managing risk is a crucial part of successfully operating a business, which is why insurance is so important.”

 Insurance costs a burden for business

Currently 70 per cent of Australian businesses believe they could be doing more to reduce costs of insurance and utilities, while 33 per cent said they struggle to keep pace with the administration of their business insurance policies, according to the Business Australia data.

“Businesses are also reporting that it is difficult to find suitable insurance products, with only 4 out of 10 businesses satisfied with the ease of finding insurance.”

“Underinsurance is also cited as a big concern for SMEs.”

Impact of Black Summer still felt

Last year, the 2019-2020 ‘Black Summer’ bushfire season is estimated to have cost Australian businesses around $2 billion in total insurance loses.

There were more than 20,000 insurance claims lodged in Australia due to the bushfires, with many more businesses and individuals left uninsured or underinsured.

The recent Royal Commission into Disaster Arrangements, also referred to as the Bushfires Royal Commission, highlighted that insurance taxes, especially those imposed by state governments, were contributing to affordability issues and underinsurance.

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