As inflation soars, has your business risk changed?

With services-based inflation rising, the business case for business insurance* for your hospitality business may now be more important than ever, with recent research¹ finding that businesses in the hospitality sector are bearing the brunt of services-based inflation.

Industry research has found that the hospitality industry beverage sector has the highest risk in terms of industry insolvency, with 0.95 per cent² of businesses going into insolvency on a rolling annual basis in March 2023.

Adding salt to the wounds and exacerbating the situation for struggling hospitality business owners are entrenched industry challenges such as labour shortages and a heavy reliance on discretionary spending, which is anticipated to decline further in 2023 due to the current economic challenges facing all Australians.

The dual challenges of rising inflation (which sits at near 30-year highs³ for the March quarter), coupled with successive interest rate rises this year, are impacting many hospitality businesses. As a result, you may have adjusted parts of your business operations, or you may be looking to do so moving forward. Either way, the case for reducing the risk exposure your hospitality business may be facing has arguably never been stronger than now.

Is your business insurance up to the challenge?

With businesses in the hospitality sector battling cost increases in 2023, it’s likely that some hospitality business owners may need to change the way they operate their business so they can reduce their business costs – or even add new revenue streams.

For some business owners, that may mean cutting back on their stock levels. For others, it may mean reducing the number of staff their business employs, changing their trading hours or adding a new product, just to name a few potential considerations.

Does your business insurance match your current risk?

If the way you operate your business is changing, it’s worth remembering that your insurance may need reviewing so you can have extra peace of mind knowing your new business operations are properly covered.

While businesses in the hospitality industry are currently beset with stern challenges, your business isn’t alone. Business insurance can have your back when things don’t go to plan by helping to reduce the financial impact that a claim can have on your business.

Enjoy a better business insurance experience with BizCover 

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*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. © 2023 BizCover Pty Limited, all rights reserved. ABN 68 127 707 975; AFSL 501769

1. Creditor Watch, Hospitality bears the brunt of high services-based inflation, April 2023
2. Creditor Watch, Hospitality bears the brunt of high services-based inflation, April 2023
3. ABS, Consumer Price Index, Australia, March 2023