A host of big insurance companies have agreed to defer premium payments for small businesses experiencing hardship amid the COVID-19 pandemic.
Competition watchdog the ACCC granted interim authorisation on Thursday for Suncorp, Allianz and QBE Insurance to provide bill relief to struggling small businesses for up to six months.
Other insurance companies will be allowed to participate as well, provided they notify the ACCC, the regulator said.
Insurers will also continue to cover unoccupied premises such as offices without charging premiums.
The package will allow insurance companies and brokers to implement coordinated financial relief for SMEs.
Suncorp lodged an application for the authorisation yesterday, with the ACCC opting to skip public consultation due to the urgent nature of the request.
The insurance giant says it wants to introduce industry initiatives which support SMEs by facilitating “policyholders to continue their insurance coverage rather than cancelling their coverage due to financial hardship”.
The package will last for six months up to and including June 30, but is open to be extended to December 31.
The move comes as Prime Minister Scott Morrison encourages SME stakeholders to take steps consistent with allowing small businesses to “hibernate” through the coronavirus crisis, by offering deferrals on payments and things of that sort.
ACCC chair Rod Sims said there was a “clear and urgent need” for the measures.
“Many small and medium-size Australian businesses are experiencing unprecedented financial hardship due to the COVID-19 pandemic, but need to maintain essential insurance protections, in some cases in order to be able to continue to operate,” he said in a statement circulated Thursday.
The ACCC has been granting a reem of authorisations for firms to bend competition law in recent weeks in an effort to assist with the coronavirus crisis.
Sims says the regulator will consider more requests in the coming weeks.
“We have received a number of urgent formal requests for authorisations from many sectors of the Australian economy,” he said.
Get SmartCompany FREE to your inbox every weekday
“The ACCC stands ready to grant interim authorisations quickly when they are in the public interest.”