Businesses still not running for cover despite COVID

Even as COVID-19 and its continuing effects raised the awareness among businesses to be prepared for any event, however unlikely, many Australian enterprises lack adequate insurance cover to deal with another pandemic or natural disaster.

New research by Business Australia reveals that that 62 per cent of SMEs still have not taken out adequate coverage, with 70 per cent of those surveyed believing they could do more to reduce costs of insurance and utilities. A third of respondents said that they don’t have more cover due to struggling with the administration of their business insurance policies.

Richard Spencer, Business Australia Chief Customer Experience Officer said that the issue for many SMEs is that business insurance falls into a “lazy cost” or administration expense that they 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.

“Businesses are also reporting that it is difficult to find suitable insurance products, with only four out of 10 businesses satisfied with the ease of finding insurance,” Spencer added.” Underinsurance is also cited as a big concern for SMEs.”

The report noted that last year’s bushfires cost Australian businesses around $2 billion in total insurance loses, with more than 20,000 insurance claims that were filed while many more businesses and individuals left uninsured or underinsured.

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

The release of the report was tied with the news of Business Australia’s partnership with Aon to help businesses navigate the complexities of business insurance. The new referral service will offer a simple and effective option to any Business Australia member who wants to address concerns about insurance, review their current cover or access alternative insurance.

“Our common goals are to ensure that all Australian businesses remain supported through these times, and that means putting into place the right programs for each business and helping clients make fact-based decisions around issues such as insurance and risk exposure,” Kevan Johnston, Managing Director – Commercial at Aon, said.

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