A quarter of small businesses in rural and regional Australia would not survive a short-term closure, according to new research.

With few small businesses in rural districts along Australia’s east coast covered by business interruption insurance, many would not survive if weather or other events forced a temporary closure of their business, a survey by Quality Online Research for CGU has found.

Nearly 40% would shut shop permanently if a closure of three months was forced on them during a busy period, while 62% of businesses with less than four full-time employees would be on the brink of closure.

The survey of 477 businesses also found that 14% of respondents had experienced an income shortfall over the past 12 months.

CGU GM Retail Mark Searles says less than a quarter of the small businesses surveyed have business interruption cover.

While he agrees small businesses are run on tight margins, he says business interruption insurance is an important part of any insurance package.

“Small businesses insure their premises, their employees and their equipment,” he said. “They really need to insure the livelihood of their business too.

“Small businesses are the backbone of their communities, particularly in regional and rural areas, so it’s important for local operators to protect these valuable jobs.”