Aon Risk Services MD Peter Harmer is the latest industry leader to raise concerns about the low level of commercial insurance. Fresh from buying International Valuations Consultants, Mr Harmer said many Australian businesses are jeopardising their futures by failing to accurately value and insure their businesses.

Quoting a recent Insurance Statistics Australia report, Mr Harmer said 20% of small business buildings are not insured at all, and 50% are either severely or significantly underinsured. “The survey also found that 90% of small business plant is significantly underinsured,” he said.

His comments came hard on the heels of a disturbing NRMA survey of more than 1200 small businesses about their insurance arrangements. It found 47% of all businesses surveyed believe they are not adequately covered by their policies.

Although all the businesses surveyed were covered by some type of insurance, many said their premiums were too expensive. Doug Pearce, Chief Commercial GM at NRMA, said the second most cited reason for a business being underinsured was “not having enough time to make sure they were adequately insured”.

The survey found that more than 40% of small businesses have no BI cover and 30% conducted a proper review of their insurance only after they had been broken into.