The Annual Risk Health Check: Why Every SME Needs It

Your business can change a lot in a year – expanding, shifting online, hiring staff, or upgrading equipment.
Yet most SMEs forget to update their insurance when things change. If you set it and forget it, you could be left exposed when something unexpected happens. For example, a tradie leasing new equipment may need additional liability extensions. A café offering online orders may face new cyber exposures.
That’s where a quick annual risk review helps ensure your cover still fits your operations, assets, people, and risks.

Why Staying Current is Vital

According to the Insurance Council of Australia, about 83% of property owners are underinsured, lacking enough cover to fully replace what they lose.

Rising rebuild costs and supply delays widen the gap in many areas. The Australian Small Business and Family Enterprises Ombudsman also warns that under insurance is a key reason many small businesses struggle to recover after a major loss.

Meanwhile, natural disasters remain a concern, as do regulatory shifts, changes to strata titles, and compliance laws. Environmental and ESG (environmental, social, governance) reporting risks are growing issues in some industries.

And with premiums increasing sharply in 2024 due to inflation and higher claims, it’s worth checking if your policy still offers both value and adequate protection.

A broker or adviser can help you reassess your policy annually, ensuring it reflects your current risk profile, not last year’s business model.

Cyber Risks Are Changing Fast

This year, cyber risks overtook storms and fire as the top concern for SMEs, according to industry research.

More than 70% of SMEs see cyber security as a major business threat, yet half spend less than $500 a year on prevention tools. But software and staff training aren’t enough. That’s where insurance becomes critical. The Australian Cyber Security Centre continues to report rising incidents of ransomware, phishing, and scams. The average cyber incident costs small businesses over $50,000, not including reputational damage, legal claims, or lost revenue.

Cyber insurance won’t prevent an attack, but it can cover expert response, customer notification, and business interruption. Without it, even a minor breach can lead to a major fallout.

What Your Annual Risk Health Check Should Include

Your broker or adviser can walk you through a tailored review of risk management.

This includes:

• Checking that your sums insured for buildings, equipment, stock, and digital infrastructure reflect today’s rebuild or replacement costs
• Ensuring cover accounts for new risks, such as like cyber crime, remote work, or leased assets
• Reviewing exclusions, especially if you’ve added new products, services, suppliers, or sales channels
• Monitoring legal obligations and regulatory changes that could affect liability

The Cost of Inaction

Three out of four SMEs that change how they operate don’t update their insurance.

Last summer, one in six Australian households was affected by property damage. For businesses, disaster recovery costs can escalate fast, and under insurance compounds the damage. Insufficient cover can lead to long claim delays, extended downtime, lost customer trust, and financial stress. And when gaps are only found at claim time, the consequences can be devastating.

Get Your Cover Reviewed

Buying online cover may seem easy, but it’s just as easy to miss key exclusions or misjudge your asset values.

An experienced broker or adviser helps you identify blind spots and ensures your insurance fits the way you do business. Talk to us about booking a quick, tailored annual risk review, so your protection evolves, and you can focus on running your business with confidence. Don’t wait for a crisis to discover
 you’re under insured.

123 Insurance Pty Ltd ABN 67 621 727 722 ATF for 123 Insurance Unit Trust ABN 46 332 885 229 trading as Bell Partners Insurance is an authorised representative number 1259573 of Community Broker Network Pty Ltd ABN 60 096 916 184 AFSL 233750. This advice has been prepared without taking into account your personal objectives, financial situation or needs. You should therefore consider the appropriateness of the advice, in light of your objectives, financial situation or needs before following the advice. Please obtain a copy of, and consider the Product Disclosure Statement applicable to the general insurance product before making any decision.