29% of micro-SMEs can't handle $10k setback despite coverage

59% of micro-SMEs have not updated their insurance since starting their business.

Nearly a third (29%) of Australia’s micro, small and medium enterprises (micro-SMEs) say they could not manage a financial setback exceeding $10,000, whilst 23% would struggle with any financial disruption if uninsured, revealed a QBE survey.

The report finds that amongst those with coverage, 79% experience peace of mind, 81% feel protected, and 53% are more confident in taking financial risks, enabling innovation and growth.  

Confidence in insurance coverage remains high, with 83% of micro-SMEs—businesses with fewer than 10 employees, representing up to 2 million enterprises—believing their current level of protection is sufficient. 

QBE managing director, Consumer, Julie Starley, emphasised the importance of adequate coverage, noting that claim payouts for unforeseen damages and business interruptions often exceed $10,000—an amount more than half of micro-SMEs (52%) would be unable to afford. 

Despite their “resilience”, 59% of micro-SMEs have not updated their insurance since starting their business, leaving them exposed to evolving risks as they scale, hire staff, or acquire new assets. 

Starley advised regular policy reviews to ensure coverage remains relevant to changing business needs.  

The report also outlined risk management strategies used by micro-SMEs, including streamlining expenses (40%), building financial reserves (38%), and diversifying offerings (25%). 

Their key aspirations include increasing profitability (50%), expanding their client base (43%), and stabilising cash flow (42%).