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Industry rejects criticism of insurers over Melbourne’s ‘crime crisis’

Insurers stand accused of abandoning small retailers in Melbourne as thefts spiral out of control – but brokers say affordable cover is still available.

The Herald Sun reported that insurers are “pulling back on theft coverage” amid a sharp increase in crime, and quoted one retailer as saying: “Insurance companies aren’t covering shops for thefts any more.”

A debate section on Sky News then attacked insurers for being risk-averse and leaving shopkeepers in the lurch. 

“There is a general crime crisis in Melbourne, to the point now where insurance companies are refusing to insure small businesses against theft, because they say theft is such a problem that they would literally be paying out claims all the time, and so they do not want to take on the risk,” Sky host Caleb Bond said.

“The insurance companies have had jack of it and said this is costing us too much, so now small businesses are sitting there wide open, essentially saying come and rob us, there is nothing we can do about it. This is so slack of the insurance companies.”

But National Insurance Brokers Association board member Stella Pruscino, a director at Melbourne-based Edgewise Insurance Brokers, says cover is still available and affordable. 

She says business package policies offer burglary as an option for clients, covering damage caused by forced and unauthorised entry to premises. Theft (without forcible entry) cover can also be added.

Under industrial special risks wordings, for larger businesses, burglary and theft is an automatic sublimit.

Ms Pruscino says retailers that experience multiple burglaries can expect increases in premiums and deductibles but that’s no surprise and implementing risk management strategies can assist.

“We have not seen it being priced to the point that affordability or availability is an issue,” she said. “We have not had any insurer decline to insure small retailers due to burglary, and we are not seeing premium increases for those retailers that have not had burglaries.”