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BizCover urges small businesses to review their business insurance ahead of summer.

BizCover 3 mins read

The ‘silly season’ is the biggest time of the year for many small businesses. But with their minds on increased summer trading, small business owners may be overlooking a key risk: underinsurance.

“Underinsurance is more than just an industry buzzword,” says Brad Miller, General Manager of BizCover, Australia’s leading small business insurance platform. “For many small business owners, underinsurance could mean the difference between staying in business or being forced to close up shop.”

Understanding underinsurance

Defined by the Insurance Council of Australia as not having “enough insurance to cover the replacement value of the items you’re insuring”, underinsurance is common in Australia. However, many small businesses may not realise how devastating underinsurance can be.

A 2022 survey of Australian small and medium businesses by insurer Vero, found that only 43% of respondents thought they were completely covered. Just over half (51%) said they were mostly covered, while 6% admitted they were only partially covered.

Alarmingly, over one-third (34%) of the business owners who were either mostly or partially covered had no alternative plan if the worst were to happen to their business. Another 20% said that a negative event would mean selling, shutting down or temporarily closing their business.

Christmas trading may increase risks

Underinsurance is a year-round issue for small businesses but may be more pressing during the silly season rush.

Summer trading is not business as usual for many businesses. Changes in how they operate from November to February may increase risks or create new ones.

“A classic example is a retail shop storing more stock in the lead up to Christmas,” says Miller. “If a fire or storm damages your retail stock, you could be out of pocket replacing it without the right type of insurance—in this case reviewing or adding appropriate Contents cover to a Business Insurance Pack.”

Small businesses may also want to check that other policies are still current. Public Liability insurance is typically required to lease a commercial premises, but it’s not unheard of for business owners to accidentally let these policies lapse.

Helping small businesses battle underinsurance

While underinsurance may be widespread amongst Australia’s small businesses, correcting it can be easy.

By thinking about their business—such as how it operates, what activities or products it offers, and their industry—small business owners can begin to decide what types of insurance may benefit their business or might be required for them to trade.

Reviewing your insurance cover today may save you from being underinsured tomorrow.


*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.

© 2023 BizCover Pty Limited, all rights reserved. ABN 68 127 707 975; AFSL 501769

Key Facts:

Fifty-seven (57%) of Australian small and medium businesses are not completely covered for their business risks according to insurer Vero.

·        Increased trading and changed trading situations during the summer may increase a small business’ operating risks or create new ones.

About us:

Launched in 2008, BizCover is a Sydney-based Insurtech company that is shaking up the insurance industry.

BizCover's founders were troubled by the merry-go-round small businesses had to go on just to get the right insurance cover for their business, so they set out to give small businesses a fair go.

In an industry dominated by big players, time-consuming paperwork, and poor service levels, BizCover's online service boldly disrupted the insurance market by developing a platform that simplifies comparing and buying insurance from some of Australia's leading insurers.

Now more than 200,000 small businesses trust BizCover with their insurance.

Contact details:

Sharon Kenny

Head of Marketing

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