Insurance premiums for tattoo shops leave businesses facing the prospect of closure

For the past eight years a tattoo studio has occupied 205 Brisbane Street in Ipswich, but that is about to change.

Family business Compass Tattoo will close in six months with nowhere to go.

A recent change in their landlord’s insurance has forced their eviction, creating a chilling ultimatum: pay $30,000 a year – on top of their normal expenses – to keep their prime spot or move out.

“Our landlord came to us and said the only way to renew our lease was to take on a pretty large landlord’s insurance bill,” said studio co-owner Angela Nayler.

“His insurance each year is about $11,000 for the building. This year, if he keeps Compass Tattoo as a tenant, he’s looking at about $41,000.”

The mother-of-three said it was a bill the company simply could not afford.

“He wants to keep us. He’s tried over 20 insurance companies and they all say the same thing: they won’t insure him if there’s a tattoo shop in the building because we’re high rated. risk,” she said.

“There are only a few [insurers] in Australia that will cover us, and they are able to jack up the prices as much as they want.”

Tattoo parlors not covered ‘due to gang affiliation’

Ms Nayler said she had contacted more than a dozen other insurers in a desperate search for an explanation as to why tattoo studios were rated high risk.

She said a Shield Insurance broker told her that many insurers wouldn’t cover tattoo parlors “because of gang affiliation and all those sorts of things.”

In a statement, Shield Insurance said that “insurers typically relay broad comments, such as not falling within their underwriting scope, due to the high risk of the business.”

“Gallagher Insurance has a facility for tattoo artists and as far as I know it is the only option on the market.”

Tattoo parlor owners say the industry’s ties to organized crime are outdated. (ABC News: Laura Lavelle)

Arthur J Gallagher Insurance has been contacted for comment.

A spokesman for the Insurance Council of Australia said capital is harder to come by, so insurers’ risk appetite is lower.

“Each insurer bases the offer of a premium on their claims experience,” a spokesperson said.

“An increase in claims activity in a segment may result in higher premiums for that segment, or the insurer may choose not to offer insurance to that segment at all.”

Tattoo studios are disappearing across the country

Matthew Sullivan of Eternal Mark Tattoo in Gympie said he was made to feel like a criminal, despite never being behind bars or committing a crime.

“I don’t feel like I belong in the category of [an artist] or something like that,” he said.

“I’m basically categorized as a motorcycle outlaw, even though I’m not.”

A bearded man stands in a tattoo parlor full of colorful paints.
Gympie tattoo parlor owner Matthew Sullivan says his rent has doubled. (ABC News: Amy Sheehan)

His rent doubled this year after his landlord suffered a $16,000 insurance price hike because he rented a tattoo artist.

“We went from a $4,000 insurance premium to over $20,000,” he said.

“I have to pass the extra cost on to the customer.”

He said he feared the extra cost on top of his other expenses could put him out of business.

“Something has to change otherwise we’re going to see a lot more small businesses closing.”

Association with “obsolete” crime

Australian Tattooist Guild president Alex Cairns said it was a “common” problem nationwide.

“Almost every tattoo shop owner I’ve spoken to over the past two years has the same problem,” he said.

A man works on a tattoo on a client's lower back.
Australian Tattooist Guild president Alex Cairns says the industry has moved on from its dark past.(ABC News: Laura Lavelle)

He said the industry has moved beyond its dark past with organized crime.

“I think there’s an outdated association with an element of criminality,” he said.

“It’s outdated by a few decades.”

For tattoo artists to be licensed, they must pass strict background checks, including fingerprinting in Queensland and New South Wales.

“You would be hard-pressed to find examples where there were [links to organised crime].”

“It’s unfair, it’s discriminatory”

James Thompson and Samantha Morrison stand in the tattoo parlor.
Samantha Morrison says she had to evict her tenant James Thompson because of the insurance hike. (ABC News: Laura Lavelle)

Red Hill apartment building owner Samantha Morrison made the decision to evict her “loyal” tattoo artist tenant after receiving an updated building insurance bill for an additional $10,000.

“We are losing the best tenant we have ever had,” she said.

Ms Morrison said when she asked her insurance company about the price hike, she was told it was because of the tattoo parlour.

“[They] mentioned Molotov cocktails, bombings,” she said.

“It’s unfair, it’s discriminatory.

“Our tenant has no affiliate, not even a parking ticket on his criminal record.

“I don’t think it benefits anyone except the people who get big commissions and throw these false accusations on poor little family businesses.”

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