Businesses in Queensland have admitted they are not taking out the required insurance because they cannot afford to get cover, according to the Chamber of Commerce and Industry Queensland (CCIQ).
CCIQ General Manager Nick Behrens explained the organisation's latest Pulse Survey has revealed growing insurance premiums are the third-biggest burden on Queensland businesses.
"Rising insurance premiums are affecting all Queensland businesses," he said in a March 17 media release.
"The price hikes are a combination of a number of factors which have jacked up premiums and created a perfect storm in some regions, especially in North and Far North Queensland."
And it's not just the northern regions that are suffering, Mr Behrens continued. He pointed out how premiums across the entire state are "soaring" beyond business owners' reach.
"Australian insurance companies' own insurance costs are increasing on the back of rising global reinsurance costs, which is then passed on to Queensland policy holders," he explained.
Add to this the cost of natural disasters over recent years and it's not surprising that insurance companies are facing difficulties recovering profits.
"There are also concerns that some companies are deliberately pricing themselves out of the northern Queensland market to avoid further exposure to the risk of natural-disaster-prone regions," Mr Behrens revealed.
Unfortunately, when organisations face increased operating costs, business insurance can be the first expense dropped in an effort to save on costs. However, the practice of removing benefits and reducing cover can have significant effects on business operations and employee morale.
"CCIQ is concerned that some Queensland businesses may now be inadequately protecting their assets with underinsurance or, alarmingly, no insurance," said Mr Behrens.
Underinsurance is a major issue among businesses across Australia. Failure to take out comprehensive insurance can mean businesses are left out of pocket and struggling to stay afloat when unexpected loss occurs.
It is therefore important to find alternative measures to cope with rising premiums, rather than reduce the level of cover your business holds.
For example, you can speak with the general insurance advisor at HICA for an insurance comparison to see if there is a more cost-effective, suitable insurance product on the market.
If you would like more information or advice regarding rising insurance premiums, get in touch with the team at HICA today.
HICA is a specialist business health insurance and general insurance broker that can offer expert advice and guidance on all relevant corporate insurance plans and products.