The risks most feared by small business owners are stolen cash, contents and stock, vehicle damage and theft, and employee theft. And they say their major reason for not taking out adequate insurance cover is the belief that their insurance policies won’t cover items that are stolen.

Australian Better Business Insurance (ABBi), a Promina-owned direct insurer pitched at micro-businesses, says in a report that Australia’s smallest businesses are underinsured and “deluded about the realities of risks”.

Almost 50% of these “micro-businesses”, which represent almost 90% of small businesses, have experienced an adverse event, and one-third have been on the brink of closure, according to the survey. ABBi GM Mike Hooton says most small businesses are taking a “very high-risk approach” considering their size and ability to recover.

Although common theft is a frequently occurring risk, most business-owners rated it as least concerning. They were most worried about being sued for legal liability or giving negligent advice – but only 3% of respondents had been hit with a public liability suit.