FCVic have submitted a detailed response to the Federal Parliamentary Inquiry into Small Business Insurance, outlining how current insurance market conditions are contributing to financial hardship among small businesses and sole traders. Drawing on the experiences of financial counsellors across Victoria, the submission highlights escalating premium volatility, increasing excess levels, declining availability of suitable products, and the growing number of businesses becoming effectively uninsurable. FCVic notes that these pressures are especially pronounced in regional communities and high‑risk industries, where limited competition and rising costs create inequitable and unsustainable outcomes.

The submission also raises concerns about opaque policy exclusions, the widespread risks of underinsurance, and the failure of many products, particularly business interruption and cyber insurance, to reflect contemporary business models. FCVic emphasises that delays and disputes in claims handling can cause severe financial stress, with some businesses unable to resume trading for extended periods. The role of insurance brokers is identified as an additional risk factor, with inconsistent advice contributing to both underinsurance and overinsurance, leading to significant financial consequences.

FCVic calls for stronger regulatory settings to ensure that insurance products are affordable, transparent, and fit for purpose. Key recommendations include making the General Insurance Code of Practice mandatory and enforceable, improving the clarity of policy terms, lifting product design standards, and strengthening accountability across the insurance and broking sectors. The submission underscores the urgent need for reform so that insurance once again serves as a reliable safety net that supports small business viability and community resilience.