Author: Jack Westlake, Hospitality & Leisure Practice Lead
Much of the hospitality coverage following the Budget has focused on rates relief for smaller operators. But for hotels, resorts and leisure businesses, other cost pressures remain firmly in focus.
From April 2027, the National Living Wage will rise by 3.9% to £13.21 an hour1. For a labour-intensive sector with a significant number of lower-paid roles, that is an additional increase for operators to absorb alongside the wider cost pressures they are already managing. The Budget also introduced further business rates support for retail, hospitality and leisure businesses alongside changes to Small Producer Relief within the Alcohol Duty system from February 20272.
Individually, these changes may not fundamentally alter the outlook for an operator. Taken together with the costs businesses are already absorbing, though, they add to the pressure to scrutinise spend. And insurance is inevitably part of that conversation.
I’m seeing clients looking for savings wherever possible. But reducing cost shouldn’t simply mean reducing cover.
Look at the programme, not just the premium
For brokers, the opportunity is to look harder at how the insurance programme is structured. Could different deductible options work? Are limits still accurate? Is the programme structured in the right way for the business as it operates today?
A pressured trading environment is also no reason for brokers to stop challenging the market. Claims performance should form part of the renewal conversation, particularly where a client can demonstrate a well-performing risk.
Rather than simply accepting the terms presented, brokers should be prepared to challenge what more can be done for the client.
That becomes particularly important when clients themselves are under pressure to test the market. Price matters, but so does demonstrating the value of the broker relationship. When every cost is being scrutinised, staying close to clients, understanding their needs and responding to them becomes even more important.
The pressure goes beyond premium
Rising payroll and staffing costs can also affect exposures elsewhere in the insurance programme.
Changes to employment rights add another consideration. Reforms introduced through the Employment Rights Act 2025 are being implemented in phases3. Statutory Sick Pay is now payable from the first day of illness, with the lower earnings limit removed, while the time limit for bringing an employment tribunal claim increased from three to six months from 1 October 2026. For hospitality and leisure operators, this puts further focus on keeping employment practices and processes up to date with changing responsibilities, while supporting and protecting staff in their day-to-day interactions with customers.
The broader point is that brokers need to understand how changes to staffing costs, employment practices and workforce decisions are altering the client’s risk, rather than treating each renewal as a repeat of the previous year.
For independent hotels and leisure operators, that pressure can be particularly acute. Larger hotel groups have the benefit of scale, while an independent operator may have less room to absorb simultaneous increases across wages, supplies, utilities and insurance.
That makes getting the insurance programme right, rather than simply finding the lowest possible premium, all the more important.
What should brokers be asking now?
For me, the renewal conversation needs to go beyond “how can we reduce the premium?”
It should include:
- What does the client’s recent claims performance tell us?
- Are the existing limits and deductibles still appropriate?
- Could the programme be structured differently?
- Have changes to staffing or payroll created different exposures?
- Where can we genuinely challenge insurers on price or terms?
In a difficult trading environment, staying relevant to the client matters. Sometimes the most useful question a broker can ask is also the simplest:
“Is there anything you need me for now?”
1, 2 – Gov.uk, Policy Paper, Budget 2026, Published 28 October 2026: https://www.gov.uk/government/publications/budget-2026-document/budget-2026-html
3 – ACAS, Employment Rights Act 2025, Updated 30 October 2026: https://www.acas.org.uk/employment-rights-act-2025
