The National Insurance Brokers Association has called for a review of the regulatory definition of small business and proposed action to help non-profits in a submission to a parliamentary inquiry into SME cover.

NIBA says definitions are inconsistent and the limited retail products list in the Corporations Act can create a protection gap when small companies are classified as wholesale clients.

“Public liability, professional indemnity, cyber and business interruption are exactly the types of coverage small businesses most need,” it says. “Yet, they are the products for which the regulatory framework offers the least consumer protection.”

NIBA has made 12 recommendations to the federal inquiry that address systemic barriers to affordable cover and sector-specific challenges.

It says compliance obligations should be “right-sized” for broking, as rules aimed at investment advice impose disproportionate costs without commensurate benefit. It stresses that access to brokers delivers better outcomes.

“Any reform that diminishes this access will harm consumers, not protect them.”

The non-profit sector represents one of the most acute examples of market failure, and the government should facilitate – but not directly underwrite – solutions, NIBA proposes.

Industry-led mechanisms could restore capacity for high-risk activities, without premium distortions that typically accompany government-backed schemes, it says.

Other recommendations include harmonising workers’ compensation, more suitable insurance requirements in government tenders and contracts, more focus on cyber education, a review of public liability cost drivers, and expanded resilience grants and incentives for SMEs and non-profits.

QBE Australia Pacific, which insures about 500,000 small businesses, also backs resilience action and reforms in areas such as removing duties and levies, and reducing unnecessary regulation.

“Improving affordability over the long term means looking beyond short‑term market cycles and focusing on what actually reduces risk and cost – stronger mitigation, better risk management and practical education,” Australia Pacific CEO Sue Houghton said.

“Progress is being made, but there is more work to do to deliver sustainable outcomes for small businesses.”

QBE notes that navigating several small business definitions has implications across product design, disclosure and dispute resolution.

“Consistent definitions would assist insurers by reducing regulatory complexity and facilitating operational efficiency across systems and processes.”

The inquiry, due to report on October 27, has published more than 80 submissions. They are available here.