For most small business owners, work is often more than a nine-to-five job. It likely involves early starts, late nights and maybe even a fair chunk of family time sacrificed, with recent research showing that 90% of small business owners in Australia are preoccupied with work outside of typical hours.1
Still, no matter how much time you devote to making your venture a success, the reality of starting and running a small business is that things don’t always go smoothly, which can make having an appropriate level of business insurance in place important.2
Knowing what to do if you need to make a claim on that insurance may be just as important.3 Yet, recent industry research shows that navigating the actual steps of a claim can often feel complicated and hard to decipher for some small businesses,4 so it’s understandable if you have questions about how it all works.
For example, what kind of information or evidence will you need to give to your insurer? Are there things you should and shouldn’t do before submitting a claim? Is the insurance claims process the same whether your business has experienced damage or caused damage to someone else’s property? And what happens if your business insurance claim is denied?
To help clear up any confusion you might have, we’ve put together this guide to small business claims, which starts by outlining some of the events businesses commonly make insurance claims about.
What are some common types of insurance claims for small businesses?
While every business faces its own unique challenges and risks, there are a handful of events that can commonly lead to an owner making a business insurance claim. These include:
Damage caused by weather events
Australia has seen increasing weather-related insurance claims in recent years,5 with 34% of small to medium-sized businesses reporting losses such as property and stock damage due to events including bushfires, floods or cyclones in the five years to September 2025.6
Theft
The number of thefts in Australia hit a 21-year high in 2024 and 45% of them occurred in a retail location.7 As a result, the volume of subsequent small business claims have pushed insurance premiums up for some business owners.8,9
Interruption of business
Claims to cover ongoing business costs or reduced profits if a covered event temporarily disrupts operations10,11 account for around 15% of small business insurance payouts in Australia.12
Events that might interrupt business activities include accidents, theft or a severe weather event,10 with 42% of businesses having experienced production delays and operational downtime as a result of natural disasters in recent years.6
Third party injury claims
In 2021 – the latest year of available data – 4,032 public liability insurance claims for third party injuries were made in Australia, with the average claim costing $143,000.13
An example of a third party injury might be if a customer slips and hurts themselves on a wet floor in a store.14
Third party property damage claims
More than 15,500 public liability insurance claims for third party property damage, such as a tradie accidentally damaging a client’s fence during a job,14 were also made in Australia in 2021.13 The average claim costs $28,000.13
It’s important to note that different types of business insurance cover different types of events and risks,11 so claims can only be made if you have the appropriate insurance cover.2
For example, cover for loss or damage to your business property or equipment due to an event such as theft, fire or flood won’t cover you for a public liability claim if a customer gets injured or their property gets damaged because of your negligence and they make a claim against you.2
Similarly, the insurance claim process may be slightly different depending on whether you’re claiming for loss or damage to your business,15,16 or whether your business is responding to a claim for third party injury or property damage from someone else.17
How to file a business insurance claim for damage or loss to your business?
While the exact process involved with making an insurance claim can vary between insurers, there are some general steps to consider following after experiencing an event or incident that’s impacted your business property, stock or equipment.
Step 1: Make the situation safe
If the event your claim relates to is a natural disaster or another type of situation that involves a risk to your or anyone else’s safety, it’s important to confirm that emergency services have declared the area safe before you return to your business premises.18
Some events may also need to be reported to the police before you can make a business insurance claim.15
For example, if you have a Small Business Insurance policy with Youi and you want to make a claim, you’ll need to make a report to the police if the law requires you to do so,19 or if the claim is about:
- Insured property that’s been stolen or damaged intentionally or during an attempted theft19
- An interruption to your business that’s occurred as a result of malicious or intentional damage to your business premises, and where you have the appropriate level of cover.20
You can ask your insurance company if you’re unsure about who you need to report an incident to.15
Step 2: Check your policy
This can help you understand what you are and aren’t covered for – or, in other words, whether you’re able to make a business insurance claim for a specific event or type of damage or loss.2
You might also like to check whether your policy requires you to take steps to minimise loss – for example, moving undamaged business items or stock to a safe and secure place.2
Step 3: Gather information and evidence
It’s a good idea to gather as much information and evidence as possible about the event and the items or damage you’re claiming for. This could include:
- Photos of the relevant damage15,16
- A list of the items you want to claim for16
- Proof of ownership.15
