Business interruption cover has failed to gain traction among small companies, with just 17% holding such policies, according to a QBE-commissioned study.
About 43% of the 501 business owners polled have never heard of the product, 11% are aware of it but know nothing beyond that, and 19% have looked into the product and understand it.
About 46% cite a lack of understanding for not buying the cover, 30% cite irrelevance to their business and 29% would find it an unnecessary expense.
“This report shows there is still a large gap in cover for many small businesses across Australia and, at an organisational and industry level, there is more work to do,” QBE EGM Intermediary Distribution Jason Clarke told insuranceNEWS.com.au.
“As insurers, we need to improve overall understanding of business interruption cover, highlight its importance and clearly show how it works.”
Brokers are key players in bridging the knowledge gap, Mr Clarke says.
“We will be ensuring brokers and intermediaries are aware business interruption is a priority for this sector and that they are equipped with the knowledge to improve understanding among their clients.”
QBE Head of SME Aaron Gavin, who started his new role last month, is focusing on the business interruption segment.
“Educating SMEs on how to best protect themselves will be a priority,” he said.
QBE says business interruption cover is increasingly vital as the risk landscape evolves.
Advances in technology and increasingly wild weather caused by climate change have created new threats that could affect businesses of all sizes.Source: insuranceNEWS