Concert halls are hit by rising liability insurance premiums as fears grow for the future of the industry

As Bigsound kicks off in Brisbane today, venues still reeling from pandemic closures are hoping to celebrate a triumphant return to live shows, but soaring insurance premiums have heralded a new crisis for the industry .

Performance halls have been hit with massive premium increases this year and some have all been denied coverage.

The owners of Brisbane hotspot, the zoo, said their premiums rose sharply when assessed in March.

Nestled among the nightclubs of Brisbane’s Fortitude Valley nightlife district, the 30-year-old venue has hosted some of Australia’s most iconic rock outfits, from Powderfinger and Regurgitator to Nick Cave.

The zoo halted all concerts on its 440-person dance floor in 2020.

Co-owner Luke ‘Boo’ Johnston has been looking for ways to stay afloat, including opening a speakeasy next door to make up for lost gigs, but any unexpected cost threatens to sink the zoo.

“For a place like ours, it’s a balancing act at best,” Johnston said.

“We’re basically balancing 10 plates to try to keep the place the way it is.”

Luke Johnston says a liability insurance spike is worrying many live music venues.(ABC News: Lillian Rangiah)

Australian Live Music Business Council (ALMBC) chairman Stephen Wade said the zoo was not alone.

“It’s not just three or four sites – it’s hundreds of sites across Australia,” Mr Wade said.

“When they went to get their liability insurance renewed, they faced huge increases – sometimes up to 1000% above what they normally would, and there are sites that just couldn’t afford it. get at all. »

Documents seen by the ABC show that one venue was charged nearly 10 times its previous premium.

Mr Wade said small and medium venues, without capital to meet the rises, were weighing on whether to close.

The punters gesture from their seats towards the band, who are on stage in the distance
Brisbane Concert Hall The Zoo says rising insurance premiums are putting further pressure on the industry.(Provided: The Zoo/Will Johnston)

“These sites are the absolute bedrock of the industry,” Wade said.

“Every artist you could name – from the biggest artists at Midnight Oil, INXS and iconic Australian artists, to our current huge artists taking over the world – all of these artists are starting out in small venues.

“It would be cataclysmic if these sites were forced to close or were unable to afford insurance to move forward.”

Globally, increased weather events, financial market conditions and capital scarcity have created a “tough” market for insurers, with many shedding riskier prospects from their books.

The Insurance Council of Australia’s (ICA) chief public affairs officer, Mathew Jones, said concert halls were an unfortunate victim.

“Insurance price risk and the activities we’re talking about are inherently riskier than other types of leisure activities,” he said.

“There is alcohol involved, large numbers of people in crowded places, activities taking place at night rather than during the day.”

Small venues essential to the musical ecosystem

As someone who has spent most of his life around concert halls, former Powderfinger bassist John ‘JC’ Collins disagreed.

“Concert halls aren’t nightclubs – they’re completely different things,” Mr Collins said.

“People who go to music venues aren’t necessarily the ones who go out until 3 a.m. – we all close at 11 or 12 a.m. most weekdays and 1 a.m. on weekends.”

Powderfinger began playing venues of just 50 people from Cairns to Adelaide and he said these stages were vital to the music ecosystem.

“We have all these little venues and they’re stepping stones – you can’t just walk out of your living room and start playing stadiums,” he said.

Powderfinger bassist John Collins standing outside a concert hall in Brisbane.
Powderfinger bassist John ‘JC’ Collins worries that smaller venues will struggle to stay open.(Provided: John Collins)

Now co-owner of two bigger venues – the Triffid and Fortitude Music Hall in Brisbane – Mr Collins has managed to avoid an increase in his own insurance premiums, but he fears smaller operators are not so lucky.

“Some of the insurance prices I’ve seen are crazy and unsustainable for sites,” he said.

The ALMBC urgently met with brokers and the CIA to find solutions.

Sean Bemrose, managing director of Tony Bemrose Insurance Brokers, said liability insurance claim amounts are determined by the court system – and each claim can weigh heavily on insurers’ margins.

“Generally, insurers continue to see costly claims and fewer get a return on their investment,” he said.

“Due to past claims, a number of insurers have also stopped offering liability insurance to certain sectors of the hospitality industry.

“A number of insurers have chosen to exit the market, which has a knock-on effect on costs.”

Push for collective bargaining

As venue owners, musicians, booking agents, managers, talent scouts and other professionals gather for Bigsound today, Mr Wade hopes to convince venue owners to come together and negotiate collectively with insurers for a fairer deal.

Stephen Wade, Chairman of the Australian Live Music Business Council
Stephen Wade says hundreds of sites across Australia are facing uncertainty due to rising premiums.(ABC News: Gregory Heap)

Over 100 sites have expressed interest to date.

“We have the opportunity, with some buying power, to be able to approach these insurers and hopefully go back to these sites and give them some leeway – and more importantly, hopefully provide them with insurance that will allow them to continue operating,” says Wade.

He said the ALMBC has also worked with the ICA to help venues learn how to “de-risk” their dance floors.

Wade said the ALMBC hopes an information portal, which will also be launched at Bigsound, will bolster sites’ efforts to get a better price on their bounties.

Mr Wade said he hoped the two measures would stave off the crisis for now, but the industry needed domestic reforms to secure the future of live music in Australia.

“Compare it to motor vehicle claims and other types of industries where there is usually some sort of standard type of payment that everyone understands and is legislated by the government in those areas,” he said. -he declares.

“One of the things about liability insurance – in concert halls and other types of associated areas – is that there is no limit to claims.

“They tend to be very, very big and they can be quite long, and it can take a while for someone to put one on.

“Coming off the back of COVID, coupled with these types of scenarios, we’ve seen a lot of reluctance from Australian insurers to want to undertake this type of insurance.”

Mr Jones said a range of policy solutions could be presented to the government.

Promotional photo of four people who are part of the band Eliza and the Delusionals.
The band members Eliza and the Delusionals.(Provided by: Luke Henery)

In the meantime, Eliza Klatt and Kurt Skuse of up-and-coming Pottsville band Eliza and the Delusionals are pinning their hopes on the Zoo’s doors remaining open.

“It’s a whole community – it’s so much more than just a place…coming to a place is literally like coming to your second home,” Skuse said.