Depending on the type of insurance claim you’re making, you may also need to provide your insurer with additional information or specific documents. For example, the Insurance Council of Australia says that a business interruption insurance claim will likely require you to submit financial documentation.21
If you’re unable to provide a particular document – for example, if it’s been lost or destroyed – let your insurer know when you contact them to lodge the claim.16
Step 4: Contact your insurer to lodge your claim
It can be a good idea to do this as soon as possible and, importantly, before you begin any clean-ups or repairs unless emergency repairs are necessary to prevent further damage.15 This is because:2
- An insurance assessor may need to inspect the damage before you begin cleaning
- Your insurance cover may be affected if you undertake repair work before an insurance assessment has taken place.2
As part of the lodgement process, in addition to any supporting documents or evidence you’ve gathered, your insurer may also ask for details such as how and when the incident happened and how it will affect your business.15
If you’re unable to provide something, for example, a document that has been lost or destroyed, let the insurer know. If you’re still unable to lodge the claim without this requested information, you should seek legal advice immediately.16
Step 5: Wait for your claim to be assessed
Within 10 business days of lodging your claim, most insurers will either make a decision or tell you they need more information.22 During this time they may:22
- Ask you for specific pieces of additional information22
- Assign an assessor to examine your claim22
Insurers who subscribe to The Code will also provide you with an estimate of the likely timeframe and process involved in making a decision about your claim. Insurers are required to keep you posted about your claim’s progress at least once every 20 business days.22
Once your insurer has completed all of their enquiries, they’ll let you know within 10 business days whether they’ve decided to accept or deny your claim. 22
How to claim business insurance if a claim for compensation is made against your business
If your business has a public liability insurance policy, it might cover your legal liability to pay compensation if a member of the public gets injured or their property gets damaged because of your negligence, and they make a claim against your business.10,23
It might also cover your business’s legal costs to defend a claim.23
The process involved in making a claim on your policy might differ between insurers, but there are a few general steps to bear in mind:17
- Put people’s safety first – If someone’s injured, administer first aid or call 000 in an emergency.
- Avoid admitting fault – Take care not to admit liability or to speculate on the causes of the incident at the scene.
- Record the facts – Take note of important details such as the date and time of the incident, a description of what happened, the names and contact details of people involved, including witnesses, and take photos of anything that might be relevant.17
It can also be a good idea to check your public liability insurance policy to make sure you understand when you’re required to inform your insurer about an incident that could result in you needing to make a claim.17
And bear in mind that while limitation periods differ around Australia in terms of how long a third party has to make a claim, in some cases someone who’s sustained a personal injury has as long as three years to start the process.23
What can affect whether your small business claim is approved?
According to the Insurance Council of Australia, insurers accept around 96% of all insurance claims. However, there are a few reasons why a small percentage of claims, including small business-related ones, might be denied, such as:24
- Policy exclusions – Insurance policies contain a list of specific situations, circumstances or events that aren’t covered.
- Failure to meet the policy’s terms and conditions – You’ll find these listed in your policy’s Product Disclosure Statement (PDS).
- Policy cancellation – If your policy hasn’t been renewed or you haven’t paid a premium, you’ll usually be unable to make a claim.
- Failure to disclose something to your insurer that might affect your risk – If you don’t do this when you take out or renew a policy, it may affect your ability to make a successful claim.24
What can you do if your business insurance claim is denied?
If you disagree with your insurer’s decision, as a first step, you can contact them to explain:15
- That you’d like to lodge a dispute with them
- What you think the problem is
- What you’d like them to do to address the issue.15
If you disagree with the outcome after your insurer has addressed your dispute, the Australian Financial Complaints Authority (AFCA) can help small businesses and insurance companies reach a resolution.15
How does the small business claims process work at Youi?
“At Youi, we make it our business to review all claims fairly and as quickly as possible,” says Mervyn Hartley, Youi’s Head of Product – Home and Small Business.
The first step is lodging a claim, which you can do over the phone or anytime online. You’ll just need to provide your policy number and details of the incident.
“From here, we have specialist claims advisors that focus on handling business claims.” says Hartley.
“We keep the process as simple and transparent as possible so that once you’ve made a claim, you’ll know what’s next.”
What does Youi Small Business Insurance cover?
Youi’s Small Business Insurance automatically includes Public and Products Liability cover.19
“Business owners can choose from three levels of business liability cover – $5million, $10million and $20million,” says Hartley.19
“They can also choose from several optional covers to add to a Small Business Insurance policy at Youi, for an additional cost.”
