The report reveals that many SMEs are compelled to either forgo insurance coverage or reduce their policies to manage escalating costs. Some businesses have reported premium hikes of 30% or more within a single year, making insurance an unmanageable burden rather than a protective safety net.
To mitigate these challenges, the report recommends several key actions:
- Abolishing taxes on insurance policies to reduce overall costs.
- Initiating a Productivity Commission review of small business insurance expenses to identify and address cost drivers.
- Establishing a national small business insurance and risk support body to provide guidance and resources.
- Collaborating with insurers to develop tailored products that meet the specific needs of SMEs.
- Reforming civil liability laws to create a more balanced and fair legal environment.
Andrew McKellar, CEO of the ACCI, emphasised the critical nature of these reforms: "Insurance should be an essential safety net for small businesses, not an unmanageable burden. Yet we hear time and again from businesses that insurance costs are spiralling out of control, with some reporting premium hikes of 30% or more in just a year."
For business owners, these developments underscore the importance of staying informed about policy changes and actively participating in advocacy efforts. Engaging with industry associations and providing feedback to policymakers can help shape reforms that address the unique challenges faced by SMEs.
In the interim, businesses should conduct thorough reviews of their insurance needs, exploring options to optimise coverage while managing costs. Consulting with insurance brokers who understand the SME landscape can provide valuable insights and assistance in navigating the current market.
Ultimately, a collaborative approach involving government bodies, industry associations, insurers, and businesses is essential to develop sustainable solutions that ensure SMEs can access affordable and comprehensive insurance coverage.
