What Unfair Trading Reform Could Mean for Small Business Insurance Claims

The Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 passed Federal Parliament on 1 July 2026 and is due to commence on 1 July 2027. Its immediate focus is consumer protection, including a broader prohibition on unfair trading practices, stronger disclosure requirements around drip pricing and new rules for subscription contracts. However, Treasury has also been consulting on whether similar protections should apply to small businesses and franchisees.

For small business owners, the attraction is obvious. Many sole traders, tradies, contractors and venue operators deal with larger organisations where bargaining power is uneven. If a future business-to-business regime prevents harsh or exploitative conduct, it may help smaller firms negotiate more confidently and challenge poor treatment before it becomes financially damaging.

Insurance adds a more complicated layer. General insurers rely on broad supplier networks to handle claims, including builders, engineers, assessors, repairers, investigators and other specialists. The Insurance Council of Australia has argued that these relationships are not ordinary procurement arrangements, because claims handling is already subject to strict prudential, operational and customer service expectations. Insurers need to monitor supplier quality, allocate work based on performance, question invoices where necessary and adjust panels when claim volumes or costs change.

That matters for public liability claims. When a customer, visitor or member of the public alleges injury or property damage, a business is not only relying on the wording of its policy. It is also relying on the insurer’s ability to investigate, appoint the right specialists, manage legal costs and resolve the matter efficiently. If supplier rules become too uncertain, insurers may face higher administration costs or slower decision-making. Over time, those costs can place further pressure on premiums.

At the same time, small businesses should not dismiss the reform as an industry-only issue. Many insured businesses are also suppliers, subcontractors or service providers in larger commercial chains. Fairer trading standards may benefit them outside the insurance relationship, particularly where payment terms, contract changes or performance expectations are unclear.

The practical message is to stay alert. Review your contracts, keep records of risk controls and incident reporting, and use renewal time to compare cover options rather than focusing only on price. If your operations involve subcontractors, events, high foot traffic or manual work, speaking with a broker can also help you understand how liability cover, claims support and contractual obligations fit together.

This reform is still evolving, but it reinforces a broader trend: insurance affordability is no longer just about premiums. It is also about claims systems, legal settings, supplier performance and how well small businesses understand their own exposures before something goes wrong.