Small businesses remain one of Australia’s most important economic engines, driving employment, innovation, and growth across every region. But despite their resilience, they are facing intensifying pressures. Rising operating costs, complex regulatory requirements, and economic uncertainty are challenging their ability to stay afloat.
Now, a new report from the Australian Chamber of Commerce and Industry (ACCI) highlights another escalating concern: insurance premiums are becoming unaffordable for many SMEs, leading to underinsurance or complete loss of coverage.
You can read the full report here:
According to the ACCI’s findings, small businesses are paying up to 30% more for insurance premiums due to state and territory taxes and levies. These additional costs sit on top of increases driven by supply chain stress, extreme weather events, higher labour costs, and cybersecurity threats.
The result is a worrying trend:
This shift carries long-term risks. As the ACCI notes, when disasters strike, underinsurance often means businesses cannot reopen.
ACCI CEO Andrew McKellar says insurance costs have reached a breaking point for thousands of small businesses. Many report double-digit increases across property, liability, cyber, and workers compensation lines.
McKellar urges business owners to take two immediate steps:
1. Engage an experienced insurance broker.
Brokers can help identify coverage gaps, avoid overinsurance, and navigate complex policy wording.
2. Conduct a structured risk audit.
Cyber threats, workplace injuries, theft, and physical hazards remain key exposures. Reducing these risks can improve insurability and moderate premium growth.
For insurers, MGAs, and brokers, this underscores the need for clear communication, transparency, and accessible risk-reduction advice.
The report calls for a co-ordinated national response, including:
These can add up to 30% to a premium. Some states have already removed them, demonstrating affordability gains
A national investigation into small business insurance affordability, availability, and competitiveness.
The last major reforms (2002) helped stabilise public liability premiums. Updated legislation could once again expand insurer appetite and reduce underwriting risk.
This would help SMEs improve risk literacy and access practical tools to strengthen insurability and resilience.
The ACCI sees value in tailored, industry-specific insurance products and improved engagement between insurers, brokers, and the small business community.
The report notes that the Cyclone Reinsurance Pool has boosted insurer participation and improved the availability of reinsurance for northern Australia.
However, many small businesses in cyclone-prone regions still face extreme affordability pressures. The ACCI recommends a review of the scheme to ensure it delivers meaningful premium relief for those most exposed.
One of the report’s most sobering warnings is about the increasing number of SMEs operating with inadequate coverage.
Without proper insurance, a single event — a storm, fire, cyberattack, or liability claim — can force a business into insolvency. For regional and community-based enterprises, this can have ripple effects on employment and local economies.
Small business owner Yasmin Coe, interviewed in the report, says rising premiums are “increasingly difficult to absorb in an already tough economic environment.” She represents thousands of owners facing the same dilemma.
While the ACCI report focuses on policy and affordability, it also highlights the crucial role intermediaries and platforms play in helping SMEs navigate their insurance decisions.
Brokers and underwriting agencies are central to ensuring that small businesses can access appropriate coverage. Clearer communication, better risk insights, and streamlined processes will be critical in reducing confusion and preventing underinsurance.
While InsuredHQ does not take a position in the policy debate, the report reinforces how vital strong digital infrastructure and risk literacy tools will be for the sector.
The ACCI’s message is clear: insurance must remain accessible if small businesses are to survive and grow.
A combination of regulatory reform, industry collaboration, and better risk management practices is needed. Removing unproductive taxes, modernising liability laws, and supporting SMEs with practical tools and education would ease cost pressures and promote resilience.
At a time when extreme weather, cyber incidents, and economic volatility are rising, the ability of small businesses to protect themselves is a national priority.