Micro-SME owners are increasingly confident in their operations if they are insured, according to a survey by QBE.

The poll of 1000 sole traders and businesses with fewer than 10 employees found 81% of insured respondents feel “completely or mostly protected thanks to their coverage”.

A further 79% say their policies help provide peace of mind.

In a report titled Adapt, Protect and Thrive: How Micro-SMEs Navigate Risk and Opportunity, QBE says insurance has helped fuel innovation and growth for micro-business owners, with 53% of respondents reporting more confidence in taking financial risks.

About 83% of micro-SME owners feel confident in their coverage, and 65% say peace of mind is a notable reason for buying insurance. About 52% want cover against financial losses and 48% hold policies because they are required to by law.  

Among more concerning findings, 24% of respondents say their business could not handle a financial setback, while 28% could only manage unexpected out-of-pocket expenses of up to $10,000.  

Many micro-SMEs rely on alternative ways to mitigate risk, including saving money, managing expenses or diversifying offerings.  

“We know based on our claims data that the average payout for a micro-SME for unforeseen damages, including to their property and subsequent interruption to their business, is well over $10,000, a cost that more than half of Australian micro-SMEs would not be able to afford,” QBE consumer MD Julie Starley said.  

She says it is important for micro-SMEs to have coverage that goes beyond their business, such as contractor protections.  

“Nearly one-third (29%) of micro-SMEs employ contractors, and for 31% of them, contractors account for more than half of their labour costs,” Ms Starley said.

“This adds complexity to their risk profile, making it crucial to have insurance solutions that cover contractor liabilities, new equipment and operational disruptions.”  

The full report can be accessed here.