Recent reports have detailed how outback pub owners are struggling to keep up with the cost of insurance, and in some cases, are forced to look overseas for coverage.
The ABC’s report details how owners and operators of country pubs have been ‘blindsided by exorbitant insurance’ increases. Publicans across Queensland reported similar issues, with the ABC stating that “they were concerned for the future of outback pubs like theirs, and the flow-on effects in communities,” with the pubs a vital part of local economy.
In some instances, new quotes have more than doubled what operators were paying just two or three years ago, leaving them facing closure. Such is the scale of the problem, that some operators have called for the government to exercise tighter control over the industry, or even to step in to offer its own coverage of regional venues.
Australian Hotelier spoke to Bernie Hogan, chief executive of the Queensland Hotels Association about the issue, and what the organisation is doing to help its members.
“We’re acutely aware of this issue and it’s not a new problem,” Hogan tells Australian Hotelier.
“Insurance costs have been rising year on year, and unfortunately, it’s not just the regional pubs, but every hospitality venue. Every type of insurance has gone through the roof.”
“Hospitality venues are no different to other businesses that have to have public liability insurance and adhere to health and safety rules,” Hogan adds.
However, the chief executive has also identified education within the insurance industry as crucial to reducing costs, believing that many of the assumptions the industry is making are unfair.
For instance, if a venue has been destroyed by cyclone, it is “rebuilt at today’s standards, not as they were in the 1800s.” However, the insurance industry continues to offer coverage based upon outdated information.
Here the QHA believes there is a double standard in play, with insurance companies placing unfair costs and constraints on hospitality venues – particularly those in rural areas that are more at risk of natural disaster. It is this attitude that the QHA is working to change.
And the issue runs deeper than just the consumer and industry facing insurances brands, as the QHA head explains.
“There’s no competition, insurance companies are mostly using the same underwriter. So while we may see many different insurance brands, they’ll be going to their underwriter who might say that they won’t insure a certain type of property, and that’s what you’re seeing operators going overseas for insurance,” Hogan says.
“[Traeger MP] Robbie Katter was right: it is market failure.”
The QHA is actively working on remedies to these issues, Hogan says, and has “looked at ways with insurance companies to find solutions.”
These have included the possibility of “group buys with all of our members to spread the risk.”