Non-Insurance in the Small to Medium Sized Enterprise Sector


In 2007, the Insurance Council undertook analysis into non-insurance in the small to medium-sized (SME) business sector.

The Insurance Council survey of SMEs was conducted by Woolcott Research in early September 2008. The Insurance Council made use of Woolcott's monthly omnibus survey, which covers 1000 registered Australian small businesses defined as those with less than 20 full-time employees.

Sole traders accounted for about 25 per cent of the sample population while businesses with 1-4 employees, 5-10 employees and 11-19 employees accounted for 42 per cent, 22.1 per cent and 10.4 per cent of the sample population respectively.

The key findings of the report were:

  • 26 per cent of all SMEs do not have any form of general insurance.
  • Sole traders have the highest rate of non-insurance with 40 per cent operating their business with no general insurance.
  • Of the SMEs that purchase general insurance, 94 per cent indicated they considered that they were adequately insured. Taken together with the rate of non-insurance, this means that under two thirds of all SMEs have adequate insurance.
  • More than 80 per cent of SMEs who indicated that they were inadequately insured cited the cost of insurance as a barrier to purchasing. Reform of taxation on general insurance products would therefore reduce the cost burden to SMEs and contribute to a reduction in the incidence of non-insurance amongst SMEs.
  • For most small businesses, profit expectations do not appear to impact on planned insurance coverage, at least in the short term. 50 per cent of respondents indicated they would leave their insurance coverage unchanged despite the expected change in profits over the coming year.

View the Non-Insurance in the Small to Medium Sized Enterprise Sector report