High insurance premiums are a “real killer” for small businesses, a federal parliamentary inquiry heard today.

From family-owned motor repairers to tattooists and independent music publishers, acquiring cover is increasingly tough, with many forced to either scale back or forgo protection, MPs were told. In the most extreme cases, some businesses have decided to stop trading.

Australian Tattooists Guild president Alexander Cairns said risk assessment for the tattoo industry is “probably outdated … and it relates to a perceived involvement from organised crime.

“There’s been a lot of regulatory changes that have seen very identifiable, evidenced changes for the positive, especially in the last 10 years.”

Affording building insurance is a struggle for the industry, Mr Cairns told the Joint Committee on Corporations and Financial Services.

“Building insurance premiums have gone up by so much … It’s for a landlord, so you’re insuring an asset you don’t own, but they are entitled to pass that on in full to the tattoo business and the tenant, because it’s perceived that their business is the thing that’s increasing the risk profile.

“And this is like a real business killer … and the higher numbers are definitely where strata titles [are] involved.”

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Motor Trades Association Group head of government relations Collin Jennings said automotive and small business premiums have been rising at an average of up to 60% since about 2020.

He told the inquiry premium increases “vastly outpaced both revenue growth and general inflation. And in specialised sectors like independent towing and heavy vehicle recovery, we are witnessing some withdrawal of insurer appetite, leaving the central service providers with no viable options for cover.”

Mr Jennings aired frustration at the way insurers assess risk exposure.

“Our members are currently leading the transition to new vehicle technologies, including electric and hybrid systems, by investing heavily in specialised tooling and accredited training.

“However, there is a profound gap emerging despite this rigorous upskilling to manage high-voltage risk safely. Insurers are failing to recognise these professional standards with premium reductions.”

Australasian Music Publishers’ Association CEO Damian Rinaldi said his sector “arguably involves the lowest insurable risk of all music industry activities, and much less risk than, say, the music festival sector.

“And yet, the majority of music publishers [in NSW] are subject to materially higher workers’ compensation premiums than their counterparts in other states and territories, in some cases estimated to be two to three times higher.

“This is due to a perplexing and overly broad classification in NSW that assumes manufacturing is involved in … publishing, which it isn’t.”