The review examined seven broker businesses and more than 1,000 strata representatives. It resulted in nine breach determinations, with two brokers referred to the Australian Securities and Investments Commission. While the findings relate specifically to strata, the broader message matters for sole traders and small domestic service operators who rely on brokers to help place cover such as public liability, professional indemnity, tools and equipment, commercial motor, personal accident or business interruption insurance.
For a cleaner, gardener, disability support provider, mobile beauty therapist or other home-based service operator, the issue is not simply whether a policy is cheap. It is whether the recommendation reflects the real work being performed, the locations visited, the equipment used, any subcontractors engaged and the potential consequences if a client alleges injury, property damage or financial loss.
The latest findings also underline the importance of asking practical questions before accepting a recommendation. Small business owners should understand who is providing the advice, whether any representative or referral relationship exists, how the broker is paid, which insurers were considered and why a particular policy was selected. If exclusions, sub-limits or assumptions are material, they should be explained before the policy is bound, not discovered during a claim.
That does not mean operators should avoid advice. In many cases, specialist assistance can be valuable, especially when a business has grown beyond its original structure or when work is performed inside clients’ homes. However, trust should be supported by clear records. Keep copies of fact finds, quotes, emails, schedules and statements of advice where applicable. Review them whenever services, turnover, staffing, equipment values or work locations change.
For domestic service businesses, the lesson is straightforward:
- Check whether your business description still matches your actual work.
- Ask how conflicts and commissions are managed.
- Confirm the exclusions most likely to affect your services.
- Compare policy limits against the cost of a serious liability claim or equipment loss.
- Review cover at renewal rather than treating it as automatic.
As insurance distribution becomes more digital and more specialised, informed questions remain one of the strongest protections for small businesses finding suitable cover.
Please Note: If this information affects you or is relevant to your circumstances, seek advice from a licensed professional.
