Nearly 65% of all home-based businesses are operating with either the wrong type of insurance or no cover at all, according to a study by the Business Enterprise Centre Australia. The study, run in conjunction with Promina’s SME direct insurer Australian Better Business Insurance (ABBi), reinforces the industry’s view that there is “a massive black hole of understanding or knowledge” when it comes to small businesses’ knowledge of insurance policies.

But ABBi GM Mike Hooton says the statistics highlight “a lack of focus from the insurance industry on the specific needs of this growing sector”.

“There are 778,000 home-based businesses in Australia and far too many think their business equipment, stock and business liability are covered under their home and contents insurance policy,” Mr Hooton said. “This issue has not been fully addressed by the insurance industry which must take some of the responsibility for not raising awareness of the risk home-based businesses carry by relying on their home insurance.”