By John Schroder, general manager for SME, QBE Insurance 

Micro-SMEs – businesses with fewer than 10 employees – play a vital role in the Australian economy, demonstrating resilience, adaptability and a drive for growth.

However, as they scale – whether by investing in new equipment, hiring staff or taking on more clients – their risk profiles change.

Some may continue to operate with outdated or inadequate policies, which could leave them vulnerable to financial setbacks that might threaten their success.

Our recent survey on micro-SME attitudes towards insurance underscores the scale of this issue. While 42% of these businesses have experienced revenue growth in the past three years, 59% have not updated their insurance coverage since first purchasing it.

The financial reality of this gap is significant. Micro-SMEs are increasingly exposed to operational disruptions – whether from supply chain delays, cyber threats or extreme weather events – yet many lack the ability to withstand them.  

More than half of micro-SMEs report difficulty recovering from financial setbacks exceeding $10,000, and 24% say they could not absorb any setback.  

Without the right coverage in place, a single uninsured event could turn business growth into financial strain. This presents a critical challenge – one brokers are uniquely positioned to address, by ensuring coverage keeps pace with evolving needs.  

One significant and growing area of risk is contractor reliance. Our survey found 29% of micro-SMEs employ contractors, with almost 70% of those spending 10%-50% of their labour costs on contracted workers. This shift towards a more flexible workforce introduces new liabilities, yet many business owners may not realise their policies do not adequately cover these risks. 

For example, a small construction business might assume their public liability policy covers contractor incidents, only to find out it doesn’t when an uninsured contractor causes damage on-site. 

A broker can help identify these blind spots before they become costly, and play a key role in educating clients about the nuances of contractor liability.

By aligning policies with the unique needs of micro-SMEs, brokers can do more than just provide coverage – they can help businesses build resilience, so they are better equipped to weather uncertainties. 

A proactive approach to risk management is key, and brokers are well placed to guide clients through solutions that go beyond traditional claims support. 

Working closely with insurers, brokers can help micro-SMEs understand their specific exposures, access practical tools to mitigate risks, and take small, actionable steps towards greater operational stability. 

Ultimately, micro-SMEs want to concentrate on running their businesses, and having the right insurance doesn’t just help protect against losses – it can enable growth. 

In fact, more than half (52%) of business owners report feeling more confident in taking financial risks when they know they have the right coverage.

By positioning themselves as proactive risk advisers rather than just policy providers, brokers can empower these businesses to grow with security and certainty – helping to ensure the micro-SME sector doesn’t just survive but thrives.

QBE’s survey results can be found in the report Adapt, Protect and Thrive – How Micro-SMEs Navigate Risk and Opportunity.