Almost 9 out of 10 (87 per cent) small business owners agree that a business liability claim has the potential to put them out of business, cause them to lose revenue, or dry up cash flow.
According to the QBE SMEs and Insurance Report, despite these risky stats, 62 per cent of SMEs said they are unlikely to have the right insurance in place to protect their business.
“When people think of insurance they tend to think more of their tangible assets like property, the business property or electronic equipment first,” says Aaron Gavin, QBE General Manager, Small to Medium Enterprises. And while assets are important, some of the most commonly occurring claims are when someone has injured themselves while on a business premises or involved in that business.
“This means that liability is the most commonly taken cover in small to medium enterprises,” Gavin explains. The incidents that can have the highest financial impact on your clients’ businesses are not always the most commonly occurring incidents. And many of these high cost claims incidents relate to injuries, not just to property damage. So, it’s important to help broking clients protect their customers, their business, employees and themselves through adequate insurance coverage.
“Most people understand they need some kind of liability insurance, but two of the key insurance mistakes people make are being underinsured for business property and business continuity,” Gavin points out.
Insurance brokers must remind their clients that as business owners, they are accountable to all third parties that came into contact with the business, including customers and suppliers.
The report surveyed over 600 Australian SMEs on their insurance habits in April 2019. You can access the full findings here.