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Time Bomb for Small Business

Many Australian small businesses risk financial hardship because they are significantly underinsured.

New research from leading commercial insurer CGU shows that 65 per cent of small businesses have no business interruption cover, 47 per cent do not adequately insure their stock and contents, and 82 per cent  of businesses do not insure them appropriately.

CGU chief executive officer Mario Pirone said there was limited awarenes in the small busienss community of the extent of the underinsurance problem.

"Most small businesses have no idea that they are underinsured or have the wrong cover until it's too late," he said. "It's only after they experience major loss that the problem comes to light."

Mr. Pirone said many small businesses are also failing to grow their insurance cover with their business operations and inflation.

"SMEs need to ensure that their insurance protection keeps pace with growth in their business and inflation," he said. "Yet many of the businesses we looked at had not increased their level of insurance protection in the past three years."

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