Some of these optional covers include:
- Business interruption – If an unexpected event forces you to temporarily close your doors or you’re unable to run your business as usual, this helps cover your lost profit and extra operating costs.20
- Business property damage – Under this optional cover, contents at your business premises are covered for loss or damage caused by events such as fire, storm, flood or theft. Stock in trade is also covered both at the premises and while it’s in transit to or from your business, and refrigerated food or stock is covered for deterioration.25,26
- Business items – This covers loss or damage to your portable business items, including electronic devices and tools of trade, anywhere in the world.27
- Glass – There’s also the option to add cover for loss or damage to the glass you’re responsible for at your business premises,28 such as windows, even when you’re leasing.29
- Money – Your business cash is covered for loss or damage with this add-on.30
Starting and growing a small business takes a huge amount of dedication and as we’ve highlighted in this guide, the reality is that sometimes things don’t always go to plan. But, while you can’t predict when an unexpected event might impact your hard work, understanding how the small business claims process works and having an appropriate level of business insurance in place could help you get back up and running sooner rather than later.2
If you’d like to learn more about the cover provided by Youi Small Business Insurance, consider giving our dedicated Small Business team a call on 1300 010 648 or starting a quote online.
1 Source: AMP – Small business owners ‘always on’ while much of Australia enjoys the summer holidays, January 2026
2 Source: Qld Government Business Queensland – Business insurance, September 2024
3 Source: WA Government Small Business Development Corporation – The hidden risks of being an underinsured business, December 2025
4 Source: Master Builders Australia – Submission to Parliamentary Joint Committee on Corporations and Financial Services, March 2025
5 Source: APRA – Inquiry into small business insurance, March 2026
6. Source: ScotPac – SME Growth Index, September 2025
7 Source: Australian Bureau of Statistics – Recorded Crime – Victims, September 2025
8 Source: ABC News – Business insurance premiums soar as repeat crime pushes up costs, October 2024
9 Source: Insurance Council of Australia – Small business Insurance submission, February 2026
10 Source: Business Victoria – Find the right insurance, October 2022
11 Source: Australian Government – Types of business insurance, n.d.
12 Source: Scale Suite – Business Interruption Insurance: A Comprehensive 2026 Guide for Australian Businesses, May 2025
13 Source: APRA – NCPD Analysis: Review of claims trends and affordability of public liability and professional indemnity insurance in Australia, May 2023
14 Source: Sprintlaw – Public Liability Insurance Explained: Why Your Business Needs It, February 2025
15 Source: Australian Government – Manage your business insurance, n.d.
16 Source: NSW Government Small Business Commissioner – Quick guide to making insurance claims, n.d.
17 Source: Sprintlaw – Reporting A Customer Injury: What Australian Businesses Should Do, January 2025
18 Source: NSW Government Small Business Commissioner – Disaster recovery – preparing to get back to business, March 2025
19 Exclusions, limits and additional fees may apply. For full details, see the Small Business Insurance PDS.
20 An additional cost applies for optional covers. Conditions, limits and exclusions apply. For full details, see the PDS & Policy Wording.
21 Source: Insurance Council of Australia – What do I need to provide to make a Business Interruption claim?, n.d.
22 Insurance Council of Australia – General Insurance Code of Practice, October 2023
23 Source: Insurance Council of Australia – Small business insurance – public liability insurance submission, March 2026
24 Source: Insurance Council of Australia – Q: What are some reasons that insurers may deny a claim?, n.d.
25 Business Property Damage cover is optional and an additional cost applies. Conditions, limits and exclusions apply. For full details, see the PDS & Policy Wording.
26 Loss or damage caused by flood, storm or bushfire within the first 72 hours of your policy commencing is only covered in limited circumstances. For full details, see the PDS & Policy Wording.
27 Business Items cover is optional and an additional cost applies. Conditions, limits and exclusions apply. The most we will pay for each item is $2,500, up to a total of the Business Items amount noted on your policy schedule per claim, unless a High Value Business Items amount is noted on your policy schedule, in which case the most we will pay for all items with a replacement value of more than $2,500 is the High Value Business Items amount shown on your policy schedule.
28 Glass cover is optional and an additional cost applies. Conditions, limits and exclusions apply. For full details, see the PDS & Policy Wording.
29 Source: Qld Small Business Commissioner – Repairs and maintenance, n.d.
30 Money cover is optional and an additional cost applies. Conditions, limits and exclusions apply. The most we will pay for each claim is the insured value for your business’s money. For full details, see the PDS & Policy Wording.
