In a year that has delivered devastating bushfires, and then followed those up with a global pandemic, one of the things salon owners have probably been thankful for, is their insurance policies.
That said, according to Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman, there is a growing trend of insurance companies denying small businesses insurance and pricing them out of the market. In fact, she has launched an inquiry into insurance companies’ practices.
“Small businesses that have held insurance policies for over a decade without a single claim have been refused renewal,: Ms Carnell said. “Others have discovered their renewal cost has more than doubled. We know of cases where small businesses with current policies have been subjected to major changes that have reduced their coverage without consent, and with no refund of premiums.”
The insurance inquiry will target a range of issues affecting small businesses including:
- The availability and coverage of insurance policies provided to small business
- Insurance policy affordability
- The role of brokers in getting the right coverage
- Contract changes that have not been agreed to and whether they amount to Unfair Contract Terms
- Timeliness of insurance payouts and effectiveness of dispute resolution frameworks
- The effectiveness of relevant codes of conduct and legislation, including if applicable penalties are adequate
“Insurance for small business is a practical and legal necessity. Small businesses can’t operate without public liability insurance but we are seeing entire industries either denied or facing unacceptably high charges,” says Ms Carnell. “It’s a major issue that is forcing some small businesses to close. This creates a serious risk to Australia’s economic recovery at a very precarious time.
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