Country pubs under threat from rising insurance costs

Country pubs are under threat from rising insurance costs – and a staggering 63 regional pubs burnt down across Australia in the past 12 months.

The mysterious burning down of a small-town pub is so commonplace in Australia the act has its own nickname; a publican’s stocktake.

It’s no laughing matter for the thousands of rural and regional pub and hotel owners in need of insurance, however, because the frequency of pub fires is pushing up premiums and forcing some to do without entirely.

Insurance Council of Australia chief executive Andrew Hall said a staggering 63 regional pubs had burnt down across Australia in the past 12 months, “for a raft of reasons”.

He said this fed into the bigger picture of a struggling and unsustainable insurance industry in Australia that was being forced to raise premiums to stay afloat.

“Australia has endured 11 declared catastrophes since 2019. It’s paid out nearly $9 billion of insurance. That’s not a very sustainable way to keep functioning.

“If the insurance industry becomes unaffordable or unavailable, you can’t get a loan. If you can’t get a loan you can’t start a business or buy a house. It’s a real challenge because where insurance has become too expensive or unavailable it’s because of the risk,” Mr Hall said.

The risk for many country pubs is obvious. Many are ageing weatherboard buildings, located in fire and flood-prone areas. But a thriving country pub is often the barometer of the health of a country town. If it’s no longer viable, concern shifts to the post office, the local shop and then the school.

Dargo Hotel publican Helen Hall outside the Hotel's log cabins. Picture: Dannika Bonser

Dargo Hotel co-owner Helen Hall said she and husband Steven’s pub was becoming “increasingly difficult” to insure, and significantly more expensive each year.

“For the past six years, the only insurance available is international, and it’s only affordable if the business is sustainable. It is (a) significant (cost) in the scheme of things,” Ms Hall said.

The Halls operate a pub and hotel business in one of the most remote towns in Victoria, at the foothills of the Victorian Alps in East Gippsland.

An hours’ drive northeast and Bridget and Daniel Betts are researching alternatives after the pair, who own Omeo’s Hilltop Hotel, were told their annual premium would be rising 30 per cent this year.

Their concrete pub was built on the top of a hill overlooking the Omeo township in 1902.

“We’re not in a flood plain. Our pub and the rec reserve are actually used as the safety points when there is a bushfire because there are no trees or immediate fire danger,” Bridget said.

“I’ve spoken to the other pub (owner) in town and she was the same, but she’s just sold.”

Cameron Lloyd, of LAI Insurance Brokers, said there were only a handful of underwriters left willing to insure rural and regional pubs given the old age of many of the venues, their remote location and, if weatherboard, their flammable construction.

“And they have a large number of losses and they tend to be total losses,” Mr Lloyd said. “Their biggest problem is the probability that they lose the entire venue, they don’t usually have smaller kitchen-only fires.”

While insurance can be found, he said prices were up as much as 40 per cent compared to three to four years ago.

“But in context most things have gone up. The cost to replace the building has gone up, it’s an inflationary effect.”