Business NSW Central Coast has backed calls from Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, for a revamp of regulations surrounding insurance for businesses.
Carnell has called on the Federal Government to implement the recommendations of her Insurance Inquiry, saying too many small businesses are being forced to close their doors because they can’t get public liability insurance.
She says the government needs to take urgent action to ensure that small businesses can access essential insurance products such as public liability.
“Throughout the course of our inquiry, hundreds of small businesses told my office that they face closure if insurance remains unavailable to them,” Carnell said.
“Small businesses have told us they have either been denied insurance outright or their premiums have as much as tripled in a few years, effectively pricing them out of the market.
“Our Insurance Inquiry has made recommendations addressing the lack of availability of public liability insurance, which is in large part attributable to the unlimited nature of injury claims and the potential for large damages to be awarded.
“Our report recommends that Australia follow the lead of New Zealand, which has applied statutory caps on liability for personal injury.
“The government should also implement the Productivity Commission’s recommendation to roll out a no-fault National Injury Insurance Scheme (NIIS) to cover lifetime care for catastrophic injuries.
“It’s been nine years since the Productivity Commission released its Report into Disability Care and Support and yet the NIIS is still under consideration, much to the detriment of the small business sector.
“Ultimately, the risk environment for public liability litigation can only change through government intervention and the current framework of fault-based injury compensation creates uncontrollable risks for insurers and small businesses.”
Business NSW Central Coast Regional Director, Paula Martin, said it had been concerning to see how many businesses without appropriate insurance have been unable to trade when hit by recent disasters.
“The experience of 2020 highlights how important it is for business to get proper advice by insurance specialists to minimise the impact on their business if disaster strikes,” she said.
“We surveyed almost 2,000 small businesses and found that 70% of business owners believed they could be doing more to reduce costs of insurance.
“Over a third of business owners find it complex and struggle to keep up with the administrative side of insurance policies, which is why Business Australia partnered with AON to help business ensure that they are properly protected.
“With 62 per cent of small business yet to take out adequate cover, the new referral service will simplify the insurance review and help to find the right insurance for business.
“The next few years for business will continue to be volatile and fragile, so a review of the insurance regulatory environment to make insurance more affordable at both a State and Federal level is vital to reduce business costs and remove unnecessary barriers to our economic recovery.”