The Australian Small Business and Family Enterprise Ombudsman Bruce Billson says insurance premiums will be more affordable for small businesses in Northern Australia, under a new Federal Government scheme to launch next year.

Mr Billson welcomed plans for a reinsurance pool to be backed by a $10 billion Federal Government guarantee to cover cyclone and flood damage across Northern Australia from July 1, 2022.

He says the scheme, which is broadly in line with a recommendation in ASBFEO’s Insurance Inquiry, will make a significant difference.

“This is certainly a welcome step in the right direction when it comes to ensuring essential insurance coverage is accessible to small businesses,” Mr Billson says.

“Our Insurance Inquiry revealed that small businesses have been crippled by rising insurance costs and some can’t get it at all.

“A reinsurance pool will go some way to addressing this key barrier for small businesses in Northern Australia.”

Mr Billson says he also recognises barriers still exist for SME insurance coverage in other parts of Australia.   

“In the course of our Insurance Inquiry, we spoke to over 800 small businesses – about 12% of those were from Northern Australia,” Mr Billson says.

“That means there are still many small businesses out there experiencing difficulties with accessing necessary insurance coverage.

“My office is ready and willing to work collaboratively with the government, relevant agencies and the insurance industry towards making essential insurance products affordable and accessible for small businesses across the country.

“Ultimately insurance is a necessity for small businesses to operate, which is why it is vital these products are accessible so they are protected when things go wrong.”