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Why did my business insurance go up?

Business insurance premiums go up when insurers expect to pay more in claims. Injury and legal costs, disasters and building costs pushed most premiums up from about 2017 to 2024, and many have been flat or falling since 2025. Insurers say your own premium also depends on your claims history, sums insured, location and industry.

Written by COVRA · Updated · Sources

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Why business insurance premiums rose.

Premiums for most business covers rose steeply from about 2017 to 2024. The sources point to the same few causes.

  • Injury and legal costs Injury claims drove most of the rise in public liability: the average finalised claim grew 5.5% a year from 2013 to 20211. APRA also points to more litigation, such as class actions and no-win, no-fee cases2.
  • Natural disasters Extreme weather cost almost $3.5 billion in insured losses in 2025, against $581 million in 20243. APRA says property cover is the most affected in exposed regions2.
  • Building costs Building construction prices rose 31% from 2020 to 2024. Because most policies renew once a year, the Insurance Council calls insurance “one of the last industries that general inflation washes through”4.
  • Other businesses’ claims APRA says pricing reflects claims for your risk and similar ones2. The Small Business Ombudsman says compliant businesses face rises “due to risk factors beyond their control”, such as poor practices by others in their sector5.

APRA found the average public liability premium grew 40% from 2015 to 2021, and professional indemnity 27%1. The Insurance Council puts the rise in public liability since 2019 at 55–60%6.

Is business insurance still going up?

Less steeply than before, and not everywhere. Since 2025 most commercial prices have been flat or falling, but rises continue for some covers, industries and places.

Cover Average premium, year to June 2026
Commercial property (fire and industrial special risks)Down 16%
Public and products liabilityDown 5%
Commercial motorDown 4%
Professional indemnityUp 1%
  • A softer market Insurance prices move in cycles. APRA says the commercial market is in “a ‘soft’ market cycle”, with falling premiums and more competition for some covers2. Broker Marsh reported Pacific commercial rates down 13% in the June 2026 quarter, across its own clients of all sizes7, 8.
  • Small-business packages Actuaries Finity estimate package rates rose about 5.5% in 2024–25, after rises “around the double digit mark” in the three years before, and expect insurers to keep pricing in inflation9.
  • High-risk industries Treasury says costs are still rising in sectors with high natural hazard or public liability risk8. APRA names adventure tourism, live entertainment venues and outdoor community groups among those finding public liability hard to get2.
  • Northern Australia Since July 2022, a government-backed pool has provided reinsurance (insurance for insurers) against cyclone damage. The ACCC found small-business property premiums per $100,000 insured fell 24% in medium to high cyclone risk areas after insurers joined, and rose 10% in nil and low risk areas10.

The table is our calculation from APRA data: premiums written divided by policies written, for businesses of all sizes, against the year to June 202511. Averages move with the mix of policies (property policies written rose 14%), so they show a direction, not a price anyone paid.

What affects your own premium.

Insurers price each business on its own risk as well as the market. These are the factors their policy documents and regulators name.

  • Claims history Allianz’s Office Pack says “the higher the risk is (e.g. high claims experience), the higher the Premium will be”12. AFCA upheld an insurer’s refusal to renew a company’s vehicle policy after 15 claims13.
  • Sums insured The most a policy will pay for your building, contents or stock. The ACCC says “sums insured can have a large impact on premiums”10.
  • Location and building Where you are, what the building is made of, and security such as alarms12. The ACCC’s average small-business property premium per $100,000 insured was $713 in northern WA in 2024–25, against $480 outside northern Australia10.
  • Your industry “The nature of Your Business” is on Allianz’s list12. The Insurance Council says firebombings linked to illicit tobacco are raising property costs for tobacconists and the shops next door4.
  • Your excess The amount you pay towards each claim. A higher one “will reduce the cost of Your Premium”, Allianz says12, and APRA found more businesses chose larger excesses as prices rose1.
Taxes

How much of your premium is tax.

State taxes and levies are added on top of what the cover itself costs, and they vary by state.

Taxes and levies 20–40%

Stamp duty, GST and emergency or fire services levies, depending on the state. Insurance Council, October 2025.14

Stamp duty Nil to 11%

On most business covers: nil in the ACT, 9% in NSW and Queensland, 10% in WA and Tasmania, 11% in South Australia. State revenue offices.15–20

NSW Emergency Services Levy About 34%

Added to the average business premium. Insurance Council, September 2026.21

Victoria, business insurance 7%

Duty on business covers such as public liability renewed in 2026–27, falling to nil from 1 July 2033. SRO Victoria.22

The Insurance Council says every state and territory except the ACT charges stamp duty14. Its example of the NSW levy is a suburban mechanic paying around $12,000 a year21. NSW small businesses with turnover under $2 million can be exempt from duty on public liability, professional indemnity and commercial vehicle cover23, and NSW has committed to replacing the levy with one spread across all properties24.

