A new Federal Government initiative will be launched next year that will bring down the cost of insurance premiums for small businesses in Northern Australia. The scheme will see the creation of a reinsurance pool backed by a $10 billion Federal Government guarantee to cover cyclone and flood damage across the northern regions of the country from 1July 2022.
The move has been welcomed by the Australian Small Business and Family Enterprise Ombudsman Bruce Billson, who said that the scheme – that matches one of the recommendations in ASBFEO’s recent Insurance Inquiry – will be a significant boost for small businesses in the north.
“This is certainly a welcome step in the right direction when it comes to ensuring essential insurance coverage is accessible to small businesses,” Billson said. “Our Insurance Inquiry revealed that small businesses have been crippled by rising insurance costs and some can’t get it at all. A reinsurance pool will go some way to addressing this key barrier for small businesses in Northern Australia.”
Billson warned that, while this initiative will improve affordability of premiums for SMEs in the north, barriers still exist for SME insurance coverage in other regions.
“In the course of our Insurance Inquiry, we spoke to over 800 small businesses – about 12 per cent of those were from Northern Australia,” Billson said. “That means there are still many small businesses out there experiencing difficulties with accessing necessary insurance coverage.
“My office is ready and willing to work collaboratively with the government, relevant agencies and the insurance industry towards making essential insurance products affordable and accessible for small businesses across the country,” Billson added. “Ultimately insurance is a necessity for small businesses to operate, which is why it is vital these products are accessible so they are protected when things go wrong.”