media release (22-222MR)

ASIC clarifies the treatment of incidental retail cover as part of business insurance contracts


ASIC has issued relief to insurers and brokers that clarifies their obligations when offering retail insurance as part of bundled business insurance contracts.

ASIC has made a legislative instrument, ASIC Corporations (Incidental Retail cover) Instrument 2022/716, that exempts insurers and brokers from certain retail client obligations in Chapter 7 of the Corporations Act 2001 for ‘incidental retail cover’ provided in business insurance contracts. Incidental retail cover refers to retail insurance cover provided to a business that forms a minor, incidental and inseparable part of an otherwise wholesale insurance product. An example of incidental retail insurance is retail cover for the loss or damage of personal effects within wholesale business property insurance products that benefit a business’s employees.

ASIC granted relief to reduce regulatory burden and provide certainty for industry that the retail client obligations do not apply to what are, in reality, business insurance products. This prevents compliance costs arising from the retail client obligations from being incurred and passed on to businesses.

The relief also includes several conditions to ensure it is appropriately targeted and that the retail covers are genuinely incidental to, and inseparable from, the wholesale insurance product. For example, when a retail cover is offered as an optional extra, when the business client makes a separate decision to purchase it or pays an additional fee, the relief will not apply.

The relief commenced on 16 August 2022 and will expire in three years. ASIC will review the operation of the instrument before it expires.



Bundled business insurance contracts provide several types of cover that, while predominantly wholesale, may also provide cover defined as retail under the Corporations Act.

It is beneficial for insurers to be able to bundle incidental retail covers into wholesale business insurance products.

The relief was granted following an application from an insurer. ASIC consulted with various industry, consumer and government stakeholders before deciding to grant the relief.

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