Australian Small Business and Family Enterprise Ombudsman Kate Carnell has warned politicising the findings of her insurance inquiry risks hindering resolution of a market failure problem that is devastating firms.

“This is a critical issue that is sending far too many small businesses to the wall and what they really need right now is solutions – not a political bunfight,” she said today.

“For the sake of Australian small businesses, I hope that all sides of politics can work together on this issue to ensure small businesses have access to the insurance products that are essential for their operation.”

The inquiry final report released yesterday made 15 recommendations, with many requiring action by the Federal Government.

Opposition assistant spokesman for financial services Matt Thistlethwaite and shadow assistant treasurer Stephen Jones have criticised the Morrison Government for not taking action earlier on measures that would assist SMEs.

“Businesses recovering from the impacts of recent natural disasters and the COVID pandemic must not be forced to close because of yet more insurance inaction from the Morrison government," they said.

Labor says priorities it would welcome include requiring councils and states to undertake a suitability assessment for rezoned land, making insurers give 60 days’ notice for a renewal refusal or premium increase above 15%, requiring a clear breakdown of taxes and commissions and use of a clear list of exclusions and standard definitions.

Ms Carnell says she is disappointed by Labor’s media statement and although the report recommends a number of reforms that require government action, it is not critical of the Federal Government.

“Our inquiry found widespread market failure in regards to the availability and affordability of essential small business insurance products,” she said. “The report does not politicise this issue and I believe it is inappropriate to do so.”

Report findings were welcomed by the WA Labor Government, which supported recommendations including making the General Insurance Code of Practice and Insurance Brokers Code of Practice mandatory and taking action on public liability cover.

“Access to quality and affordable public liability insurance is critical for small businesses in both Western Australia and across the nation,” Small Business Minister Paul Papalia said.

“The ombudsman’s insurance report makes strong recommendations for a national approach to resolve this issue that is threatening to severely affect small businesses all over Australia.”

Federal Member for the southern NSW seat of Eden-Monaro Kristy Louise McBain told Parliament businesses were being rejected for cover or were being asked to pay unaffordable premiums at renewals in the wake of the last season’s Black Summer bushfires.

“Insurance underpins the jobs we need for our renewal following drought, bushfires, floods and COVID-19,” she said.

“The market and the environment have been ringing the alarm bell for years. The canary in the coalmine died long ago and is now festering on the doorsteps of households right across Eden-Monaro.”