THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell has initiated an insurance inquiry.
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She said the inquiry had been spurred by the multitude of complaints about insurance companies.
"There is a growing trend of insurance companies denying small businesses insurance, or pricing policies out of reach," she said.
"Small businesses that have had insurance policies for more than a decade without a single claim are being refused renewal or, if offered renewal, are discovering the cost has more than doubled.
"Many businesses with current policies have been subjected to unilateral changes that have reduced their coverage without consent, and with no refund of premiums," said Ms Carnell.
Small and family businesses that have faced difficulties with their insurance companies are encouraged to email inquiries@asbfeo.gov.au
The inquiry will investigate industry practices and whether products offered are fit for purpose.
It will investigate:
- 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;
- Timelines of insurance payouts and effectiveness of dispute resolution frameworks.
Definitions in policy documents that create de facto policy exclusions will also be considered.
Insurance is the key way that small businesses can mitigate risk to protect themselves and their families, customers and employees, said Ms Carnell.
"Without appropriate insurance, outcomes beyond the control of business owners can bring severe financial distress and the loss of assets," she said.
Submissions are open. The inquiry will report by year's end.
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