iscoverGovernment taxes and levies imposed by the state and territory governments are resulting in small businesses paying up to 30 per cent more for their insurance premiums.
SMEs are buckling under the weight of insurance premiums, ACCI says
06 October 2025
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8 minute read
A recent report from the Australian Chamber of Commerce and Industry (ACCI) has unveiled the exorbitant insurance premiums small businesses are having to cough up based on government levies and taxes.
The report, Addressing the small business insurance challenge, was released by ACCI in conjunction with the Insurance Council of Australia and took a closer look at the impact state and territory governments are having on the SME community.
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In the complex regulatory environment, it has been widely acknowledged by Australian small businesses that they consistently struggle with understanding insurance requirements and accessing suitable, affordable insurance.
From the report findings, ACCI revealed a “worrying trend” in which a growing number of small businesses were either underinsuring or not being insured at all due to the rising cost of premiums, energy, and labour.
Andrew McKellar, ACCI CEO, said the report identified a number of things small-business owners could do to insure their business and assets, while also mitigating risk and reducing their insurance burden.
“One of the top priorities for small business when it comes to insurance is to engage an insurance broker who will identify the right policies for your business and to help you avoid either over-insuring or under-insuring,” he said.
“Small business owners should undertake a risk audit as a way of reducing risk. They must evaluate and take steps to mitigate their risk exposure to threats such as cyber-attacks, workplace hazards and physical security.”
Late last year and earlier this year, Business NSW was significantly vocal about insurance premiums and how they were “slowly boiling businesses”.
In September last year, Business NSW began advocating reform as more than one in 10 small businesses said general insurance premium increases were putting the viability of their business at risk.
This was then followed in March this year, when the advocate body revealed insurance premiums “were spiralling out of control”, and nearly 80 per cent of NSW small businesses had reported a double-digit increase over a one-year period.
ACCI’s report made recommendations to help reduce the insurance cost burden to businesses of all sizes, including a Productivity Commission review into small business and insurance costs, modernising civil liability laws, and a dedicated funding body to support SMEs.
McKellar said ACCI had long called for the abolition of unproductive taxes such as stamp duty and emergency service levies, which can add up to 30 per cent to the cost of premiums, which some states had already abolished.
Andrew Hall, Insurance Council of Australia CEO, said insurance provided an important safety net for small businesses to operate and offer services to their community.
“This report sets out practical actions that all levels of government can take to support small businesses by improving insurance affordability,” he said.
“State and territory governments have a critical role to play when it comes to making insurance more affordable by removing state insurance taxes and reforming laws that are no longer fit-for-purpose.
“The insurance industry will continue to work with industries facing acute affordability pressures, like small business, to help find ways to reduce risk and improve affordability.”
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