What your insurance covers

While most policies exclude a pandemic, business owners should ensure they are protected from flow-on risks

- Anthony O'Brien

The past few months have dished up plenty of hits to the small business sector. After a tough summer of drought and bushfires, the businesses face what could be their toughest test yet.

Research by online lender OnDeck Australia shows 86% of small businesses have been impacted by Covid-19, with one in two severely affected. Many owners may assume they’re covered by insurance. The reality, though, could be different.

Insurance simply won’t come to the rescue of many businesses. Part of the problem is that among Australia’s 800,000plus small businesses, one in four have no business insurance at all.

This is a particular concern because a survey by insurer QBE found 87% of owners agree that a liability claim could put them out of business. If faced with a claim, most would likely run up huge personal debts to pay the bill.

Among businesses that do have business insurance, the issue of whether they are covered for losses brought about by the coronavirus can be confusing. Unfortunately, many are not directly protected against a pandemic.

Business interruption