For restaurant and café owners, these rising costs present significant financial challenges. The hospitality industry, already operating on tight margins, may find it increasingly difficult to absorb such substantial increases in operational expenses.
Daniel Hunter, CEO of Business NSW, pointed out that the state government collects substantial revenue through the emergency services levy and stamp duty on insurance. He noted that businesses are growing increasingly frustrated with having the highest-taxed premiums in mainland Australia. This financial burden forces many to either bear the escalating costs or forego insurance coverage altogether, leaving them vulnerable to unforeseen events.
The Insurance Council of Australia has advocated for the removal of the emergency services levy, arguing that it disproportionately affects those least able to afford it and does not fairly reflect the potential need for emergency services. The NSW government has acknowledged these concerns and is consulting on transition arrangements and a replacement model.
In this challenging environment, restaurant owners should consider the following steps to manage their insurance costs effectively:
- Explore Policy Bundling: Combining multiple insurance policies with a single provider can often lead to discounts and more manageable premiums.
- Enhance Risk Management Practices: Implementing comprehensive safety measures and staff training can reduce the likelihood of incidents, potentially leading to lower insurance costs.
- Seek Professional Advice: Consulting with insurance brokers who specialise in the hospitality sector can provide tailored solutions and help identify cost-saving opportunities.
By proactively addressing these issues, restaurant and café owners can better navigate the complexities of the current insurance landscape and protect their businesses from potential risks.
