As we have all seen over the recent months, Victorians have watched hospitality venues become the target of organised criminal activity.

I’ve had numerous calls from long-standing hospitality clients, many of whom have never seen anything like this in their careers, asking a simple but confronting questions: “What happens if we’re next?” and “Will our insurance be impacted?”

The images were confronting, with buildings destroyed, police investigations underway and news headlines dominating the coverage. But what many people don’t see are the issues that continue long after the cameras leave.

As insurance professionals working closely with hospitality venue owners, we had a front-row seat to a different side of these events.

The side that rarely makes the news.

What you don’t see

You don’t see the stress of the venue owners who have been targeted. Nor the concern of those that fear they might be targeted next.

Or the financial pressure created by extended trading interruptions, loss of turnover, increased security costs, rebuilding delays and the broader impact on business confidence.

There is also the emotional toll on people who have spent years, and often decades, building venues that have become part of their local community.

There are business operators questioning whether insurers will continue to provide cover, what future insurance costs may look like, or the conversations taking place within insurance markets.

Insurers closely monitor claims activity and emerging risks. As incidents become more frequent or severe, it can influence future underwriting decisions, pricing and insurer appetite across an entire sector.

While insurance can help repair damaged property or recover lost income, it cannot replace the confidence, security and certainty that crime takes away.

What this could mean for insurance

One issue receiving little attention is the longer-term impact on the hospitality insurance market.

When organised criminal activity becomes more frequent, insurers inevitably assess what that means for future underwriting decisions. Over time, this can result in:

• Higher premiums
• Increased excesses
• Greater underwriting scrutiny
• Reduced insurer appetite for certain businesses or locations

Importantly, these impacts may be felt by businesses that have done absolutely nothing wrong.

Hospitality venues are more than businesses

Restaurants, cafés, pubs, and bars are often the heartbeat of local communities. They create jobs, they support local suppliers. They provide places for people to gather, celebrate milestones and connect with friends and family.

When organised crime targets hospitality businesses, the impact extends far beyond the venue itself. The flow-on effects can include:

• Reduced trust in government and institutions
• Increased costs for businesses and consumers
• Greater inequality and social disadvantage
• Reduced community confidence and perceptions of safety
• Lower economic growth and investment

These are just some reasons why this issue should concern all Victorians, not just hospitality operators.

Why action matters

The business community cannot solve Victoria’s Crime problem alone.

It is time for our political leaders to do more.  A royal commission is a good start, though the real test will be what action is ultimately taken. Organised crime and corruption are significant challenges, with consequences that extend far beyond the immediate damage.

Hospitality operators, business owners and communities deserve to feel safe. Strong action is required to protect them, and the long-term strength of Victoria’s hospitality sector.

When organised crime is tolerated, the consequences extend well beyond the immediate victims.

Victorians deserve better. It is time for action.

To the venue operators doing it tough

To the hospitality businesses that have been challenged by rising insurance premiums, COVID and now fire-bombings, please keep at it. You are an important part of our culture and our way of life.

As insurance professionals, and regular patrons of Melbourne’s great hospitality venues, we’ll continue to support you in every way we can.