What happens at renewal.

The rules that apply when your renewal price changes.

  • Notice Your insurer must write to you at least 14 days before your cover expires, saying when it ends and whether it will negotiate to renew25.
  • Complaints about price AFCA says insurers are generally free to set premiums and don’t have to explain how they’re calculated. It generally can’t review the level of a premium unless the complaint is about non-disclosure, misrepresentation or incorrect application of the premium, a breach of the law, or medical indemnity26.
  • A real case A company’s car policy rose from $6,724 to $9,545 at renewal. AFCA couldn’t award a remedy, and noted that a customer who thinks a premium is too high “may seek insurance from another insurer”26.
  • Like for like A lower price can mean less cover. The ACCC says some of the falls in northern Australia could also reflect businesses choosing less cover or a higher excess10.

COVRA’s two-minute overpaying check asks a few questions about your business and how your cover was arranged. What each cover generally costs is in our public liability, commercial property and professional indemnity guides.

FAQ

Common questions.

Does business insurance go up every year?

Not necessarily. Most premiums rose steeply from about 2017 to 2024, but since 2025 many commercial prices have been flat or falling. Small-business packages still rose about 5.5% in 2024–25, and some high-risk industries and places are still seeing rises.

Does business insurance go up after a claim?

It can. Insurers name claims history as a factor in the premium, and an insurer can also decline to renew: AFCA upheld one insurer’s decision not to renew a company’s vehicle policy after 15 claims.

Why is business insurance so expensive?

Mainly because of what insurers expect to pay in claims, including injury and legal costs, disasters and building costs. State taxes and levies can add 20% to 40% on top, according to the Insurance Council.

Is there stamp duty on business insurance?

Yes, everywhere except the ACT. On most business covers it’s 9% in NSW and Queensland, 10% in WA and Tasmania and 11% in South Australia. In Victoria it’s 7% for 2026–27 and falls to nil by 2033.

How can I lower my business insurance premium?

Insurers say a higher excess, security such as alarms and a better claims history can lower a premium, and the amount you insure affects it too. A higher excess means you pay more of each claim yourself.

Can I complain about a premium increase?

AFCA generally can’t review the level of a premium. It can if the complaint is about non-disclosure, misrepresentation or incorrect application of the premium, a breach of the law, or medical indemnity.

Still have a question? A broker can talk it through with you.

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Covers in this guide.

Our guides to what each cover generally does, what it costs and the rules that apply.

Public Liability Insurance Commercial Property Insurance Professional Indemnity Insurance

Sources.

  1. Review of claims trends and affordability of public liability and professional indemnity insurance, APRA, May 2023
  2. Submission 39: Inquiry into small business insurance, APRA, March 2026
  3. Extreme weather cost $3.5 billion in 2025, Insurance Council of Australia, 23 January 2026
  4. Submission 13: Small business insurance, Insurance Council of Australia, 24 February 2026
  5. Submission 52: Inquiry into small business insurance, Australian Small Business and Family Enterprise Ombudsman, 6 March 2026
  6. Submission 13, Attachment 4: Small business insurance – public liability insurance, Insurance Council of Australia, March 2026
  7. Global Insurance Market Index: Pacific insurance rates, Q2 2026, Marsh, 2026
  8. Submission 99: Small business insurance, Department of the Treasury, September 2026
  9. Submission 50: Optima 2025 General Insurance Insights (excerpts), Finity Consulting, 6 March 2026
  10. Insurance monitoring report 2026, ACCC, 25 June 2026
  11. Quarterly general insurance performance statistics database, September 2023 to June 2026, APRA, 27 August 2026
  12. Office Pack PDS and Policy Document (POL963BA), Allianz, 9 April 2026
  13. Determination 12-00-1022809, AFCA, 28 June 2024
  14. Insurance Catastrophe Resilience Report 2024–25, Insurance Council of Australia, October 2025
  15. Tax reform, ACT Revenue Office
  16. Types of insurance (insurance duty), Revenue NSW
  17. Insurance duty rates, Queensland Revenue Office
  18. Self-assess and pay insurance duty, WA Department of Finance
  19. Rates of duty (insurance), State Revenue Office Tasmania
  20. Stamp duty on insurance: rates, RevenueSA
  21. Insurers call on Inquiry to end tax on insurance premiums, Insurance Council of Australia, 8 September 2026
  22. Abolition of duty on business insurance premiums, State Revenue Office Victoria
  23. Insurance duty small business exemption, Revenue NSW
  24. Next steps for Emergency Services Levy reform, NSW Treasurer, 15 February 2026
  25. Insurance Contracts Act 1984 (Cth), section 58, Federal Register of Legislation, 1 March 2024
  26. Determination 12-25-206722, AFCA, 27 October 2025