The federal government has announced a guarantee for insurers in the form of a $10 billion reinsurance pool to cover cyclone and flood damage across northern Australia from 1 July 2022.
Applauding the announcement, the Australian Small Business and Family Enterprise Ombudsman Bruce Billson said this initiative will ensure insurance premiums are more affordable for small businesses.
“This is certainly a welcome step in the right direction when it comes to ensuring essential insurance coverage is accessible to small businesses,” Mr Billson said.
The ASBFEO’s Insurance Inquiry, spearheaded by former ombudsman Kate Carnell, revealed that small businesses have been crippled by rising insurance costs.
“A reinsurance pool will go some way to addressing this key barrier for small businesses in northern Australia,” Mr Billson noted.
The ASBFEO, however, underlined the existence of barriers for SME insurance coverage in other parts of Australia.
“In the course of our Insurance Inquiry, we spoke to over 800 small businesses – about 12 per cent of those were from northern Australia,” Mr Billson said.
“That means there are still many small businesses out there experiencing difficulties with accessing necessary insurance coverage.”
In a bid to secure more affordable insurance products for small businesses across the country, Mr Billson said his office stands ready to work “collaboratively” with the government, relevant agencies and the insurance industry.
“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,” he said.
