Business NSW Advocates for Urgent Insurance Reforms to Alleviate Rising Premiums

Daniel Hunter, CEO of Business NSW, attributes these steep increases to a combination of factors, notably state and federal taxation policies. The Emergency Services Levy (ESL) and stamp duty in NSW are particularly impactful, contributing to the high premiums that businesses are compelled to pay. Hunter warns that the current trajectory is rendering many businesses uninsurable or unable to afford adequate coverage, exposing them to substantial financial risks in the event of natural disasters or unforeseen incidents.

The survey further highlights a concerning statistic: 64% of NSW businesses are not fully insured against catastrophic events. This gap in coverage underscores the urgent need for comprehensive policy reforms to ensure that businesses can access affordable and sufficient insurance protection.

In response to these challenges, the National Insurance Brokers Association (NIBA) has put forward several recommendations aimed at enhancing insurance accessibility and affordability:

• Expansion of the Disaster Ready Fund (DRF): NIBA suggests extending the DRF into a rolling ten-year program to provide consistent and long-term funding for disaster mitigation projects. This proactive investment in high-risk areas is intended to reduce the overall impact of natural disasters and help stabilize premium costs.
• Introduction of a National Household Mitigation Scheme: A co-funded initiative between federal and state governments is proposed to support homeowners and small businesses in implementing property-level resilience measures. By retrofitting properties to withstand cyclones, bushfires, and floods, the scheme aims to significantly reduce damage costs and subsequent insurance claims.
• Establishment of an Advisory Committee on Emerging Risks: Given the evolving landscape of risk exposure, including cyber threats and geopolitical instability, NIBA recommends forming a government-backed advisory body. This committee would assess and mitigate emerging risks, ensuring that businesses are equipped with the necessary tools and guidance to navigate the changing insurance environment.

These measures represent a critical investment in Australia's future, aiming to strengthen community resilience, improve insurance affordability, and enable businesses to thrive amidst growing challenges. Business NSW and NIBA are committed to collaborating with the government to achieve these essential reforms and create a more resilient future for all Australians.