Running a hospitality business in Perth has always been demanding, but in 2025, the pressures have never been greater. Rising wages, tighter margins, and more complex compliance requirements are forcing bars, restaurants, cafés, and nightclubs to look closely at every line of their expenses. One area that is often misunderstood, yet presents a significant opportunity to both save money and improve protection, is insurance.
At Delmont Insurance, we see too many hospitality businesses operating with policies that are poorly structured, under-insuring them against real risks, or charging them for cover they don’t actually need. In this article, we’ll explore the four key insurance areas where hospitality venues in Perth often go wrong, why reviewing your policies in 2025 is so important, and how working with a qualified local broker can make all the difference.
Contents Insurance – What’s Actually Covered?
One of the most common misunderstandings we see among hospitality clients is around contents insurance. Many business owners assume that their policy automatically covers “everything inside the venue” — furniture, fittings, kitchen equipment, sound systems, point-of-sale technology, and stock. Unfortunately, this isn’t always the case.
- Fit-out vs contents: Insurers often treat fixtures and fit-outs differently from general contents, which can lead to disputes at claim time.
- Stock cover: Alcohol, food, and other consumables need to be specifically declared and valued.
- Sums insured: Too often, venues underestimate the replacement cost of their contents, leading to underinsurance penalties when a claim is lodged.
Example: A small bar in Northbridge recently suffered water damage after a pipe burst in the ceiling. The owner thought their $100,000 contents cover would be enough — but when replacement costs for their bar fit-out and sound system were added, the true figure was closer to $180,000. Because of the underinsurance, their insurer only paid a portion of the claim, leaving the business thousands out of pocket.
This is why a proper contents valuation and a broker’s review can make a huge difference. Not only can it ensure you’re correctly insured, but it also avoids paying for unnecessary duplication across policies.
Equipment Breakdown – The Silent Risk in Hospitality
Every hospitality business relies on equipment. From commercial ovens and refrigeration units to coffee machines and beer systems, your venue can’t trade without it. Yet many owners don’t realise that standard property insurance won’t cover mechanical or electrical breakdowns.
- Fridges & freezers: If your cool room or freezer fails on a Friday night, you could lose thousands in stock within hours.
- Ovens & grills: A breakdown in the kitchen can shut a restaurant for days.
- Specialist systems: Beer lines, POS systems, and air conditioning are all essential for day-to-day operations.
Equipment breakdown insurance covers repair and replacement costs, as well as the knock-on effect of lost revenue while equipment is down.
Example: We recently helped a Fremantle restaurant that suffered a cool room failure. Their basic property policy didn’t respond — but because we had arranged an equipment breakdown extension, their insurer covered the $25,000 replacement cost and reimbursed them for lost stock. Without that, the business would have taken a huge financial hit.
For hospitality businesses, this type of cover isn’t a luxury — it’s essential.
Business Interruption – The Most Overlooked Protection
When something goes wrong in hospitality, it’s not just the property damage or equipment loss that hurts. The biggest financial risk is lost revenue while the business is closed or trading at reduced capacity. This is where business interruption insurance comes in.
Surprisingly, many hospitality venues either don’t carry this cover or grossly underestimate how much they need.
- Extended closure risks: Fire, flood, or major equipment failure can close a venue for weeks or even months.
- Fixed costs continue: Rent, wages, and supplier contracts still need to be paid even if the venue isn’t trading.
- Additional increased costs: Hiring temporary equipment, relocating to a pop-up space, or marketing to win customers back after closure all cost money.
Example: A Perth nightclub closed for three months after a fire in a neighbouring building caused smoke damage. While their property insurer paid for cleaning and minor repairs, it was the business interruption cover we had structured that kept them afloat — covering lost profits and ongoing expenses until doors reopened.
In 2025, with tighter margins across the industry, going without this protection is one of the biggest mistakes hospitality owners can make.
Workers’ Compensation – Mandatory, but Misunderstood
In Western Australia, workers’ compensation is compulsory for any business employing staff. Yet many hospitality operators misunderstand their obligations, especially when employing casuals, contractors, or overseas workers.
- Coverage gaps: Contractors who are “deemed workers” may still require cover.
- Wage estimates: Incorrectly estimating wage costs can lead to big adjustments (and surprise bills) at the end of the year.
- Health & safety compliance: Poor workplace practices not only increase premiums but can also expose directors to personal liability.
A qualified broker can help you structure workers’ compensation correctly, ensure compliance with WorkCover WA, and even assist in managing claims to reduce long-term premium impacts.
Why 2025 Is the Year to Review Hospitality Insurance
Hospitality businesses across Perth are reviewing their insurance now for three key reasons:
- Insurers are tightening their appetite — with hospitality seen as higher risk, premiums and exclusions vary widely between providers.
- Costs are rising — but structured correctly, insurance can deliver real savings of 15–25% without cutting cover.
- Risk profiles have changed — new trading models (delivery apps, online bookings, outdoor dining) create exposures that weren’t relevant five years ago.
At Delmont, we’re currently helping Perth venues restructure their programs by:
- Consolidating multiple policies into one streamlined package.
- Expanding cover to include equipment breakdown and business interruption.
- Benchmarking premiums across a wide insurer panel to secure savings.
One Perth pub we recently reviewed saved over $8,000 a year in premiums, while also adding cyber cover and correcting underinsured contents. That’s the value of having a qualified, local broker who understands the hospitality sector.
The Value of a Local, Experienced Broker
Insurance isn’t just about ticking a box — it’s about protecting the livelihood of everyone who relies on your venue. Working with a Perth-based broker who knows the local market, the insurers, and the regulatory environment means you’re not just getting a policy; you’re getting an advocate.
- Local expertise: Understanding WA licensing, council requirements, and insurer appetite for hospitality.
- Accessibility: A broker you can call directly, not a call centre.
- Proactive reviews: Ensuring your cover evolves as your business grows or changes.
- Claims support: Having someone fight for you when it matters most.
Call to Action
2025 is the year for Perth hospitality businesses to take a hard look at their insurance. Misunderstandings around contents, equipment breakdown, business interruption, and workers’ compensation are leaving too many venues exposed.
By working with a qualified, experienced local broker like Delmont Insurance Group, you can:
- Review your current policies for accuracy.
- Expand your cover to properly protect your business.
- Save money by benchmarking across multiple insurers.
Running a hospitality business is tough enough without worrying about whether your insurance will respond when you need it most.
Contact Delmont Insurance Group today on (08) 6184 8724 or via email at info@delmontinsurance.com.au.
Article written by James Wilson, Director of Delmont Insurance Group — a trusted adviser and specialist insurance broker