‘Skyrocketing’ insurance premiums impacting company costs & community clubs, Cockburn boss Brian Hack says

Rising business insurance premiums are ultimately costing local sporting and grassroots clubs vital sponsorships, a Perth shipping industry boss says. EES Shipping managing director Brian Hack said his company had less cash for donations as the result of “skyrocketing” insurance costs it was forced to absorb. The major international freight forwarder — based in Cockburn — pays hefty sums for vehicle insurance, cyber insurance, freight forwarders liability insurance, and workers’ compensation. While not all of these covers are compulsory, Mr Hack said dropping insurance levels was not a risk the business was willing to take, meaning other outgoings eventually have to give. “Some of these insurance policies have gone up 10 per cent, 20 per cent across the years,” he told PerthNow. “We’re now spending almost $100,000 annually on insurances, which is not only a significant cost to the company but it’s also money that is not being spent on staffing and business development.” And he admits a further consequence and risk of rising premiums is the impact on local sports clubs and groups sponsored by big companies. “We really prided ourselves on sponsoring grassroots sport, especially around the area, so the local kids’ football teams, rugby teams, cricket clubs, soccer clubs,” Mr Hack said. “We don’t have capacity to give more, even though we’d like to. I have no doubt there are companies out there now who aren’t sponsoring any local groups at all, purely because there’s nothing left to give. “(We all) just have to scale back.” EES currently sponsors the Leeming Spartan Cricket Club, the Jandakot Jets Junior Football Club and a community radio station. Leeming Spartan Cricket Club’s long-standing treasurer Geoff Burgess told PerthNow securing sponsors had never been tougher. “About 10 years back we found that we could approach businesses and they’d be empathetic of the cause and willing to help the community,” he said. “That’s really become tougher, particularly since COVID I guess as most households and businesses are struggling with increased costs and pressure to pay the bills, but it flows down to us at the cricket club.” Mr Burgess said that while the cricket club still felt unwavering support from their sponsors, other local clubs had not been so lucky. “My kids play at a different cricket club and they rely heavily on people that are involved with the club to volunteer,” he said. “And there are other clubs out at Leeming who share facilities with us that are in the same boat. Everyone’s just noticing it’s getting a bit harder than what it was.” The LSCC also hires out its hall to dilute the reliance on sponsors. “We’re pretty fortunate we’ve got a nice facility there so we host quiz nights or birthday parties, engagement parties, all those sorts of things to generate money over the bar and that sort of contributes and fills in a little bit of the gap,” Mr Burgess said. “We have loyal sponsors that have been with us across the journey and I know that they’ve had times where they’ve had to pull back a little bit, but we (just have to) manage.” An Insurance Council of Australia spokesperson said pressure on premiums could be blamed on rising risk, inflation and global reinsurance costs. “In the case of car insurance, much of this can be attributed to the escalated costs of natural disasters and inflation which is driving up the cost of labour and materials to repair or replace cars,” they said. The spokesperson said workers’ compensation schemes across the country were experiencing rising claim numbers and extended claim durations, as well as an increase in medical costs. “One of the drivers behind the extended claim duration is the increase in psychological injury claims,” they said. “Claimants suffering work-related psychological injury take longer on average to return to work than claimants with a physical injury and have a higher average cost.” The spokesperson said all insurers calculated risk differently. “It is for this reason that the Insurance Council continues to advocate for policy settings and programs that enable or empower risk reduction,” they said. “It is beneficial for all customers to shop around or work with a broker to find the best product for their needs.”