A recent QBE survey has revealed that nearly 29% of Australia’s micro, small, and medium enterprises (micro-SMEs) – businesses with fewer than 10 employees – would be unable to manage a financial setback exceeding $10,000. Furthermore, 23% of micro-SMEs would face significant challenges if they were uninsured.
The findings also highlight that while most micro-SMEs have insurance, many still face gaps in their coverage. Of those with insurance, 79% report feeling peace of mind, 81% feel protected, and 53% feel more confident in taking financial risks, which supports innovation and business growth.
Confidence in insurance coverage remains strong, with 83% of micro-SMEs believing their current level of protection is adequate. However, QBE’s managing director for Consumer, Julie Starley, emphasized the importance of ensuring sufficient coverage. She pointed out that claim payouts for unexpected damages and business interruptions often exceed $10,000, a sum that over half of micro-SMEs (52%) could not afford.
The survey also revealed a concerning trend: 59% of micro-SMEs have not updated their insurance since launching their businesses. This leaves many exposed to evolving risks as they grow, hire staff, or acquire new assets. Starley recommended regular policy reviews to ensure coverage aligns with a business’s changing needs.
In terms of risk management, micro-SMEs employ various strategies to protect themselves, including streamlining expenses (40%), building financial reserves (38%), and diversifying their offerings (25%). Their primary business goals include increasing profitability (50%), expanding their client base (43%), and stabilizing cash flow (42%).
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