A new report has revealed insurance as one of the top financial pressures impacting small businesses, as more organisations report worsening profits over the past 12 months.  

Approximately 45% of the 800 business owners surveyed, as part of the Council of Small Business Organisations Australia and Commonwealth Bank report, identified insurance costs as a significant factor affecting their financial situation, ranking just behind taxes and employee wages. 

Nearly 72% of respondents indicated that rising input costs – including insurance, rent, utilities, and supplier expenses – have had the most substantial impact on their businesses, surpassing concerns related to regulations and employee issues. 

The report also highlighted increased difficulty for specific sectors, such as hospitality and tourism, as well as for flood-prone areas, in obtaining insurance.  

The concerns come as about 64% of small businesses reported lower profits compared to the previous year.   

Nearly one in six business owners acknowledged occasions where they could not pay themselves due to financial pressures, while 25% admitted to frequently using personal savings to keep their businesses running.  

The council says 54% of owners identified reducing expenses as the top priority for the organisation, with nearly three in four respondents expecting costs to rise in the next 12 months.   

The report also revealed an “alarming level” of mental health impacts, with 76% of owners reporting stress or anxiety from their work in the past year, while 57% stated they have experienced burnout.  

COSBOA chair Matthew Addison says the findings “paint a clear picture of a sector under strain but not standing still”.  

“Small business owners are working harder than ever to keep up with rising costs, workforce shortages, regulatory complexity and the relentless pace of digital disruption,” Mr Addison said. 

 “Many are dipping into their savings or delaying their own pay to stay afloat, yet they continue to adapt, innovate and serve their communities.”  

Click here for the report.