Small businesses in Australia are paying up to 30% more for their insurance premiums because of taxes and levies imposed by state and territory governments according to a new report by the Australian Chamber of Commerce and Industry (ACCI).
The 36-page new report Addressing the small businesses’ insurance challenge published in October 2025 is a joint production by ACCI and the Insurance Council of Australia. The report reveals that there is a worrying trend in which a growing number of small businesses are either underinsuring or not being insured at all because of the rising cost of premiums and other costs to business such as energy and labour costs.
ACCI chief executive officer Andrew McKellar said the report has identified a number of things small business owners can do to insure their business and assets while also mitigating risk and reducing their insurance burden.
Mr McKellar said, “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.
“Small business owners should evaluate and take steps to mitigate their risk exposure to threats such as cyber attacks, workplace hazards and physical security.”
The report has also made recommendations to governments to help reduce the insurance cost burden to businesses of all sizes.
“ACCI has long called for the abolition of unproductive taxes such as stamp duty and emergency service levies which can add up to 30% to the cost of premiums. “Some states have already abolished these taxes and levies,” Mr McKellar said.
Other recommendations from the report include a Productivity Commission review into small business and insurance costs, modernising civil liability laws to help small business better access public liability insurance and a dedicated government funding body to support small business in improving their insurance literacy and risk factors.
Insurance Council of Australia CEO Andrew Hall said, “We know that insurance provides an important safety net for small business 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.
“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 continues to work with industries facing acute affordability pressures, like small business, to help find ways to reduce risk and improve affordability,” Mr Hall said.