We Need To Talk About Insurance
Venues across the country are finding it increasingly difficult to get public liability insurance and those that can are facing such incredible hikes to their existing premiums that the viability of running their venue is severely compromised.
In the event live music venues are unable to secure insurance or at best affordable insurance, the key risk is that the small to medium live music venue ecosystem will collapse and this will have a devastating impact not only on the music industry but also to the broader community. The ALMBC has been the driving force addressing the core public liability crisis in the Australian music industry. The greatest risk has been the potential full-scale collapse of the 100-400 capacity live music venues around the country, whose premiums are disproportionate to their revenue and when measured against profit, making continuation untenable.
As we start to lose more live music venues across the country, we lose the bedrock of the live music industry itself. Every artist in the country started in a small room, as did every manager, booking agent, sound and lighting tech, merchandise company and often the punter’s first experience with the visceral nature of live music. Australian venues are literally the mangroves of the music industry – without them, the idea of developing the next Rufus du Sol, Amy Shark, Safia, Northlane, Flume, Troy Brady
In understanding the insurance issue for live music and the response from the ALMBC, the following points are worth noting:
- Insurance prices are going up in every industry – we have liaised with many different industries (Amusements; Tourism Operators; Caravan and Camping Industry; Leisure and Recreation; etc) who are all facing increased issue that is affecting their market and capacity to trade.
- The view from the insurance market is that the cost of public liability insurance in venues that provide live music has been undervalued for many years and there has been a correction in rates.
- Australian insurers have deemed the industry to be higher risk and have left the market. It is important to note that insurance companies are a business to make a profit and cannot be compelled to provide cover that does not match their risk profile.
- The ALMBC have been able to find cover for our members via our broking partners Ausure and Nexus Advisernet
- The ALMBC is also working very closely with the Insurance Council of Australia to get Australian insurers back in the market. We are doing this several ways:
- Providing tools to our members such as RiskSurvey+ and NowYouCan (coming in October) to better present their business to insurance underwriters for them to evaluate risk and quote.
- We are also developing best practice management for venues to mitigate their risks and better manage incidents and how to best manage them.
- Developing strategies to effectively manage claims where patrons have been injured.
- Exploring reform in civil liabilities and work with the legal industry to determine what the live music venue industry can do better to ensure patrons are safe and their claims are managed effectively.
- All facets of the industry have to work together in a consultative approach to bring change and convince insurers in Australia that the live music industry is not as risky as perceived and are working hard to mitigate and manage risk
Processes we are implementing around risk mitigation
There are two core functions the live music industry needs to adopt to increase the participation and capacity of insurers in the public liability market being:
- Presentation and Differentiation; and
- Best Practice
Presentation and Differentiation
When applying for cover it is imperative that insurance brokers better present the risk to underwriters to ensure they have a clear picture of the venue operations.
There are three steps that insurance brokers should adopt:
- Complete a site visit to identify and document obvious risks that require rectification and investigate how venues present themselves such as social media and websites;
- Ensure venues act on these recommendations (where economically possible); and
- Complete a detailed risk survey report of the business for underwriters with the request for quote and cover.
RiskSurvey+ is provided free of charge to ALMBC members so they can, in greater detail, capture how a venue is operated and better present the risk to underwriters. Insurance companies and underwriters categorise risk and it is critical that our members differentiate themselves from other venues and perceptions.
To bring insurance capacity back in the industry, venues must demonstrate that they are actively monitoring for and minimising risk inside their venues. The NowYouCan platform will provide our members the knowledge and processes to ensure they are managing their businesses to best practice. In the event a claim occurs, that it is managed professionally and supporting documentation and evidence is retained. The key is to reduce the number and cost of claims including the claim timeframe.
The NowYouCan platform will be pre-loaded with music venue specific material including:
- Policies and procedures;
- training materials;
- tasks and workflows to be completed at nominated intervals; and
- a tool to record accidents and isolation and rectification of identified risks.
The industry must demonstrate to insurers that music venues are safe environments and if an accident occurs, just like all industries, they are well managed.
Some proposed reform in relation to the current settings
While we appreciate legislative reform is exceedingly complicated and perhaps not the first path forwards and we equally don’t advocate for any specific government investment into this issue as its presents only a band aid solution to the problem. Some process around addressing the issue must be explored and we need to examine these with all parties at the table to ensure we are able to reach solutions that are good for industry and ultimately our customer – the punter.
Stay tuned for further updates on this issue.
More information about insurance options on our website here.
Executive General Manager
ph: +61 438 758 847