The owner and tenant of a Surfers Paradise backpacker hostel have lost legal action seeking an interim ban on their body corporate charging a substantially higher share of a strata insurance premium.

The Queensland Body Corporate and Management Commission decision – relating to the hostel being charged 55.23% of the total building premium – means the situation continues until a final order is made. 

The Surfers Plaza Resort has 146 lots, of which 144 are residential. A shop and the backpacker hostel occupy the remaining two lots.

The commission previously heard the building’s insurance premium jumped tenfold from $71,708 last year when Strata Community Insurance would not renew the policy, citing factors such as the resignation of its broker and the hostel opening.

After local insurers declined coverage, the body corporate arranged a policy through Lloyd’s for $721,939 for 2024-25, and then engaged broker Howden, which secured cover for 2025-26 for $353,806.

When a body corporate meeting voted to allocate 55.23% of the 2025-26 premium to the hostel, the owner of the lot, Crestden, and lessee Tequila Sunrise Pods sought an order saying the apportionment was “unreasonable, unlawful, void and of no effect”.

They argued there was no evidence the hostel was responsible for the bulk of the premium jump, but commission adjudicator Ron Miskinis disagrees.

“As a matter of common sense, one would deduce that the addition of the 270-bed hostel in a building containing 144 residential lots would increase foot traffic, use of common facilities, use of utility services and various insurer-identified risks,” he said.

Howden had advised the higher allocation to the hostel reflected the risk.

“I do not believe the broker’s advice should be dismissed out of hand as argued by the applicants, particularly where it is a large broker that is qualified to undertake risk assessment and risk profiling,” the adjudicator said.

Read the decision here.

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