Latest news · Insurance scams
Protect your business from fake insurance and the scammers
Running a small business is hard enough without having to watch out for scammers. Unfortunately, criminals are increasingly targeting business owners, and insurance is one of the areas they exploit. They might reach you by phone, email, online or even in person.
At Reliant Business Insurance, we work with small businesses every day, so we want you to know what these scams look like and how to avoid them.
Why this matters
Insurance scams are more common than most people think, and the consequences can be serious. You could pay for a policy that doesn’t exist, find out you’re not covered when you need to claim, or even end up in legal trouble if your insurance is a compliance requirement for your trade or contracts.
Here’s how to avoid the pitfalls.
The tricks of the trade
Most scams follow a familiar pattern. These are the ones we see most often aimed at small businesses:
Fake policies
Cover that sounds too good to be true. These “ghost brokers” may be selling you a policy that was never issued.
Unusual payment requests
Genuine insurers and brokers don’t ask for cash, cryptocurrency, gift cards or payments to personal accounts.
Premium theft
A scammer collects your premium but never arranges cover, or intercepts an online payment meant for your genuine insurer or broker.
Policy tampering
Details or benefits on an existing policy are changed without your knowledge, leaving you with less cover than you think.
Unnecessary cover
Some sellers push expensive policies your business doesn’t actually need.
When you apply for insurance you hand over a lot of sensitive business and personal information, so take care over who receives it. If a “broker” contacts you from a free webmail address rather than a professional business domain, treat that as a warning sign.
What a scam can cost you
- Financial loss: You may pay premiums for cover that doesn’t exist, or pay far too much for cover you don’t need.
- No protection when it counts: If a claim arises and you’re not insured, your business carries the full cost.
- Legal and reputational risk: If you need insurance to meet licensing, contract or compliance requirements, a fake policy can put you in breach.
- Stress and lost time: Sorting out a scam takes a toll on you and your team.
Spotting the red flags
Knowing how to recognise a scam is half the battle. Watch for these warning signs:
- Unsolicited offers: Be cautious about insurance calls or emails you didn’t ask for. Reputable providers rarely cold-call.
- High-pressure tactics: Anyone pushing you to decide or pay immediately should make you suspicious.
- Vague or inconsistent paperwork: Genuine policy documents are clear and complete. If the person selling it can’t answer basic questions, walk away.
- Suspicious payment methods: If something seems off, look up the provider’s phone number yourself (don’t use the one they gave you) and confirm the payment details by phone.
- Hidden caller ID: When a genuine broker calls you, you should be able to see who is calling.
How to protect yourself
The good news is there are simple steps you can take to protect your business.
Verify credentials
Check any broker or insurer is legitimate before handing over details or money. Search the ASIC Financial Services Register to confirm they hold the right licence.
Understand your needs
Knowing the cover your business actually requires makes it much harder to be sold something unnecessary.
Work with a broker
A reputable, licensed broker can find the right cover and help you steer clear of dodgy operators.
Train your team. Make sure anyone who handles payments or paperwork knows these warning signs.
Pay it forward too. Report scams and would-be scammers to SCAMWATCH.
Taking control
A little vigilance goes a long way. Educate yourself and your staff about these scams, and don’t be afraid to ask questions, check credentials, or take time to think before you commit.
With the right approach, you can get the insurance your business needs without being ripped off. If you’re ever unsure whether an offer, email or invoice is legitimate, get in touch with us before you pay.
Unsure about an offer or a policy? Leave your details and we’ll get back to you.
Reliant Business Insurance
Reliant Business Insurance is an independent insurance broker based in Frankston South, Victoria, helping small businesses across Australia, with a special focus on the trades.
Phone: 03 8905 4753
Email: graham@reliantbi.com.au
Web: reliantbusinessinsurance.com.au
Reliant Business Insurance Pty Ltd t/as Reliant Business Insurance (ABN 71 639 126 551, CAR 1242758) is a Corporate Authorised Representative of Community Broker Network Pty Ltd (AFSL 233750, ACN 096 916 184). This article is general information only and does not take into account your objectives, financial situation or needs. Please consider whether it is appropriate for you before acting on it.