Recommendations to improve insurance affordability

The decline in insurance affordability and accessibility is a growing concern for small businesses in NSW, a report from the NSW Small Business Commission has concluded.

The Commission has recommended the NSW Government set up an insurance coordination function to help reduce impediments to small businesses getting affordable insurance, assess government policies for their impact on the insurance market and work with other governments on a national approach to reform.

The report also highlighted direct actions the government could take, such as reducing insurance levies for small business and easing requirements for insurance during tender processes.

NSW Small Business Commissioner Chris Lamont said that while the problems in the insurance market were complex, there were a range of issues that all levels of government should consider.

“While there may not be a silver bullet, governments have policy levers to drive better outcomes for small businesses and in doing so reduce insurance costs and increase coverage,” Mr Lamont said.

A quarter of all small businesses reported difficulty accessing appropriate insurance.

“Insurance can be unaffordable and even unavailable for small businesses in areas like public liability, professional indemnity and construction,” Mr Lamont said.

“Small businesses in certain locations, such as those at higher risk of flooding, can also find insurance unaffordable.

“It is leading to significant underinsurance in the areas that most need it.”

Read the report, Small business insurance: contemporary challenges and experiences.