Rising insurance bites: Ballarat hotelier shoulders $48k a year as premiums surge
A Ballarat publican says insurance has become one of his venue’s heaviest fixed costs, with monthly bills of about $4,000 — or $48,000 a year — now sitting alongside wages, rent and pricier inputs on the balance sheet.
Pete Dillon, who runs Hotel Canberra in Ballarat with his husband Jigs Liwanag, said cover costs have climbed roughly 20% since they took over the business three-and-a-half years ago.
“We’ve got to cover public liability, workers' compensation insurance, plus a series of other insurances in the business. Then, as tenants, we also pay the owner’s building insurance,” he explained.
“Of course, you add on top of that car insurance, health insurance and our own goods and chattels insurance. So our insurance bill a month is insane.”
The pressure comes as a new Australian Chamber of Commerce and Industry (ACCI) study highlights insurance as a “critical” challenge for the nation’s 2.5 million small businesses. The report — prepared with the Insurance Council of Australia — finds premiums are rising across all jurisdictions, driven by global reinsurance settings, more extreme weather, inflation and expanding legal liabilities. State and territory charges such as stamp duty and emergency services levies can add a further 9%–30% to premiums, prompting calls for governments to phase them out.
Online broker BizCover reports one in three small firms has copped premium increases of more than 30% over the past two years. “Small businesses are under pressure to trim expenses right now and ensure they’re not saddled with inflated insurance premiums,” BizCover chief executive Michael Gottlieb said.
ACCI chief executive Andrew McKellar urged operators to work with a broker and tighten risk management to avoid gaps or overpaying. “Small business owners should evaluate and take steps to mitigate their risk exposure to threats such as cyber-attacks, workplace hazards and physical security,” he said.
For Dillon, adequate cover is non-negotiable — but it reshapes the weekly trading equation. “By the time we factor in our rent every month, our insurance and various other fixed costs that we have, then we open the doors and we have a fair percentage of revenue we’ve got to take before we even get back to zero,” he said.
“I think that’s something that people miss, that maybe a good 25 or 30 per cent of our revenue per month goes before we start.”
With costs rising across the board, Hotel Canberra has nudged prices, including a 50-cent lift on coffee, to protect margins. “That’s simply because the margins are so slim in hospitality,” Dillon said. “I think it can be said for any small business, retail and various others, that the margins are so slim ... I think there’s a lot of small businesses like ours on 1 or 2 per cent margins. That’s without drawing your own wages and trying to survive.”
Despite cost-of-living headwinds weighing on discretionary spend, Dillon says trading this year has improved on last year with month-on-month growth. “I think moving forward, there is some positivity in the market … We’ve seen a little bit of positivity just because of those interest rate reductions,” he said. “So it'll be interesting to see again what happens in the first week of November.”
Operationally, the couple has shifted from a degustation-only offer to à la carte and is working longer hours to contain wages. “We have to change to survive or adapt to survive. It’s one of the things that we are looking at again in 2026, what else can we do to keep us relevant?”
Dillon said. “We see businesses around us up for sale and closing. We don’t want to be one of those statistics, so we have to be thoughtful about what we do.”
Jonathan Jackson, 28th October 2025
